MANILA -- The Philippines' central bank on Thursday raised its key interest rate by 25 basis points, to 2.5%, as it strives to temper accelerating inflation.

The move marks the second straight increase for the benchmark, and was in line with expectations, though some observers had predicted an even bigger hike. Last month's increase, also 25 basis points, was the first since 2018.

Philippine inflation quickened to 5.4% in May, putting the year-to-date average at 4.1% and breaching the 2% to 4% target. The central bank has warned inflation could climb further, partly on transport fare increases and shortages of domestic pork and fish.

The rate increase also follows the Philippine peso's decline to its weakest level in 16 years against the dollar, prompting calls for more aggressive tightening. While 16 of 22 economists polled by Reuters had predicted a 25-basis-point increase, six had anticipated a 50-point jump.

Indonesia's central bank is also due for an interest rate decision on Thursday. Elsewhere in Southeast Asia, Bank Negara Malaysia in May increased its overnight policy rate by 25 basis points to 2.00%, catching market participants and economists off guard.