Overnight rates, which have been kept at record-lows since July 2009, were raised 25 basis points to 4.25 percent for borrowing and 6.25 percent for lending.

The bank's policy-making Monetary Board decided at Thursday's meeting that the hikes were needed to keep within this year's inflation target of 3.0-5.0 percent, governor Amando Tetangco told reporters, according to Dow Jones Newswires.

Prices surged 4.3 percent in February from 3.5 percent in January, previous government data show, while inflation averaged 3.8 percent last year.