The Philippine central bank cut key policy rates by a quarter percentage point on Thursday, against market expectations of a 50 basis point easing, after an uptick in inflation in February.

The monetary authority cut its overnight borrowing rate to 4.75 percent and its lending rate to 6.75 percent.

It said the measured rate cut was due to volatility in oil prices and in the exchange rate of the peso.

That brought cumulative interest rate cuts to 125 basis points cut in three months and follows similar policy easing by central banks worldwide to stave off the effects of the global downturn.

Nine out of 10 economists polled by Reuters earlier on Thursday had forecast a 50 basis point cut despite annual inflation coming in at 7.3 percent in February, higher than January's 7.1 percent.

Only one economist had predicted the cut would be 25 basis points.

The central bank has said it expects inflation to average 3.9 percent this year after 9.3 percent in 2008.