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The central bank, Bangko Sentral ng Pilipinas (BSP), is expected to jack up its key interest rates by 0.75 to 1.00 percentage point in the months ahead to counter the effects of high inflation, economists said.

Ahead of the BSP rate-setting meeting on Thursday, the market has factored in a 0.25-point increase in the BSP overnight borrowing rate to 6.00 percent.

“With persistent volatilities in global commodities markets, monetary officials are unlikely to abandon their hawkish stance as yet, and this is indeed what they have lately been signaling,” New York-based think tank Global Source said in a commentary dated Aug. 22.

The BSP raised its key interest rates by a total 0.75 percentage point in the past two months.

In July, inflation as measured by the rise in the consumer price index reached 12.2 percent, the fastest rate in 17 years, bringing the January-July average to 8.3 percent.

Global Source expects the BSP to raise its key interest rates by 0.75 to 1.00 percentage point for the remainder of the year.

Edward Teather, an economist at UBS Investment Research, said both the BSP and the Bank of Thailand would likely jack up interest rates by 0.25 percentage point this week.

UBS expects the BSP overnight borrowing rate to reach 6.5 percent by yearend, up 0.75 point from the present rate, and rise further to 7.00 percent next year. Doris C. Dumlao; with editing by INQUIRER.net

• Peso nears 46:$1
• 10 rural banks dispute report
• Legacy Group banks hold big chunk of rural bank deposits
• Q2 GDP seen slowing; central bank to raise rates
• Legal woes set back BSP move vs rural banks
• BSP seen raising policy rate by a quarter point
• Central bank eases loan procedures for small business
• Central bank OKs DBP loan for green projects
• BSP, DTI to put up joint database on BPO

• China wants new global monetary system
• Solons caution gov’t on privatization