MANILA, Philippines -- The Bangko Sentral ng Pilipinas (BSP), the country's central bank, is set to cut interest rates on Thursday for the first time since the global financial crisis deepened in September, but analysts are split on the size of the move, a Reuters poll showed Monday.

Half of the 10 analysts polled by Reuters believe the central bank will trim its overnight rates by 25 basis points, four predicted a half a percentage point cut and one saw a chance of a bigger 75 basis point cut.

"Rates have to go down in response to the deterioration in economic conditions which have turned down brutally," said Vishnu Varathan, an economist with Forecast Pte in Singapore.

"The world is a different place and inflation concerns must surely take the back seat -- we cannot wait for inflation numbers to come down," he said.

Multilateral organizations such as the World Bank and Asian Development Bank have cut their 2009 growth forecasts for the Philippines and the rest of East Asia as the global economy faces a deeper and more prolonged slowdown than initially expected.

A Reuters poll last week showed the Philippine economy was expected to grow 3.3 percent in 2009, its slowest pace in eight years. The World Bank forecasts growth of just 3.0 percent next year.

Yet despite growing signs of an economic slowdown, the BSP has held off with joining global rounds of rate cuts, confronted with stubbornly high inflation and worried that a cut could further undermine the peso currency.

The peso, one of Asia's top performers last year, has lost nearly 14 percent against the dollar so far this year.

After cutting borrowing costs in January, the central bank raised rates by a full percentage point in three steps, the last one in August, as inflation soared into double-digits and hit a 17-year peak of 12.5 percent in August.

Since then, however, price growth has subsided and analysts saw a bigger-than-expected drop in inflation in November that pushed it back into single digits as a sign an interest rate cut was on the cards.

Some analysts who are betting on a quarter point cut said the central bank might also further reduce banks' reserve requirements or limit the access to its special deposit account facility to allow more liquidity to flow into the system.

Last month, the central bank cut banks' regular reserve requirement by two percentage points, a move estimated to release about P60 billion into the financial system.

The central bank's overnight borrowing rate is at 6.0 percent while the lending rate is at 8.0 percent.