MANILA, Philippines ? The peso weakened past 44 to the US dollar for the first time in eight months on Thursday on reports that consumer prices rose at their fastest pace in nine years.

The local currency opened at 44 and hit an intra-day low of 44.10 in morning trade, despite suspected sporadic intervention from the local central bank. This was after the National Statistics Office reported that the country's annual inflation hit 9.6 percent in May.

It was the peso?s lowest level since it touched 44.18 on October 25 last year. The peso lost 6.0 percent so far this year due to inflation-related jitters. It was Asia's best performing last year when it gained nearly 19 percent against the US dollar.

Currency traders said the peso would have slipped further if not for the Bangko Sentral ng Pilipinas (BSP) which was found selling US dollars.

The foreign exchange market was also jittery ahead of the BSP's monetary board meeting on Thursday. The market had factored in a quarter-percentage point rate increase, said Banco de Oro Unibank strategist Jonathan Ravelas.

"If I were BSP, if I want to curtail (the peso depreciation), I?d raise the interest rate by 50 basis points. If they raise by only 25 basis points, the peso would still depreciate. But if they (BSP) don't raise at all, it (the peso) would hit 44.50 immediately," Ravelas said.

But he said the likely adjustment to be announced later Thursday would be only a 25-basis point increase in the overnight borrowing rate, currently at 5.0 percent.

"The market's behavior today already factored in the high inflation rate and a 25-basis point adjustment," he said.

When inflation is on the rise, central banks tend to tighten monetary policy ? either by lifting interest rates or the reserve requirement on deposits and deposit substitutes or other tools ? to discourage consumer and business spending caused by excess money supply.

The peso closed at 44.07 against the greenback Thursday.