THE Bangko Sentral ng Pilipinas (BSP) will likely raise its policy rates by 25 basis points in a meeting come Thursday.

According to the Swiss-owned financial-services firm UBS, there is also a strong likelihood the adjustment could be 50 basis points.

“We expect 25 basis points in policy rate increases from the Bangko Sentral ng Pilipinas and the Bank of Thailand, with the risk of a 50-basis-point policy rate increase in the Philippines,” UBS economist Edward Teather said in commentaries on Asian economies dated August 25.

The BSP has taken the position of focusing on prices than growth, and is scheduled to deliberate on its next policy move Thursday.

Most banks in the Asia-Pacific region have eased their policy stand by scaling down interest rates to maximize the potential for growth. The BSP has bucked the trend by raising its policy rate by 50 basis points six weeks earlier.

UBS expects the policymaking Monetary Board to adopt, at the very least, a 50-basis-point increase that will lift the rate at which the BSP borrows from or lends to banks to 6.75 percent and 7.75 percent, respectively.

The expected yield increase recognizes the pressure for prices to climb, particularly of food and oil, with their impact on the demand side.

Deputy BSP Governor Diwa Guinigundo earlier told reporters the likelihood of another rate adjustment was more a question of magnitude than timing.

He said the 50-basis-point rise in policy rates on July 17, the biggest in local monetary history, was meant to re-anchor expectations of soaring inflation when externally driven events forced domestic prices to rise to their highest in 17 years.

The bigger fear is for demand-side pressures to rise just as high or as fast from pressures that do not respond to monetary-policy stimulus, Guinigundo said.

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