he Bangko Sentral ng Pilipinas (BSP) is expected to hike its key interest rates, with inflation likely to surpass its target of 3.0-5.0 percent for 2008, according to an economist at Swiss bank UBS.
"We pencil in 100 basis points of policy tightening over the next 12 months for the BSP," Edward Teather said in a recent report.
He noted that further policy tightening could come if inflation expectations continued to trend higher, a robust minimum wage increase is agreed, or price inflation in non-commodity items rise above targets.
For this year, UBS sees inflation to average 7.2 percent from an earlier forecast of 6.7 percent after a surprise surge in inflation to a three-year high of 8.3 percent last month.
