Key policy rate seen going up to 5% in Q3.

Byline: Doris C. Dumlao and Ronnel W. Domingo

THE BANGKO Sentral ng Pilipinas, which has begun tightening monetary policy to temper rising inflation, may raise its key interest rates by another 75 basis points this year, bank analysts said.

The BSP, the last in the region to shift to a hawkish mood, last Thursday raised its overnight borrowing rate by 25 basis points to 4.25 percent. And now, the market is pricing in a hike to 5 percent before the end of the year.

Hong Kong-based economist Sherman Chan of British banking giant HSBC said in a research note that the BSP had made the appropriate call in raising the policy rate. Although the latest inflation …