Higher prices of rice and fuel are seen to push domestic rate of price increases in December 2016 to a range between 2.2 percent and three percent.
"Thus, the full-year average inflation is likely to settle slightly below the low-end of the 2.0-4.0 percent target range in 2016," Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. said in a text message to reporters Friday.
Inflation in the first 11 months this year averaged at 1.7 percent.
Last November alone, inflation rose to 2.5 percent from month-ago's 2.3 percent, the third straight month that it ended within the target range since falling below target in May 2015.
For December, Tetangco said higher electricity rate in areas being serviced by the Manila Electric Company (Meralco) may be another contributor to the possible uptick of inflation.
Weakness of the peso to a US dollar is another factor, he said.
On the other hand, the central bank chief said lower prices of liquefied petroleum gas (LPG) "could partly offset" the acceleration of inflation rate.
"Looking ahead, the BSP will continue to monitor evolving price trends and output conditions to ensure price stability conducive to a balanced and sustainable economic growth," he added.
Source: Philippines News Agency