MANILA - The Philippines' annual inflation rate held steady in December, bringing the average for 2017 to 3.2 percent, well inside the central bank's target rate, the statistics agency said on Friday.

The headline consumer price index (CPI) in December rose 3.3 percent from a year earlier, the same pace as in November, and matching the median forecast in a Reuters poll.

Faster increases in the prices of food, alcoholic beverages and tobacco were offset by slower or stable costs of other commodities, government data showed.

Core inflation, which strips out volatile food and fuel items, stood at 3.0 percent, slower than November's 3.3 percent.

Prices rose 0.3 percent in December from the previous month.

Central bank governor Nestor Espenilla said on Thursday inflation was expected to fall within the central bank's 2-4 target for this year until 2019.

The central bank's policy settings have remained steady since it raised rates 25 basis points in September 2014, as inflation has remained within its comfort zone despite robust economic growth.

But price pressures from higher tax rates, a rise in oil prices as well as the impact of higher rates in the United States could prompt the central bank to pull the rate hike trigger this year, some economists have said.