MANILA - Consumer prices in January rose at the fastest pace in over 3 years, exceeding expectations, as the government implemented the first tranche of tax reforms.

The consumer price index rose 4 percent, compared to the 3.3-percent increase last December. Analysts polled by Bloomberg predicted a 3.5-percent uptick. It was the fastest increase since Oct. 2014.

The Bangko Sentral ng Pilipinas, which will meet for the first time this year on Thursday, is targeting inflation at 2 to 4 percent this year.

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The government implemented higher taxes on fuel, sugar-sweetened drinks and cars from Jan. 1 to offset a reduction in personal income tax rates and help fund President Rodrigo Duterte's P8-trillion infrastructure program.

The effect of tax reform on consumer prices will be "minimal" and "transitory," Duterte's economic managers had said, as they warned against profiteering.

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