MANILA - The Bangko Sentral ng Pilipinas on Friday said inflation was likely to hit 3.7 percent this January, or settling within a range of 3.3 percent to 4.1 percent.
This was slightly higher than the 2 to 4 percent target range of the government, and higher than the 3.5 percent inflation seen in December, which was already a 22-month high.
"Higher prices for fuel and meat, as well as increased Meralco power rates and excise taxes on alcoholic beverages and tobacco contributed to upward price pressures during the month," the BSP said in a statement.
This can be partly offset by stable rice prices, lower prices of selected fish and vegetables, and the continued appreciation of the peso against the dollar, it added.
At the start of the year, BSP Governor Benjamin Diokno said that inflation was the least of their worries, and the upward trend in consumer prices seen in November and December was transitory, as it was the effect of recent typhoons.
The BSP is forecasting inflation to end at an average of 3.2 percent in 2021, and 2.9 percent in 2022, well within the government's target inflation range of between 2 to 4 percent.
Prices of pork and chicken had risen sharply this month, with traders saying there were supply issues caused by the African swine fever and closure of many poultry farms.
The Agriculture and Trade departments however said the price spikes were caused by "manipulation" and are seeking price freezes on basic commodities as well massive importation of meat products.
The Philippine economy saw its worst contraction since World War 2 in 2020.