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MANILA -- Inflation likely eased further to 4.6 percent in January, giving the Bangko Sentral ng Pilipinas room to hold off on an interest rate hike at its first meeting for 2019, Nomura said Monday.

Stable food and oil prices and a strong peso helped inflation to ease further from 5.1 percent in December, Nomura Southeast Asia economist Euben Paracuelles said. Official inflation data is due out on Tuesday, two days before the BSP Monetary Board meeting.

"But the question really is can it stay within target? That’s going to drive policy decision from the BSP," Paracuelles told ANC's Market Edge. Regulators have set a 2 to 4 percent inflation target.

Inflation could return to target by the second or third quarter, Paracuelles said.

The Bangko Sentral raised the overnight borrowing rate by 175 basis points last year as inflation soared to near 10-year highs, bringing the benchmark to 4.75 percent. It kept interest rates steady during its last meeting.