MANILA - The Bangko Sentral ng Pilipinas on Tuesday said it sees December inflation settling within the 2.9 to 3.7 percent range.

The BSP said higher prices of domestic petroleum products and key agricultural items contributed to upward price pressures during the month.

"These could be partly offset by the downward adjustment in electricity rates in Meralco-serviced areas, along with slightly lower rice prices and the continued appreciation of the peso," the central bank said.

Inflation accelerated to its fastest pace in 21-months in November as food prices rose following successive typhoons that devastated parts of the country.

The 3.3 percent inflation last month, exceeded the 2.4 to 3.2 percent range forecast by the BSP's Department of Economic Research.

Interest rates are currently at record lows after the central bank cut its policy rate by a cumulative 200 basis points this year, and cut the reserve requirement ratio (RRR) for banks by 200 basis points to 12 percent.

In its last policy meeting for the year, the BSP kept the rate on the overnight reverse repurchase facility at a record low of 2 percent. The rates on the overnight deposit and lending facilities were likewise kept at 1.5 percent and 2.5 percent, respectively.

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