The Bangko Sentral ng Pilipinas (BSP) forecasts inflation in December to settle between 2.6 percent and 3.5 percent.

BSP Gov. Amando Tetangco Jr. said on Wednesday that there is a possibility that inflation might be at the lower end of the range, because of slower increases in food prices, especially from vegetables.

Also, the dip in oil prices may have also helped temper inflation for the month. Tetangco said that this will put the full-year average near the lower end of the 3-percent to 5-percent target range for 2012.

Earlier, Tetangco said that the Development Budget Coordination Committee decided to maintain the current inflation target at 4 percent at plus or minus 1 percent 2013 to 2014 and reduce the inflation target for 2015 to 2016 to 3 percent also at plus or minus 1 percent.

He said that, “the most recent assessment of current and prospective trends indicates a favorable outlook over the medium term. The current 4 percent, plus or minus 1 percent fixed annual target for 2013 to 2014 of the government remains suitable to the Philippine economy. This target is consistent with the country’s sustained economic growth objectives, favorable inflation forecasts, and benign inflation expectations.”

The announcement of the inflation targets is in line with the BSP’s commitment to greater transparency and accountability in its conduct of monetary policy.

Tetangco further noted that the BSP will continue to monitor closely the evolving balance of risks to both inflation and output, to ensure that monetary conditions remain in line with price stability while supportive of sustained economic growth.