Philippine inflation likely eased year on year in December as lower electricity prices may have offset costlier food items during the holiday season.

In its month-ahead forecast, the Bangko Sentral ng Pilipinas’ (BSP) said headline inflation likely fell within the 1.2%-2.0% range in December, slowing from the 2.9% clip seen a year ago.

“Upward price pressures may come from increased prices of major food items due to the lingering effects of adverse weather and strong holiday demand, as well as higher LPG (liquefied petroleum gas) and gasoline prices,” the central bank said in a statement on Monday.

“These pressures could be partly offset by lower electricity prices in Meralco-serviced areas and declining kerosene and diesel prices,” it added.

At 2% or the upper end of the forecast, inflation may have picked up from 1.5% in November and would be the fastest clip in 10 months or since the 2.1% clip in February. It would likewise mark the first time in 10 months that inflation returned to the central bank’s 2%-4% target.

At the bottom end of the forecast, inflation would hit its slowest pace in five months or since the 0.9% in July.

The Philippine Statistics Authority is set to release the December inflation data on Jan. 6. — Katherine K. Chan