Lower food and oil prices and a strong peso, however, may offset higher prices of utilities, tobacco and liquor, he said.

"The latest forecasts suggest that average inflation for 2013 and 2014 would settle at the lower half of the government-set target range of 3-5 percent, reflecting continued manageable inflation pressures and well-anchored inflation expectations," Tetangco told reporters in a mobile text message.

Annual inflation in December was at 2.9 percent.