The Bangko Sentral ng Pilipinas said the consumer price index could rise by 4.0 to 4.8 percent in February from a year earlier, due to higher taxes and an increase in electricity and food prices.
The top end of the forecast, which is above the central bank's 2-4 percent comfort range, would be the fastest rate since August 2014, when it hit 4.9 percent.
Inflation matched the upper end of the target range in January, but the central bank on Feb. 8 kept policy settings on hold, saying the factors driving inflation were temporary and the rate should return within its target range in 2019.
"A rate hike appears imminent," said Rajiv Biswas, chief economist at IHS Markit in Singapore. "The BSP is likely to hike the policy rate at its March monetary policy meeting, with another rate hike likely in Q2 2018."
Eugenia Victorino of ANZ also expects the BSP to raise interest rate at its March 22 meeting, and possibly again in May, by a total of 50 basis points.
Despite what some economists call increasing pressure to raise interest rates, the BSP announced a 1 percentage point reduction in banks' reserve requirement ratio (RRR), effective March 2.
The RRR cut, expected to release more than $1.5 billion in additional liquidity into the economy, should not be interpreted as a form of easing as it has a neutral effect on monetary policy, Governor Nestor Espenilla said on Sunday.
He said the BSP could alter the policy stance by changing the policy rate, or more subtly by allowing market-determined term deposit rates to rise or fall by tweaking auction volumes.
Espenilla also dispelled market concern that the RRR cut would accelerate inflation and could dampen the peso.
He said the central bank was selling some dollar reserves as a defensive measure to manage excessive volatility driven by speculation against the peso, which is hovering near 11-year lows. Amid concern about inflation, the statistics agency is updating how it calculates the consumer price index to reflect changing consumption patterns. The change is not expected to prompt adjustment to the target.