MANILA - Philippine consumer prices in January rose 6.7 percent from a year earlier, well within government targets, official figures showed yesterday.

The January figure was slightly higher than the 6.6 percent inflation rate posted in December. The Bangko Sentral ng Pilipinas had earlier forecast January's consumer price index at 6.4 to 7.1 percent.

Month-on-month, prices rose 0.7 percent in January, the National Statistics Office said in a statement.

Excluding volatile food and energy items, the core inflation slowed further to 5.5 percent in January from 5.8 percent in December, the office added.

While the inflation rate for services and miscellaneous items increased in January over the previous month, clothing and food, light and water all eased.

The BSP puts the average inflation rate for 2006 at 7.5 to 8.1 percent.

Analysts said that with January inflation within the forecast range, it was likely that the BSP would leave key interest rates untouched on Thursday when it holds its first policy-setting meeting this year.

Song Seng Wun, an economist at Singapore-based CIMB-GK Research, said the January outcome is one more sign that the BSP will maintain a wait-and-see stance on monetary policy.

"With the peso in an appreciating trend and with the government aiming to sustain last year's 5.1 percent economic growth, the risk (of a further interest rate hike) has diminished a little," Song said.

Song expects Philippine inflation this year to ease to 6.4 percent from 7.6 percent in 2005.*AFP

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