CONSUMER prices rose 4.4 percent year-on-year on December 2009, the fastest in seven months, the government reported Tuesday.

Inflation is seen averaging 3.2 percent, or well within the central bank's official target of 2.5 percent to 4.5 percent target for 2009, and four percent or in the middle of the 3.5 percent to 5.5 percent target this year.

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In 2011, inflation is seen between three percent and five percent.

"The annual average inflation for food alone in 2009 was slower at six percent from 13.6 percent in 2008," the National Statistics Office (NSO) said.

The agency added that faster increases in food, beverage, and tobacco prices as well as higher fuel and service costs pushed inflation to a seven-month high.

Consumer prices picked up at 9.3 percent in 2008, which was blamed on spikes in fuel and food prices.

"In terms of inflation forecast, indication is that we have met our target for 2009 and perhaps for 2010 and 2011.In fact for 2010 and 2011, we will be in the lower half of target range for inflation which would give us room to provide support to economic growth," Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco said in reaction to NSO's statement.

The country's gross domestic product (GDP) growth slowed to 0.7 percent in the first nine months of the year from 4.2 percent in the same period last year due to the global economic crisis.

This came after the GDP expansion registered only to 0.8 percent in the third quarter from 4.6 percent in the same quarter last year.

The BSP earlier estimated December inflation to fall within 3.7 percent - 4.6 percent. Inflation in November was 2.8 percent.

Core inflation, which excludes volatile price movements of products such as food and energy, jumped to 3.2 percent from 2.7 percent in November, the NSO said.

In terms of geographical origin, nine regions posted lower monthly growth rates in December with the lowest still noted in Ilocos at -0.2 percent.

Autonomous Region in Muslim Mindanao (Armm) meanwhile registered the highest rate of 2.0 percent during the month.

As of end 2009, the highest inflation rate was noticed in Cagayan Valley and Armm at 6.5 percent while the lowest rate was still in Central Visayas at 2.7 percent.

The higher rate last month was driven by more expensive fuel and food, and supply disruptions due to deadly storms that ravaged the country in the last quarter of 2009, the statistics office said.

December's inflation rate was the highest since April, when it topped 4.8 percent. (Virgil Lopez/Sunnex)