Manila - The Philippines' year-on-year inflation rate rose to 12.5 per cent in August, near a 17-year-high, despite the easing of world fuel prices, the government said Friday.

The National Statistics Office (NSO) said the August index was the highest since December 1991, when the inflation rate hit 13.2 per cent.

The figure was higher than July's 12.3 per cent and the 2.4 per cent in August 2007.

"All the commodity groups continued to record higher annual price hikes in August except for food, beverages and tobacco," the agency said.

The NSO noted that inflation rate for food slowed down to 18.1 per cent in August, from 18.6 per cent in July.

While fuel prices have gone down on the world markets, costs in the commodity group of fuel, electricity and water still went upt 7.2 per cent in August from 5.5 per cent in July, the NSO said.

The August inflation rate brought the average inflation rate to 8.8 per cent for the first eight months of the year.

The Central Bank forecasts annual inflation to average between 9 per cent and 11 per cent for the whole year. (dpa)