THE peso surged above 47 to the dollar yesterday as the government announced inflation in December slowed to 8.0 percent, the lowest in nine months, following the continuing fall in commodity prices resulting from slowing global demand.

The peso closed at 46.96 after opening at 47.30 and trading within a 40-centavo range. It finished at 47.16 against the dollar on Monday.

Traders said the piling up of remittances during the long holiday also helped the peso.

The local unit?s strong finish prompted the central bank to hint at a possible easing of monetary policy and a bond issue to raise $1.5 billion from abroad.

?December inflation at 8.0 percent is an auspicious beginning for 2009,? Bangko Sentral Gov. Amando Tetangco Jr. said in a text message to reporters.

?We will carefully consider opportunities for monetary easing mindful of potential tightening financial conditions.?

The National Statistics Office credited falling prices for December?s inflation, which was slower than the 9.9 percent recorded in November. The December figure placed the full-year average at 9.3 percent in 2008 against 2.8 percent in 2007.

?Inflation for the full year of 2008? was close to the low-end forecast of the Bangko Sentral of 9.0 to 11.0 percent,? Economic Planning Secretary Ralph Recto said.

Core inflation, which measures the change in average consumer prices excluding items with volatile price movements?such as food and energy?also declined, to 7.3 percent in December from 7.9 percent in November.

?This supports indications that inflationary pressures are easing. Core inflation in 2008, registering at 6.2 percent, was higher than in 2007 at 2.8 percent,? the National Economic and Development Authority said.

Recto said lower fuel and energy prices pulled down December?s inflation rate as crude oil prices fell because of slackening global demand.

Inflation for fuel, light and water fell 1.7 percent in December after rising 7.5 percent in November. Food inflation softened to 13.3 percent from 14.5 percent. Inflation for services decelerated to 4.6 percent from 7.5 percent. Eileen A. Mencias and Roderick T. dela Cruz