FILE PHOTO: Holiday shoppers walk through a dry goods night market in Baclaran, metro Manila, Philippines December 28, 2017. REUTERS/Dondi Tawatao/File Photo

By Karen Lema and Mikhail Flores

MANILA (Reuters) -Philippine annual inflation quickened to 1.5% in August from the prior month's 0.9% rate, reflecting increases in the costs of housing, utilities and food and drinks, the statistics agency said on Friday.

The latest inflation print was above the 1.3% forecast in a Reuters poll and the fastest rate since March. It brought the year-to-date average to 1.7%, below the central bank's 2.0% to 4.0% target range for the year.

A sharp rebound in vegetable prices, which surged 10% in August after a 4.7% decline in July, was a key contributor to the uptick, the agency said. That outweighed a faster annual decline in the cost of rice.

Core inflation, which excludes volatile food and energy prices, climbed to 2.7% in August from 2.3% in July.

The central bank is forecasting inflation will average 1.7% this year, before rising to 3.3% in 2026 and 3.4% in 2027.

Last week, the central bank cut its key policy rate for a third straight time and signalled that its easing cycle is nearing an end.

"Inflation expectations .... remain firmly anchored to the target," the Bangko Sentral ng Pilipinas said in a statement, while cautioning that potential electricity rate adjustments and higher rice tariffs pose risks to the outlook for inflation.

(Reporting by Mikhail Flores and Karen Lema; Editing by John Mair and Edwina Gibbs)