By Brian Campued
The Philippine government moved to retain its inflation target of 2% to 4% through 2028 or until the end of the Marcos Jr. Administration, according to the Bangko Sentral ng Pilipinas (BSP).
The decision was made during the Development Budget Coordination Committee (DBCC) meeting on Dec. 2.
“By announcing a medium-term inflation target, the BSP aims to strengthen its forward-looking approach to monetary policy formulation with the view of helping anchor inflation expectations to the target,” the Central Bank said in a press release dated Dec. 27.
“The inflation target range of 2.0 – 4.0 percent remains an appropriate representation of the medium-term goal for price stability, given the current structure of the Philippine economy and the macroeconomic outlook over the next few years,” it added.
The DBCC, in consultation with the BSP, sees manageable inflation due to stable aggregate demand and supply-side conditions, while economic growth would be sustained by easing monetary conditions, improving labor markets, and continued implementation of investment-driven reforms.
The BSP, likewise, assured that proactive measures would address potential challenges brought by risks, such as domestic and external shocks.
“The BSP will continue to ensure that monetary policy settings align with its primary mandate of safeguarding price stability, which is conducive to balanced and sustainable economic growth and employment,” the central bank stated.
December, full-year inflation projection
Meanwhile, the headline inflation in the country is projected to settle within the range of 2.3% to 3.1% in December.
In its month-ahead inflation forecast released Dec. 27, the BSP said the increased prices of major food items due to supply disruptions caused by recent weather disturbances will primarily contribute to the upward price pressures during the month.
However, it could be offset by lower prices of agricultural commodities such as rice, according to the central bank.
The Philippine Statistics Authority previously reported that the headline inflation slightly accelerated to 2.5% in November from 2.3% in October.
The BSP also sees the full-year inflation rate at 3.2%, well within the government target of 2% to 4%.
“Going forward, the BSP will continue to monitor developments affecting the outlook for inflation and growth in line with its data-dependent approach to monetary policy decision-making,” it stated.
-avds