Gov’t keeps inflation target at 3% for 2018-2020

December 28, 2017

The Development Budget Coordination Committee (DBCC) kept the current inflation target at three percent, plus or minus one percentage point, for 2018 to 2020, a statement from Bangko Sentral Governor Nestor Espenilla Jr said Thursday.

"Inflation projections and expectations continue to indicate that inflation could settle within the current inflation target, although there are upside risks to the inflation outlook," said Espenilla.

The inflation rate for November was 3.3 percent, down from 3.5 percent in October. This was the first decline after the inflation rate rose for four straight months.

From January to November, the inflation rate averaged 3.15 percent.

Espenilla said "expectations of healthy economic growth alongside the tax reform program would create demand-side impetus to inflation." "Nonetheless, the favorable effect of sustained investment spending by the National Government on the economy's productive capacity would help temper inflation pressures," he added.

Espenilla said the "inflationary impact of the potential increases in international commodity prices is assessed to be moderate, supported by lower pass-through to inflation of exchange rate and external commodity price inflation." DMS