Gov’t keeps inflation target at 3% for 2019-2020: DBCC

February 28, 2019

The Development Budget Coordination Committee (DBCC) in coordination with the Bangko Sentral ng Pilipinas, kept the current inflation target at 3 percent ± 1 percentage point for 2019 – 2022.

This was announced by the BSP on Thursday.

The announcement of the inflation target is in line with the BSP’s commitment to transparency and accountability as well as the forward-looking approach in the conduct of monetary policy. 

The 3.0 percent ± 1.0 percentage point inflation target for 2019 – 2022, approved by the national government, is an appropriate quantitative representation of the medium-term goal of price stability optimal for the Philippines.

Improved productive capacity of the economy, fueled by higher infrastructure investments by the national governbment, supports achieving robust economic growth amid a low and stable inflation environment. 

Recent inflation developments have been driven largely by transitory supply-side factors, e.g., volatility in international oil prices, higher excise taxes, and weather disturbances that affected food supply, along with moderate demand impulses, the BSP said.

The BSP’s latest inflation projections show inflation is likely to return to the target range over the medium term as the impact of supply-side shocks dissipate.

Inflation expectations have stabilized and are seen to decline in 2019 – 2020, BSP said.

Non-monetary measures have also been deployed by the national government to address supply shocks in the short run and structural problems in the food and agriculture industry in the long run, the BSP added.