Inflation Target Until 2022 Fixed At 2-4 Percent
As the inflationary pressures from international commodities are expected to be modest in the coming years, the Bangko Sentral ng Pilipinas expects inflation to just play between two and four percent until 2022.
The two to four percent inflation rate for 2020 to 2022 is an appropriate quantitative representation of the central bank’s medium-term price stability goal – a conducive rate for the balanced and sustainable growth of the country’s economy, according to BSP Governor Benjamin Diokno.
Diokno also noted that the announcement of the inflation targets for the coming years is part of BSP’s initiative to be committed to transparency and accountability and their forward-looking approach in conducting monetary policy.
In a statement, Diokno said:
Latest inflation forecasts indicate within-target inflation over the policy horizon, even as the balance of risks to the inflation outlook continue to lean slightly toward the upside in 2020 and toward the downside in 2021.
He also pointed out inflationary impulses from international commodity prices will remain at a modest level, even though price volatilities cannot be ruled out. This forecast is supported by the current assessment of favorable demand-supply balance and lower pass-through to domestic inflation of exchange rate and international commodity price inflation.
Diokno assured that the BSP will continue to closely monitor inflation, as well as the factor that influence inflation trends. He also ensured that the monetary policy stance will remain appropriate in keeping inflation within the government’s target range.
BSP’s assessments are forecasting an average of 2.4 percent this year, which is expected to pick up to 2.9 percent in 2020 and 2021.