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Government Inflation Target Steady at 4 1 Percentage Point for 2013-2014 and Lower at 3 1 Percentage Point for 2015-2016

12.13.2012

In line with the inflation targeting approach to the conduct of monetary policy, the Development Budget Coordination Committee (DBCC) during its meeting on 28 November 2012, decided to maintain the current inflation target at 4.0 +/- 1.0 percent for 2013-2014 and reduce the inflation target for 2015-2016 to 3.0 percent ± 1.0 percent.

The most recent assessment of current and prospective trends indicates a favorable outlook over the medium term. The current 4.0 ± 1.0 percent fixed annual target for 2013-2014 of the Government remains suitable to the Philippine economy. This target is consistent with the country’s sustained economic growth objectives, favorable inflation forecasts, and benign inflation expectations.

The Government decided to reduce the medium-term inflation target to 3.0 percent ± 1.0 percent for 2015 – 2016 to be consistent with the desired disinflation path over the medium term, favorable trends in the structure of inflation, and expected higher capacity of the economy for growth under a low inflation environment. The announcement of the target is in line with the BSP’s commitment to greater transparency and accountability in its conduct of monetary policy.

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