BSP keeps inflation targets

MANILA, Philippines - The government has kept its inflation targets for this year until 2016 following an inter-agency meeting, the Bangko Sentral ng Pilipinas said yesterday.

In a statement, the central bank said inflation targets have been maintained at three to five percent for this year, and at two to four percent for both 2015 and 2016.

“Based on the most recent assessment of current inflation developments, evolving economic and financial trends as well as indicators of the public’s inflation expectations and the BSP’s emerging forecasts, the current (three to five percent) target for 2014 of the government remains appropriate for the Philippine economy,” the central bank said.

“The government also decided to maintain the medium-term inflation target of (two to four percent) for 2015 – 2016 as it continues to be consistent with the country’s current inflation dynamics and outlook for the next couple of years and the expected higher potential capacity under a low inflation environment,” the BSP continued.

The 2014 inflation target was first announced in 2010, while the 2015 to 2016 targets were announced in 2012.

The DBCC itself is made up of the BSP governor, the secretaries of the departments of finance and budget and management, the Socioeconomic Planning secretary, and the executive secretary.

The inter-agency committee is tasked to set the targets and assumptions of macroeconomic fundamentals including the gross domestic product, foreign-exchange rate, and trade data, among others.

The economy grew by a faster-than-expected 7.2 percent last year, while inflation averaged three percent which is at the low-end of the three to five percent target in 2013.