The Bangko Sentral ng Pilipinas expects inflation to reach between 2 to 4 percent from 2020 to 2022.
The central bank deems these estimates as just right because inflationary pressures from international commodities are likely to remain modest.
According to BSP Governor, Benjamin Diokno, the estimates are appropriate quantitiatve representation of the central bank’s medium-term price stability goal.
The bank designed this goal to meet the desired balanced and sustainable growth of the national economy.
As reported by Phil Star, Diokno also said that making this announcement of inflation targets are in strong alignment with the bank’s commitment to being transparent and accountable.
It is also the bank’s way to showcase its forward-looking approach in carrying out or regulating monetary policies.
Inflation Targets on Point Despite Fluctuations
Diokno added that the latest inflation forecasts indicate within-target inflation across the horizon.
This, regardless of the fact that the balance of risks to the inflation outlook is slightly tending toward the upside in 2020, but leaning toward the downside in 2021.
Even if these price volatilities cannot be denied, the BSP chief is firm that inflationary reactions based on the movements of international commodity prices will likely remain modest.
He said that current evaluation of favorable demand-supply balance supported this assessment.
This also finds support in the lower pass-through to domestic inflation of exchange rate as well as inflation of international commodity prices.
Similarly, demand-induced price pressures are relatively going to be manageable in the time frame being focused.
PH Growth Highly-Expected
Diokno explained that improved productive capacity of the domestic economy can explain why more economic growth is possible
In addition, the higher infrastructure investments that the national government has prioritized implies continuous robust economic growth is highly possible as well.
Not to mention, purposeful structural reforms can aid the growth.
The BSP also has strong commitments towards achieving price stability.
It will closely monitor inflation as well as other factors that can affect inflation trends.
This is for ensuring the monetary policy stance of the government will always remain in line with the target range.
Per latest assessment, the BSP already said that inflation can remain in an average of 2.4 percent this year.
This will pick up to 2.9 percent in both 2020 and 2021.
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