Philippines Retains 2-4% Inflation Target Through 2028

The Philippine government has maintained its inflation target at 2-4 percent for 2025-2026 and set the same range for 2027-2028, according to a Development Budget Coordination Committee (DBCC) decision on Dec. 2, 2024.

This target, established in consultation with the Bangko Sentral ng Pilipinas (BSP), underscores a forward-looking approach to monetary policy, aiming to anchor inflation expectations and support economic stability.

“The inflation target range of 2-4 percent remains an appropriate representation of the medium-term goal for price stability, given the current structure of the Philippine economy and the macroeconomic outlook,” the BSP stated.

Economic prospects indicate manageable inflation due to stable aggregate demand and supply-side conditions. Easing monetary conditions, improving labor markets, and investment-driven reforms are expected to sustain economic growth.

However, risks such as external shocks and supply disruptions necessitate vigilance. The BSP assured that its proactive measures would address potential challenges.

“The BSP will ensure that monetary policy settings align with its primary mandate of safeguarding price stability, which is conducive to balanced and sustainable economic growth and employment,” the agency added.

For December 2024, the BSP forecasts inflation to settle between 2.3 and 3.1 percent, with an annual average of 3.2 percent.

Price increases in food, electricity, and fuel due to recent weather disturbances are expected, but these will likely be offset by lower rice prices.