“Moreover, the inflationary impact of the potential increases in international commodity prices is assessed to be moderate, supported by lower pass-through to inflation of exchange rate and external commodity price inflation,” he said. The favorable effect of sustained investment spending by the national government on the economy’s productive capacity would help temper inflation pressures, according to Espenilla. The Cabinet-level Development Budget Coordination Committee (DBCC) kept the inflation target of two to four percent between 2018 and 2020 as part of the inflation targeting approach adopted by the BSP. “The medium-term inflation target is set by the DBCC in coordination with the BSP under the inflation targeting framework,” Espenilla said. Inflation targeting is focused mainly on achieving a low and stable inflation, supportive of the economy’s growth objective.

Source: Philippine Star December 28, 2017 16:18 UTC