Government Maintains Inflation Target at 2.0 – 4.0 percent for 2025 – 2026 and Sets Inflation Target at the Same Range for 2027 – 2028

​At the Development Budget Coordination Committee (DBCC) meeting on December 2, 2024, the DBCC in consultation with the BSP, decided to retain the current inflation target of 2.0 – 4.0 percent for 2025 – 2026 and set the same inflation target for 2027 – 2028. By announcing a medium-term inflation target, the BSP aims to strengthen its forward-looking approach to monetary policy formulation with the view of helping anchor inflation expectations to the target.

The inflation target range of 2.0 – 4.0 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 over the next few years.

Prospects for aggregate demand and supply-side conditions point to a manageable inflation outlook despite upside risks. Inflation expectations  likewise remain anchored to the current inflation target. The outlook for domestic aggregate demand will be supported by easing monetary conditions, improving labor market dynamics, and continued implementation of investment-enhancing structural reforms. At the same time, the risk of possible domestic and external shocks will warrant continued close monitoring and proactive intervention measures from the whole of government.
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Looking ahead, the DBCC in consultation with the BSP, will continue its annual analysis of macroeconomic trends and potential structural shifts to ensure the appropriateness of the inflation target. In addition, the results of the review of the BSP’s monetary policy framework in 2025 – 2026 will be carefully considered in the subsequent assessment of the inflation target. Moreover, the BSP will continue to 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.​