Preliminary Considerations of an Inflation Targeting Framework for the Philippines

G. Lim and Guy Debelle ()

No 1998/039, IMF Working Papers from International Monetary Fund

Abstract: Monetary policy in the Philippines has had multiple objectives. Moreover, shifts in money demand and the money multiplier have made base money a less reliable anchor for monetary policy. Hence, on present policies, a steady reduction in inflation is not assured, and changes to the monetary policy framework should be considered. This paper reviews the benefits as well as the constraints of an inflation targeting framework and the necessary preconditions--both in terms of the institutional infrastructure and the appropriate inflation target--for its successful implementation, including the ability to forecast inflation reasonably well over policy-relevant time horizons.

Keywords: WP; inflation rate; output gap; nominal exchange rate; rate of inflation; central bank charter; inflation process; inflation objective; inflation feedback rule; central bank governor; monetary policy decision; monetary policy strategy; practice inflation targeting; inflation expectation; inflation development; Inflation targeting; Inflation; Monetary base; Exchange rates (search for similar items in EconPapers)
Pages: 30
Date: 1998-03-01
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Citations: View citations in EconPapers (13)

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