Philippines: Preparations for Inflation Targeting

Piyabha Kongsamut

No 2001/099, IMF Working Papers from International Monetary Fund

Abstract: The Philippines is planning to shift toward adoption of an inflation targeting framework in 2001. This paper reviews key policy issues in this context, describes various operational and technical preparations, and presents an empirical analysis of the factors driving inflation. Among the key policy requirements, while central bank independence appears assured, the exchange rate has been allowed to fluctuate largely freely, and the authorities are embarking on a medium-term plan for fiscal consolidation. Empirical results suggest that the effective exchange rate (rather than a bilateral rate) and wages are important long-run influences on inflation.

Keywords: WP; transmission mechanism; food price; targeted inflation rate.; inflation outlook; inflation-targeting country; Philippines; inflation targeting; inflation modeling; exchange rate measure; monetary policy variable; exchange rate movement; Inflation; Exchange rates; Nominal effective exchange rate; Consumer price indexes (search for similar items in EconPapers)
Pages: 20
Date: 2001-08-01
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Citations: View citations in EconPapers (2)

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