Preliminary Considerations of an Inflation Targeting Framework for the Philippines

Author/Editor:

G. C. Lim ; Guy Debelle

Publication Date:

March 1, 1998

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

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.

Series:

Working Paper No. 1998/039

Subject:

Banking Economic forecasting Exchange rates Foreign exchange Inflation Inflation targeting Monetary base Monetary policy Money Prices

English

Publication Date:

March 1, 1998

ISBN/ISSN:

9781451845808/1018-5941

Stock No:

WPIEA0391998

Pages:

30

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