Central banking in the Philippines: from inflation targeting to financing development
The Philippines' shift in monetary policy from 'monetary targeting' in the 1980s and 1990s to 'inflation targeting' (IT) in 2002 has so far brought in a more 'benign' monetary policy that is more sensitive to output objectives. This result is mainly due to low inflation rates in the Philippines following the downward trend of world inflation in recent years. Whether this 'benign' policy will continue faces a critical test if inflationary pressures were to return. The problem is that both the monetary and IT regimes are based on a demand explanation of inflation that blames inflation on overexpansion of money and credit. The evidence for the Philippines shows the inflation experience had been mostly a supply-led and cost-push phenomenon. The paper documents that, even with a lax monetary policy, the macroeconomy is still not able to adequately increase lending to the private sector amid fiscal difficulties; this contributes to lagging investment and employment creation. Monetary policy is not independent from the other macro sectors as well as the real and external sectors of the economy. This paper therefore proposes alternative monetary policies to IT that take into consideration the bigger and more complex role of monetary policy in an economy that requires a more development-promoting program.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 22 (2008)
Issue (Month): 2 ()
|Contact details of provider:|| Web page: http://www.tandfonline.com/CIRA20|
|Order Information:||Web: http://www.tandfonline.com/pricing/journal/CIRA20|
When requesting a correction, please mention this item's handle: RePEc:taf:irapec:v:22:y:2008:i:2:p:271-285. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.