The Development Budget Coordination Committee (DBCC) on Friday lowered the average inflation rate assumption for this year to 5 to 6 percent from 5 to 7 percent.

In a statement, Department of Budget and Management (DBM) Secretary Amenah Pangandaman said this was "partly due to a consistent slowdown in inflation over the past four months."

On Tuesday, May inflation was reported at 6.1 percent. It has gone down by 2.6 percentage points since January's 14-year high of 8.7 percent.

Pangandaman noted that the DBCC is "expected that the inflation rate will return to the target range of 2.0 to 4.0 percent by 2024 and 2028 as the administration, through the Inter-Agency Committee on Inflation and Market Outlook (IAC-IMO) provides proactive measures to address the primary drivers of inflation".

"This, together with appropriate monetary policy actions of the BSP, will help ensure a return to the inflation target over the policy horizon," she added.

Pangandaman added that "the assumption for the price of Dubai crude oil for 2023 to 2024 is maintained at $70 to $90 per barrel before stabilizing to $60 to $80 per barrel in 2025 to 2028 as the latest future prices and forecasts still suggest falling global crude oil prices over the medium term".

"The peso-dollar exchange rate assumption for 2023 is narrowed down to $54 to $57 and is expected to be broadly stable at $53 - $57 for the remainder of the medium term," she said.

She stressed that "the peso will continue to be supported by structural foreign exchange inflows and ample international reserves".

"Goods exports and imports growth projections for this year were revised downwards at 1 percent and 2 percent from 3 percent and 4 percent, respectively, following the trend in near-term global demand outlook and trade prospects," she said.

"These are expected to stabilize at 6 percent and 8 percent, respectively, in the medium term," she added. Robina Asido/DMS