by south korea at 300 bps. also, we sold fx reserves just like thailand and korea in that regard, [ on how much they sold ] relative to our fx reserves. of course, the other tool is, we tell markets what we intend to do and why. and, i think, this is one of the reasons the bangko sentral has been quite effective [ in inflation targeting ] over the years. well, a recent example of this stronger guidance was provided in last week's bankers'night, where i said, " we will reduce the rrr [ reserve requirement ratio ]. " we hope, in return, the banks will waive all fees on small transactions when people make bank - to - bank payments. from what i hear from the banking association, they are receptive to this. i am looking forward to more and more digital payments, especially by the poor, using their accounts, which have grown significantly because of instapay and so on. managing foreign exchange pressures of course, my speech will not be complete if i do not tell you that for a while, there was fx pressure [ on the peso ], when people began to taunt us, " nagse - senior citizen na'yung peso kasi 60. " although my response is : what is the difference between 60. 1 and 59. 9? but, i guess, [ market ] psychology, no? 4 / 6 bis - central bankers'speeches as you can see, a combination of the things we did, plus the fact that the us is now saying that the jumbo increases are over, has caused the dollar to weaken, which means the peso has appreciated. as you can see in the next chart, if your point of view is starting from november [ 2022 ], the picture is now the opposite [ the peso has since strengthened ]. the slowdown in the pacing of us policy tightening has eased the pressure on the peso. on a year - to - date basis, the peso is the second most - appreciated currency in the region after indonesia's rupiah, but we will continue to monitor the situation. robust external accounts provide cushion against spillovers as i already said, our advantage is that we are actually getting quite a bit of net fdi, but, of course, we want that to increase even further. by the way, the feedback i am getting everywhere is that the president's shift in foreign

##egulate. " then, we have shortages in the financing of government. what is the best indicator? when i was in government, the borrowing cost of the national government of the philippines in dollars for 10 years was 6. 0 ppts higher than the borrowing cost of the us [ united states ] government. same tenor, same currency, [ but the interest was ] 6. 0 ppts 3 / 6 bis - central bankers'speeches higher. why? they thought we will default. and to the credit of former president gloria arroyo, she expanded the value - added tax ( vat ) - 10 percent to 12 percent - and included fuels and electricity in vat. [ it was ] very unpopular, but that solved a lot of problems. the spread is now down to 1. 0 ppt. pent - up demand seen to carry the economy forward the other thing going for us is that we have revenge spending or pent - up demand - a lot of postponed demand. you can see this : 24. 7 percent [ spending ] increase in hotels and restaurants, 31. 0 percent increase in car sales, unemployment down to 4. 3 percent. international tourist arrivals [ is ] now 2. 65 million - of course, not fully recovered yet - while domestic tourism has fully recovered, i think, as you can see that from the hotel and restaurant numbers. bsp's expanded inflation toolkit now, what have we done [ to respond to inflation ]? what we have done, of course, is to use all the medicines that we can use. one is to raise the policy rate. the us [ federal reserve ] is raising its policy rate. the dollar is too strong. for some reason, the philippine markets are thinking : if the differential between the us policy rate and the philippine policy rate is less than 1. 0 to 1. 25 ppts, they [ speculators ] attack the peso. in other words, their risk premium is : the peso is the more risky currency than the dollar ; i need a premium of 100 to 150 basis points ( bps ). so, we raised policy rates. by the way, the last [ rate ] increase [ in february 2023 ] has nothing to do with the us. it has to do with our high [ domestic ] inflation. now, as you can see, we have the highest [ cumulative ] policy rate adjustment of the countries in the table, [ which is ] 400 bps, followed