media and research - speeches central banking in the new frontier date : may 26, 2022 occasion : 2022 boj - imes conference speaker : bsp governor benjamin e. diokno deputy governor wakatabe, my co - panelists, ladies and gentlemen, good day. it is my pleasure to share the latest updates and developments in the philippines, as well as how the bangko sentral ng pilipinas adapts and adjusts to the challenges of an ever - changing environment. the philippines continues to beat the odds. the philippines continues to beat the odds. as the international monetary fund cut its global growth outlook, it upgraded the philippines'for this year from 6. 3 to 6. 5 percent. for its part, the government projects the economy to growth anywhere between 7. 0 and 8. 0 percent this year, and by a range of 6. 0 to 7. 0 percent next year. while the health and economic headwinds we faced were strong, we were quick to address and recover from them. by expanding our healthcare capacity and accelerating our vaccination program, we were able to contain the virus. this has allowed us to ease mobility restrictions and reopen our borders to foreign tourists. in the first quarter of the year, our gross domestic product grew by a stunning 8. 3 percent — surpassing most projections. this growth serves as a good start, keeping us on track of achieving our 7. 0 to 9. 0 percent growth target for 2022. last year, gross domestic product grew by 5. 7 percent, recovering most of the losses from the record 9. 6 - percent contraction in 2020. the jobs market bounced back owing to increased mobility and economic activities. from the peak of 17. 6 percent in april 2020, the unemployment rate dropped to 6. 4 percent in february and further to 5. 8 percent in march this year, the lowest since the pandemic. inflation in april stood at 4. 9 percent, which was within our monthly forecast range. year - to - date inflation settled at 3. 7 percent, which is manageable and within the official target range of 2. 0 to 4. 0 percent. our latest estimates show full - year inflation at 4. 6 percent in 2022. this revised forecast already incorporates the impact of higher global non - oil prices, continued shortage in food commodities, and possible transportation fare hikes due to higher oil prices. yet, we see inflation easing back to within - target range

structural reforms. our banks have limited exposure to structured credit and related derivative products which were the main cause of the large losses of crisis - affected international institutions. liquidity in our banking system remains adequate and bank lending operations continue to expand at a healthy pace. furthermore, our banks are capitalized above the global standards and bsp regulatory requirement. moving forward the next question is how do we move forward? first, given the buffers i have mentioned earlier, we should face the global headwinds with an underlying belief in the resilience of the philippine economy. the message is that 2008 has been a tough year and 2009 will most likely be tougher – but our economy is in a better shape to weather this global storm. this is not our first crisis, nor will it be the last. this time around, we are entering the crisis from a position of relative economic strength. the key is to manage the factors that are within our control, to maintain a positive mindset, and to capitalize on our time - tested resiliency and ability to innovate amidst challenging times. this brings me to my second point. we should press on with the strategy that has so far kept us in good stead – macroeconomic prudence. sound macroeconomic fundamentals are the first line of defense during these trying times. our experience in the past years has demonstrated that sound monetary, fiscal and structural policies have a salutary effect on the economy. the key challenge is to continue to have a consistent and coordinated monetary, financial and fiscal policy response to the ongoing crisis. the commitment to tackle policy challenges boldly through purposeful reforms to strengthen institutional underpinnings, improve productivity and boost international competitiveness should ensure a steady anchor to the country ’ s economic prospects amidst the inevitable global storms. on the part of the bsp, we will continue to craft monetary and financial policies that will support broad - based economic growth while keeping prices stable. in other words, the bsp ’ s monetary policy will continue to focus on achieving price stability while allowing room for the economy to grow. the bsp will also continue to stabilize financial conditions through reforms that will foster healthy financial balance sheets. we will guard against systemic failures through liquidity provision when necessary, while keeping inflation under control. this will ensure the effective functioning of transmission channels for monetary policy. in turn, this should reinforce confidence in the financial markets and in the economy as a whole. the ultimate goal is to have a more balanced and