opposite. because as [ former bank of england governor ] lord king said, " the philippine preference will dominate the equilibration of savings and investment. " since " savings and investment " is very keynesian, it must always be equal in the end. the only way it will be equal is if people become poorer. if the plan to save becomes too much, the only way to reduce it is if people must have less to save. this is the classic keynesian recession. the bsp did not like that, so we were aggressive. we thought, at that time, [ as the economy was emerging ] out of the pandemic, rising yields would destroy confidence, destroy the economy to the point that we would not recover. and the plan was to exit from that [ accommodative measures ] gradually. if you noticed, our first two [ rate ] increases were 25 bps. but of course, a lot of things have changed – the ukraine war and the fact that while everybody was forecasting us inflation will be low and transitory, what happened? exactly the opposite : [ us inflation was ] high and persistent. all these things together made us exit a lot faster than we planned. what was the result? the result, of course, if you compare the two, we raised our policy rate by 25 bps, 25 bps, 75 bps, 50 bps, and 50 bps. in the case of the us, they did 25 bps, 50 bps, 75 bps, 75 bps, and 75 bps. we did not match the fed. but then, in the process, the interest rate differential would become too narrow. if they do another 75 and we will do [ only ] 50, the differential would be much too narrow for comfort. calibrating the policy levers in our tool kit if you look at it, it is really true that what you have is a strong dollar and not a weak peso. of course, if you are the person who is being hurt by the exchange rate, you will not care about the difference – imported goods are still expensive because [ they are ] dollar - denominated. if you notice, if you take out the jpy and krw and add the euro, take out the hkd, sgd, and idr, the other currencies are almost all the same on the chart. indeed, the reason the hkd is different is

who were young folks during the asian financial crisis. i think this is one reason why we are successful. now, we have people who are running the banks [ that ] do not see the asian financial crisis as a theoretical thing ; they were actually there when it happened. they were not running the banks [ at that time ], but they were close enough to the action to know that that should never happen again. regulators, too, said that should never happen again. we should have larger reserves despite [ contrary ] advice from the imf. by the way, the bank for international settlements ( bis ) – the other source of thinking – said asian central banks were actually correct in building up reserves. of course, the question now is, what do you do with those reserves now that times are getting challenging? if i were to lecture now and talk about the topic, that is it. you are doing a good job. you are doing it by following regulations. you are serving the country. and as we engage in dialogue to finetune and improve the regulations, we become an even better economy. a good sign is your own patience in us not fulfilling our promise to make the reserve requirement a single digit, that you are willing to wait until june 29, 2023. note that at these trying times, the most effective thing to do would be to raise the reserve requirements. and we are not doing it. we think we should use market - friendly tools to reduce excessive liquidity. of course, that is why we are growing our issuance of central bank ( cb ) bills. that is why we are hoping you will sell down some of your bills to your trust department. because our research shows that sterilization of excess liquidity by borrowing from banks is the weakest form of sterilization because you can change your mind and lend the money [ instead ]. on the other hand, deposits in the trust accounts are more sticky ; these tend to get rolled over. fortunately, the law now allows the bsp to borrow from the public. of course, it is more convenient that it has done in primary auctions where only the banks can participate. that is why we are simplifying the rules on prohibitions on foreign money and non - resident funds in our monetary operations facilities. [ we issued a circular where ] if 10 percent of the fund is non - resident, it's still [ classified as a ] resident. this is the very thing – the regulators and