lucky, it will happen in the last month of the third quarter. looking to history as an inflation - targeter by the way, this is our history : the longest consecutive number of months where headline inflation was above target is 17 months. 1 based on our history, when we got hit by three consecutive months of [ supply ] shocks, it [ elevated inflation ] will not last longer than three months. but the way the consumer price index ( cpi ) or inflation is computed, it will end up [ being reflected for ] 17 months. consider this illustration : a country with zero percent inflation where the index is always 1. 0, year one is always 100. then, all of a sudden, it gets a single shock, 5. 0 percent. so, the index becomes 1. 05. inflation is what? 1. 05 divided by 1. 0, minus 1. 0, equals 2 / 7 bis - central bankers'speeches 5. 0 percent. but that will happen 12 months in a row. the next month, it [ the cpi ] is still 105. so, you have a series of 105 for 12 times. on the 13th month, it is now 105 divided by 105. so, it is back to zero. nipping inflation in the bud in other words, supply shocks, if you do not allow them to propagate or [ turn into ] inflationary expectations that become self - fulfilling, inflation will die as the shocks die. there will be very little second - order effects. in contrast, if you read the most common textbook about latin america, inflation ended up having a life of its own. everybody expects inflation. what happens? the currency depreciates. prices increase. wages increase. inflation begins to have a life of its own. and the only way to restore order is to show to everybody that the central bank is willing to cause a deep recession to cut the [ wage - price spiral ] cycle. we [ the philippines ] will not get there - the point where the central bank, [ in order ] to restore its credibility, must cause a recession. that is one thing that i can assure you. of course, i cannot assure you that there will be no more shocks. by the way, i am counting the number of shocks ; this one is a bad one. nagkahalo - halo eh - may sibuyas, sugar, gulay ; then, you have the fertilizer shock from the ukraine - russia

tbm initiative, we pursued a number of reforms. allow me to cite some of them : we reduced the ima [ investment management activity ] minimum to 100, 000. we introduced a simplified licensing framework for uitfs [ unit investment trust funds ]. 5 / 7 bis - central bankers'speeches this is a long story, but when the peso was extremely strong and appreciating, some foreign banks borrowed from the head office to place it on the sda [ special deposit account ]. because of the zero interest rate sa home country niya, tapos the peso is appreciating, pinagbawal namin'yon. we caught one bank [ violating the rules ] and told them to return all the interest they earned as penalty. and they said, " hindi namin kinita iyon. may minus 20. 0 percent [ in tax ] dahil kay [ then tax chief ] kim henares. " sabi namin, " singilin mo kay kim henares. " i think, naniningil pa sila hanggang ngayon. unfortunately, it made it harder to manage the trust [ operations ] because bawal ang foreign funds. so, we [ at the central bank ] said, " with uitfs, we will consider it domestic if it only has 10. 0 percent [ in share of net assets of non - residents ]. if it is 10. 0 percent foreign, it is [ still ] domestic. " now, why are we so concerned when uitfs buy our [ central bank ( cb ) ] securities? in the complex language of monetary policy, [ there is a word known as ] " sterilize. " if the central bank buys assets, it will increase money supply. so, the only way the central bank can prevent money supply from increasing is to sell securities [ in order ] to get back the money. what we noticed is that if the banks get the money, they can easily change their mind and re - lend it. when the trusts get the money, it is sticky. so, you play a much more important role in money supply management. by the way, thank god, our new charter allows us to borrow from the public. in other words, when we buy assets, we increase money supply. but if we do not want that to happen, we do a counter, which is we borrow. but then, the borrowing may attract arbitrage,