applause! indeed, given the global economic slowdown resulting from the continuing financial crisis, it is important that we remain united in our efforts to minimize its adverse impact on our country and our people. ensuring the availability of market liquidity is a critical element in a comprehensive approach to avoiding a severe slowdown. in this connection, the bangko sentral ng pilipinas has been implementing a series of moves in accordance with this overall thrust to provide better access to credit. among others, we have done the following : • first, we have reduced policy interest rate twice since december 2008 by a total of 100 basis points. in effect, we have lowered the cost of money for banks. this paves the way for banks to charge lower interest rates for their loans and in effect reduce the overall cost of borrowing and doing business ; • second, we have reduced the deposit reserve requirements for banks by 2 percentage points. this should infuse roughly p60 billion in additional liquidity. latest information reveal that demand for money remain strong : in december 2008 domestic liquidity grew by 15. 6 percent from the previous year. this double - digit growth in domestic liquidity indicates that there are funds available in the system which could be tapped for investment and other productive activities ; • third, we have opened a us dollar repurchase facility. this is a preemptive move on our part to provide liquidity to the market, not only in pesos but also in dollars. relevant to this, i wish to report that our country ’ s gross international reserves is at an all - time high of $ 39. 2 billion as of end - january 2009 ; • fourth, through the “ credit surety fund ( csf ) ” program which it conceptualized, the bangko sentral ng pilipinas has provided leadership in addressing the problem of our msmes or our micro, small, and medium entrepreneurs in getting loans for lack of collateral. the credit surety program brings together well - managed and wellcapitalized cooperatives with local government units and other donors to provide surety cover, in place of collateral, to guarantee msmes ’ bank loans. the credit surety fund operates at the provincial level and has been launched in cavite, aurora, and bohol. i am happy to report that more provinces have expressed interest in joining this csf program. • fifth, to provide banks better access to additional funds which they can relend to the public, we have increased the budget for

it adjusted its gdp growth projection upward for 2021 to 5. 0 - 5. 5 percent from 4. 0 - 5. 0 percent. moreover, it expects the economy to grow by 7. 0 - 9. 0 percent in 2022 and 6. 0 - 7. 0 percent in 2023 and 2024. another macroeconomic concern is inflation. for monetary authorities around the world, the foremost question is whether the elevated inflation is temporary or permanent in nature. views diverge. a number of central bankers chose to tighten monetary policy to keep their economies from overheating while others opted to take a wait - and - see approach. for the philippines, inflation settled at an average of 4. 5 percent in 2021 after falling to 3. 6 percent in december from 4. 2 percent in november. this is slightly above the official target range of 2 - 4 percent. the elevated inflation this year is driven largely by supply - side pressures and do not warrant monetary interventions at this time. but we expect it to revert to 3. 3 percent in 2022 and 3. 2 percent in 2023. based on survey of selected economists, inflation expectations remain anchored. an important policy question is : should we follow other central banks who have tightened policy at this time in the face of persistently elevated inflation? i disagree. to me, the harm of tightening monetary policy too soon exceeds the harm of moving too late given that the philippine economy is still at its nascent state of recovery. this crisis, while unprecedented in scale and scope, is unlike other crises in the past. previous philippine crises were characterized by rising interest rates cum depreciating peso, aggravated by foreign exchange outflows. by contrast, in this crisis, interest rates are at a historic low and the gross international reserves ( gir ) are more than sufficient. the gir reached usd107. 72 billion in november. this level is equivalent to 10. 2 months ’ worth of goods imports and payments of services and primary income. the received doctrine is that three - months ’ worth of goods imports is sufficient. the level also represents 8. 7 times the country ’ s short - term external debt based on original maturity and 5. 7 times based on residual maturity. thanks to receipts from business process outsourcing firms and remittances from overseas filipinos, we expect gir levels to remain steady or expand even more. i am cautiously optimistic on the economic prospects of the philippine economy. i agree with