, relative to its year - high depreciation level of 59 to the dollar in october 2022. as of 8 august, the peso closed at 56. 24 to a dollar. this is partly due to the us fed [ united states federal reserve ]'s decision to raise its own policy rate by 25 bps as well as the rating downgrade by fitch of the us'long - term rating from aaa to aa +. compared to our neighbors, the peso has weakened only slightly. the peso is somewhere in the middle. it is the red bar. that red bar shows that since the beginning of the year, the peso has depreciated by less than 1. 0 percent. this depreciation is smaller than those of our neighbors. as you can see in the red bars, that includes the thai baht, malaysian ringgit, south korean won, and japanese yen. in relation to the exchange rate, external inflows have helped us stabilize the exchange rate as well as helped us maintain our international reserves. on the left, you see the [ overseas ] filipinos'cash remittances. that is the light blue bar. then, you can see the dark blue bar. the light blue bar is bpo [ business process outsourcing ] revenues. those have been growing. remittances and bpo revenues together amount to more 2 / 4 bis - central bankers'speeches than six times net foreign direct investments - which is shown in the right picture - which has somewhat declined but, thankfully, is a smaller part of our [ forex ] inflows. as a consequence of these inflows, we have been able to maintain ample [ forex ] reserves. these reserves provide a cushion against negative global spillovers. our foreign reserves have hovered around us $ 100 billion, and we expect it to remain at roughly the same level in the coming years. we need these reserves because, we think, the world will slow down next year and in the following years, especially [ because ] of what the fed has done. as you know, the fed has tightened so aggressively that it is bound to slow down not just the us economy but also the rest of the world. this poses risks to us and other emerging markets because financial accidents could happen. for example, [ the collapse of ] svb [ silicon valley bank ] and credit suisse, which, thankfully, so far, have left us unscathed.

eli m remolona : rising to the challenge - the bangko sentral ng pilipinas speech by mr eli m remolona, jr, governor of bangko sentral ng pilipinas ( bsp, the central bank of the philippines ), at the philippine economic briefing, laoag, 14 august 2023. * * * congressman angelo marcos barba, vice governor cecilia araneta marcos, batac city mayor albert chua, laoag city mayor michael marcos keon, guests from various sectors, partners in nation - building, naimbag a bigat! i am happy to be in laoag for the first post - state of the nation address economic briefing. i would like to talk about just three things : inflation, exchange rate pressures, [ and ] our banking system, including its role in sustainability. let me start by discussing the recent trend in inflation. the blue line that you can see is the inflation rate for headline inflation. this is the part of inflation that is driven more by supply - side factors, and this is the part that the central bank has less control over. the red line is inflation based on the core cpi [ consumer price index ], which excludes the volatile components of prices, namely food and energy. this is the one that is more easily subject to monetary policy. from the peak of 8. 7 percent in january, headline inflation slowed to 4. 7 percent in july. this is due to improving domestic food supply conditions and lower global oil prices. but core inflation has remained high at 6. 7 percent, although it has started to decline. that decline is due mainly to monetary policy. so, how did we bring about this inflation downtrend? the bangko sentral ng pilipinas ( bsp ) responded to inflation by aggressively raising its policy rate. as of today, we have raised the policy rate by [ a cumulative ] 425 basis points ( bps ). in the last two meetings, we have paused. we are reassessing the situation. that is where we stand. we will go where the data leads us, but sometimes, the data does not seem to know where to go. the good news is that inflation expectations are still well - anchored. the green line in the picture shows inflation expectations for this year have evolved. the blue line is more important. it is about [ inflation ] expectations for 2024. the red line is about 2025. they are very well -