but across the globe. nevertheless, we are seeing early signs of recovery. the manufacturing purchasing managers index has risen to 49. 9 in november, close to the 50point expansion threshold. at the same time, the manufacturing volume of production index has also improved. the gradual easing of lockdown measures and promising developments regarding vaccines 1 / 5 bis central bankers'speeches have contributed to improvements in business operating conditions. latest surveys indicate improved optimism of businesses and consumers, however. the overall business confidence index reverted to positive territory at 10. 6 percent in q4 from – 5. 3 percent in q3. this optimism in the last quarter of 2020 was attributed to the reopening of businesses amid the “ new normal, ” easing of community quarantines nationwide, seasonal factors such as an uptick in demand during the holiday season and the start of the milling season, and the increase in volume of sales and orders. meanwhile, the overall consumer confidence index was more optimistic at – 47. 9 percent in q4 from – 54. 5 percent in q3. the improved outlook during the current quarter was brought about by expectations of more jobs and permanent employment ; additional and high income ; effective government policies and programs such as the social amelioration program and the plant, plant, plant program ; reduced community restrictions, the reopening of businesses, and the expected end of the covid - 19 pandemic when vaccines are made broadly available. another cause of optimism are the results of the google mobility report, which provides insights on how people ’ s movements have changed throughout the pandemic. the report details how activities for retail, recreation and workplaces continued to improve for the philippines, suggesting a rise in economic activity. notably, grocery and pharmacy figures were shown to come close to the baseline period, approaching pre - quarantine levels. consequently, numbers under “ residential ” gradually declined to 18 percent as of december 7, 2020 — compared to their peak of 43 percent in april 2020 — implying that people are staying less at home. however, transit station activities remained subdued at – 46 percent given the limited public transportation options at present. the unemployment rate moderated to 8. 7 percent in october 2020 from a high of 17. 7 percent in april, during the strictest period of lockdown. the unemployment rate moderated to 8. 7 percent in october 2020 from a high of 17. 7 percent in april, during the strictest period of lockdown. price pressures remained manageable

in 2020, with headline inflation averaging at 2. 6 for the entire year. this is within the government inflation target of 2 to 4 percent. in december, inflation rose to 3. 5 percent from 3. 3 percent in november, driven mainly by adverse weather - related disturbances and higher international oil prices. meanwhile, the philippine banking system has remained resilient and stable, with sufficient capital buffers to withstand shocks. as of end - june 2020, the capital adequacy ratio of universal and commercial banks was at 16. 3 percent on a solo basis and 16. 7 percent on a consolidated basis, well above the 10 percent regulatory requirement of the bsp and the international standard of 8 percent. liquidity conditions remain ample, supported by the liquidity - enhancing measures of the bsp. 2 / 5 bis central bankers'speeches domestic liquidity continues to grow at a double - digit pace, rising by 11. 8 percent to around ₱13. 5 trillion in october, albeit slightly slower than the 12. 2 - percent growth in september. meanwhile, growth in outstanding loans of universal and commercial banks eased to 1. 9 percent in october from 2. 6 percent in september. the overall slowdown in bank lending growth reflects the combined effects of muted business confidence and the banks ’ stricter loan standards attributed mainly to continued disruptions in business operations. on a year - to - date basis, the philippine peso appreciated against the us dollar by 5. 37 percent, to close at 48. 06 pesos to the us dollar on december 28, 2020 from its end - december 2019 closing rate of 50. 64 pesos to the us dollar. the peso has appreciated along with the taiwan dollar, chinese yuan, south korean won, japanese yen, singaporean dollar, and malaysian ringgit. let us now turn to the macroeconomic prospects over the near term. the prevailing view is a “ long, uneven, and uncertain ascent ” toward global economic recovery. there remains considerable uncertainty if and how global trade and supply chains will evolve. the imf, in october 2020, forecasted that world output would contract by 4. 4 percent in 2020 and revert to an expansion of 5. 2 percent in 2021. beyond 2021, world output is projected to decelerate to ( growth of? ) around 3. 6 percent by 2024, indicating a delayed return to the growth trajectory before the pandemic. in any case, some recovery is already being seen as major economies