philippines ’ investment grade credit ratings throughout the pandemic, reflecting their confidence on the philippine economy ’ s recovery prospects. as the recovery further gains traction, bsp is considering its exit strategy. the broad sequence of the bsp ’ s exit strategy involves the following : recalibration of our monetary operations, unwinding of our liquidity provision, reduction in monetary accommodation ( when prospects for the economy have improved ), and building our buffers in preparation for future crisis episodes. at present, the bsp ’ s key policy rate remains at a historic low of 2. 0 percent. the low interest rate environment has helped support credit activities amid the pandemic. but some groundwork for the bsp ’ s “ exit ” has already been initiated with the significant decline in the bsp ’ s purchases of government securities in the secondary market since the latter part of 2 / 4 bis central bankers'speeches 2020 and the reduction in the provisional advances to the national government from p540 billion to p300 billion. moving on to economic outlook … after a higher - than - target growth of 5. 6 percent last year, the government projects that the philippine economy will grow by 7. 0 to 9. 0 percent this year, and by 6. 0 to 7. 0 percent next year. the latest baseline inflation forecasts are within the target range at 3. 7 percent for this year and 3. 3 percent for next year. in recent weeks, there is heightened uncertainty due to soaring world crude oil prices. based on the bsp ’ s oil price simulation, however, inflation could settle above the target range of 2. 0 to 4. 0 percent, only if crude oil prices average higher than us $ 95. 00 per barrel in 2022 and 2023 on a sustained basis. below us $ 95. 00 per barrel, inflation would settle within the target range. should oil prices reach us $ 120 – 140 per barrel this year, inflation would be 0. 7 – 1. 0 percentage point above baseline in 2022. in brief, inflation would average between 4. 4 – 4. 7 percent under the us $ 120 – 140 per barrel scenario. meanwhile, the current account is expected to post a deficit equivalent to 2. 3 percent of gdp in 2022, driven by rising demand for imported capital goods and inputs for production as the economy continues to recover. overseas filipino remittances is expected to grow at 4. 0 percent this year, after a

and the means to achieve the desired results. the fundamental objectives of economic development in our country remain the same : growth and social justice. instrumentalities to achieve these will have to change in tune with our experience and according to the demands of the time and the responses of the society. in bringing about faster growth we need to address many issues. perhaps one that is most relevant in the context of work that is going on at iima is the issue of productivity. in ensuring a higher growth rate, there is no doubt that we must bring about an increase in the saving rate and, consequently, the investment rate. but at the same time one cannot over - emphasise the need for improving the productivity and efficiency of input use. economists in fact talk about total factor productivity, which identifies the contribution to the increase in output of influences other than increase in factor inputs. the total factor productivity growth thus encompasses the effect not only of technological progress but also of better utilisation of capacities, improved skills of labour, etc. in fact during the period 1960 - 87 the total factor productivity growth of east asia was 1. 9 per cent per productivity and efficiency. contrary to the general impression, the natural resources of our country are not large. from the point of view of long - range sustainability, the need for greater efficiency in the management of natural resources of land, water, minerals, etc. has become urgent. in a capital - scarce economy like ours, there can be no excuse for under - utilisation of capacity. macro - policy framework and micro - management practices must be such as to bring about the desired increase in productivity. while the policy framework must be supportive, industrial structure must be such as to compel firms to continually innovate and to cut costs. the policy environment, the organisational structure and the attitude to work and technology : all these have to be right. needless to say, institutes of management have an important role to play in bringing about this improvement in productivity by sharpening the skills and the vision of managers. - 2the recent development experience has clearly shown that countries which have grown fast are those which have made very heavy investment in education. even as we aim at creating a broad - based educational system, including compulsory education at the primary and secondary levels, we also need institutions of excellence. living as we are in a complex and globally competitive world, institutions of excellence in all disciplines are required to meet the challenges of competition, which in effect is the competition in skills