, the philippines had a record 21 - year uninterrupted growth. in fact, the economy has started to bounce back as businesses reopen following the easing of restrictions and the onset of the vaccination program. higher consumer spending, infrastructural push, accommodative monetary policy, and global recovery will be the main sources of the recovery. government authorities forecast that the economy will grow within the range of 6. 5 to 7. 5 percent for this year and 8 - 10 percent in 2022. while inflation will be elevated in the first half of 2020 due to supply side factors, we see it settling 1 / 5 bis central bankers'speeches within the target range by the end of 2021 as the impact of supply - side factors subside. overall external position remains healthy. the country ’ s gross international reserves ( gir ), which totaled usd108. 7 billion as of endjanuary 2021, are hefty. they are equivalent to 11. 6 months ’ worth of imports of goods and payments of services and primary income. this is well above the ideal three months ’ worth of imports cover requirement. domestic liquidity or m3 posted a 9. 0 percent annual growth to about ₱14. 0 trillion in january 2021. the money supply increased mainly on account of the simultaneous expansion in domestic claims and net foreign assets ( nfa ) by 5. 0 percent and 21. 8 percent, respectively. while remittances from overseas filipinos posted a contraction of 0. 8 percent in 2020, the same is actually good news since it is much better than the two - digit decline forecasted by many analysts. we expect of remittances to grow by 4. 0 percent this year. the philippine peso recorded an average of ₱48. 65 / usd1 as of 1 march 2021, making it one of the strongest currencies in the world amid the pandemic. the country ’ s strong macroeconomic fundamentals, low debt - to - gdp ratio, build - up of gross international reserve, and resilient banking system are expected to further boost the strength of the local currency. in sum, these numbers suggest a resilient philippine economy. even before the pandemic, we had a long history of structural reforms and prudent macroeconomic policies, which paved the way for the build - up of ample capital and liquidity buffers in the banking sector. during the pandemic, the

their capital base. the average car of the banking system was maintained well above regulatory and international standards despite some decline caused by the new requirements of the revised capital framework which is patterned after the basel 2 accord. the revised framework is considered a more risk - sensitive measure of a bank ’ s solvency position. however, we continue to closely monitor developments, particularly on the spillover effects from the slowdown in the us and the global economy as well as higher risk aversion brought about by the financial market turmoil in the west. these could pose downside risks to output growth that could impact negatively on the banking system ’ s growth. lastly, the country ’ s external payments profile remains a major source of strength for the economy. for the first six months of 2008, the bop surplus has been sustained at us $ 1. 9 billion. there is resilience here because the existence of a bop surplus provides space to accommodate the volatilities of both the export and investment markets. we acknowledge that there are risks given the increase in the trade deficit but remittances and income receipts from services coming from a vibrant bpo industry should provide the needed support. for the first quarter of 2008, the current account remained in surplus of about 3 percent of gdp despite a wider merchandise trade deficit due to higher oil and food costs. the stability of the current account is due to the sustained expansion in remittances. latest data show remittances for jan - may 2008 totaled us $ 6. 8 billion, growing year - on - year by 14. 7 percent from the comparable period a year ago. as a result of the bop surplus, our gross international reserves ( gir ) increased further to us $ 36. 7 billion as of end - june 2008. at this level, the gir is equivalent to 6. 0 months ’ worth of import cover and 2. 9 times short - term external debt based on residual maturity. the external debt ratio has also improved. with the build - up in the gir, the bsp, together with the national government as well as private corporations, were able to prepay some obligations. this has led to the appreciable decline in the country ’ s total external debt to 35. 5 percent of gdp as of end - march 2008 from 72. 9 percent in 2001. what is the outlook in the near - term? reflecting the impact of the slowdown in the us economy and the higher oil and food prices, economic