volatility into the economy. on the contrary, a monetary policy geared to delivering low and stable inflation contributes to creating a favourable macroeconomic environment for employment creation and investment decisions. price stability reduces interest rate premia, and thus the cost of capital, and allows wage and price - setters to focus on productivity, costs and competitive factors, rather than wasting resources on protecting themselves against uncertainty about future inflation. second, the negative productivity developments i have just discussed have not only been a drag on economic activity, they have also put significant temporary upward pressure on inflation, especially after 2001. the increase of unit labour costs due to mediocre productivity, combined with other supply shocks such as oil price increases, have contributed to a level of inflation over the threshold of our definition of price stability of less than 2 %. had we not had a highly credible monetary policy, we would not have been able to anchor solidly medium and long - term inflationary expectations in the euro area and we would have had to pay a significant price in terms of growth and job creation. developments in monetary aggregates and their impact on inflation let me now turn to the important role played by the monetary analysis in the ecb ’ s monetary policy strategy and interest rate decisions. as you know, we are cross - checking the results of our economic analysis with those of our monetary analysis. allow me to recall that the strong long - term relationship between monetary growth and inflation is one of the best documented empirical findings in economic literature. many studies have documented this relationship in the euro area, demonstrating that it is particularly close over longer horizons. i will add that the national currencies that had the highest level of credibility prior to the introduction of the euro and against which the euro has been benchmarked, all relied on a monetary policy framework embodying a role for monetary analysis. given the ecb ’ s mandate to maintain price stability, the necessarily medium - term orientation of its strategy to do so and the continuity between the most credible national currencies and the euro, assigning an important role to the analysis of monetary developments is both necessary and very useful. the monetary pillar of the ecb ’ s monetary policy concept has contributed importantly to the success of our monetary policy and to the anchoring of long - term inflation expectations. in recent years, money has grown strongly while, at the same time, inflation developments have remained under control. this begs the question of how the ecb has interpreted strong monetary growth. the

amando m tetangco, jr : the philippine economy – building resilience in a time of uncertainty remarks by mr amando m tetangco, jr, governor of the central bank of the philippines ( bangko sentral ng pilipinas ), at the consular corps of the philippines ’ monthly general luncheon meeting, makati city, 29 october 2008. * * * minister and consul general sobashima, acting dean of the consular corps of the philippines, honorable consuls - general, officers and staff of the philippine consular corps, ladies and gentlemen, good afternoon. it is a pleasure to finally address the diplomatic community. your organizers would recall that we have been trying to get our schedules “ together ” since january this year. in fact, we were first set to meet in february, but something came up on my side. then in august, but something came up on your end. then, today. ( i suppose the “ stars ” have all finally aligned today, so to speak, so here we are. ) what ’ s interesting is during all this time, the markets have moved quite significantly. consider the table shown. i ’ ve compared some important financial indicators for feb 27, aug 27 – the two previously scheduled dates – and yesterday. you will note that all of these have turned “ south ” as they say. but more dramatically so in the last two months. the peso dollar exchange rate has moved from p40. 33 to p45. 73. yesterday it was quoted at p49. 105. at close of morning trade today, the peso stood at p49. 14. the 5 - year credit default swap spread, which is a measure of the market ’ s perception of the country ’ s credit worthiness, has more than doubled from 248 to 660 bps. the same can be observed on the spread over the rop30, which moved from 260 to 649 bps. the psei, on the other hand, lost close to half its value from 3, 105 in february to 1, 704 pts at yesterday ’ s close. the regional financial markets followed the same trends – regional currencies weakened, credit spreads widened, and stock markets declined. before any, or all of you cry “ the sky is falling ” – like the little chicken in that children ’ s fable who got hit on the head by a falling acorn, – let me share with you some good news : • even as the numbers