Even if the inflation rate turns positive again at an early stage, however, it is unlikely to accelerate further for a while. Looking back at the situation prior to the spread of COVID-19, the inflation rate did not accelerate despite the economy being close to full employment and continuing to register a positive output gap.
These fundamentals include improving quarterly GDP outturn, better business and consumer outlook, ample liquidity in the system, a sound and stable banking system, robust external payments position, and a manageable fiscal deficit. The Philippine economy has the essential elements to post a strong recovery this year.