But we expect it to revert to 3.3 percent in 2022 and 3.2 percent in 2023. Based on survey of selected economists, inflation expectations remain anchored. An important policy question is: should we follow other central banks who have tightened policy at this time in the face of persistently elevated inflation? I disagree.
To me, the harm of tightening monetary policy too soon exceeds the harm of moving too late given that the Philippine economy is still at its nascent state of recovery. This crisis, while unprecedented in scale and scope, is unlike other crises in the past. Previous Philippine crises were characterized by rising interest rates cum depreciating peso, aggravated by foreign exchange outflows.