For the Philippines, the number or the change in exchange rate translation to inflation is less than 0.1 percent.3 Unfortunately, we think that data applies only when the change in the exchange rate is two-way and not very large. Because [in] much of the data that we are looking at, we did not have the kind of exchange rate changes that we were seeing.
In the case of the Philippines, the peso depreciated by nearly 14.0 percent [in October 2022]. Clearly, that kind of exchange rate volatility could disanchor inflationary expectations. Fortunately, we have gone through the worst of it. In fact, when I look at both yield curves and market surveys, they actually expect the central bank to cut policy rates early next year.