8  Developments in Global Markets and Economic Policy Uncertainty The extended low interest rate environment, resulting in meagre returns on international investments, was in large part the consequence of central banks’ use of "unconventional" policies, such as quantitative easing and negative interest rates. But a long-term trend decline in the "neutral" rate of interest that balances economic activity also appears to have contributed.
This approach is most appropriate for a small open economy like the Philippines. Further, since the adoption of the interest rate corridor (IRC) system in 2016, the BSP has gained sufficiently flexibility in relying on auction-based instruments for liquidity management to complement the overnight reverse repurchase borrowing rate as the policy rate signal.