First, while the challenges appear staggering and mainly beyond our control, the Philippines is in the best macroeconomic shape it has been in two decades as a result of the significant structural and policy reforms undertaken over the recent years, making it more resilient in the face of global challenges.
Inflation has been on a trend decline, with average headline inflation for the first 11 months of 2007 at 2.7%, way below last year’s 6.2% as well as the target of 4-5%. The external position is in substantial surplus of around $ billion, more than double last year’s level, due mainly from the continued strength of the current account.