We assess the balance of risks to the inflation outlook to remain broadly balanced for 2019 and 2020, before tilting to the downside for 2021. Weaker global economic prospects continue to temper the inflation outlook. Going forward, the BSP will continue to monitor price and output conditions to ensure that monetary policy remains appropriately supportive of sustained non-inflationary economic growth over the medium term.
In terms of financial stability safeguards, we now have a deeper policy toolkit to deal with external and domestic shocks to the system. These tools will allow the BSP to respond to the formation of imbalances and address the build-up of system risk. First, we continue to implement a flexible exchange rate regime as our first line of defense against external shocks.