There were bumps along the way as the ECB brought short-dated interest rates to negative territory, as tensions in Ukraine increased, and as multilateral bodies continued to predict weak global growth (the IMF described it as “mediocre”.) Throughout this period, our own peso GS curve flattened while peso tracked the DXY movements.
Such irregular shifts in global market behavior confirm the need for economies to insulate themselves from spillovers from these external volatilities. In the BSP, we have long subscribed to the idea that the best way to do this, is to make the difficult and tough choices that would keep our own house in order.