As we move into and through next year, inventory investment is likely to play a smaller role in supporting the growth of output, and aggregate activity should increasingly be propelled by stronger gains in final demand for reasons that I will discuss shortly. Recovery in the labor market typically lags that in output, and the employment situation remains quite weak.
Against this background, I will discuss the outlook for the Philippine economy as well as financial market concerns and the BSP’s approach to safeguard against financial instability. This new wave of market volatilities Let me begin by considering what I see are the principal sources of the impulses for this “new wave” of market volatilities. First, the series of Fed announcements and actions.