Turning to financial stability, the BSP will remain steadfast in working to strengthen the banking system, improve risk management standards, and align our financial regulations with international best practices. Amid turbulence in the global economy, maintaining a market-determined exchange rate will help ensure the stability of the Philippine financial system and the economy as a whole.
On the other hand, forward guidance under the zero interest rate policy commits in advance to maintaining the zero interest rate into the future even when it seems appropriate to raise the policy interest rate, thereby lowering the expected path of short-term interest rates and exerting downward pressure on longer-term interest rates.