The finalization of the principles-based taxonomy will play a critical part here, particularly in opening the door for the inflows of capital to relevant economic activities. The BSP’s Sustainable Finance Framework which was released in April 2020 encourages the offering of green and sustainable finance instruments to support such economic activities.
Second, the decline in inflation over the last year should be an important moderating force on wage change going forward, partially offsetting the first factor. Third, the set of forces that have restrained inflation over the last year, the factors I have referred to as favorable supply shocks, will continue to restrain inflation. The unemployment rate is well below most estimates of NAIRU.