Philippines: Selected Issues
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International Monetary Fund. Asia and Pacific Dept
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Publication Date:
15 Dec 2022
eISBN:
9798400227561
ISBN:
9798400227561
Language:
English
Keywords:
inflation expectation; monetary policy interest rate; FXI response; FXI effectiveness; monetary policy response; Central bank policy rate; Inflation; Exchange rate pass-through; Exchange rates; Output gap; Global
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The Philippine economy is recovering from the pandemic, but the outlook remains uncertain with risks tilted to the downside. This note adds to the Staff Report’s discussion of managing downside risks and the scenario analysis, to illustrate how the Integrated Policy Framework can help to analyze the use of multiple instruments and policy tradeoffs.2

Abstract

The Philippine economy is recovering from the pandemic, but the outlook remains uncertain with risks tilted to the downside. This note adds to the Staff Report’s discussion of managing downside risks and the scenario analysis, to illustrate how the Integrated Policy Framework can help to analyze the use of multiple instruments and policy tradeoffs.2

Application of the Integrated Policy Framework to the Philippines1

The Philippine economy is recovering from the pandemic, but the outlook remains uncertain with risks tilted to the downside. This note adds to the Staff Report’s discussion of managing downside risks and the scenario analysis, to illustrate how the Integrated Policy Framework can help to analyze the use of multiple instruments and policy tradeoffs.2

1. Philippines’ economic recovery accelerated in 2022Q1, but a confluence of global shocks weigh on prospects ahead. Growth is expected to slow to 5 percent in 2023 and inflation has risen sharply, surpassing the high end of the government target range of 3.0 percent ± 1.0 percentage point since March. The current account deficit is expected to widen further in 2022 as the trade gap broadens, driven mainly by high global commodity prices. Financial conditions have tightened, raising the external and domestic borrowing costs for both the public and private sector, at a time when government debt has increased significantly due to pandemic related spending. In addition, downside risks to the baseline projections are considerable, including from intensifying spillovers from Russia’s war in Ukraine, a deepening of the global slowdown, and a surge in COVID-19 cases from more deadly variants.

2. Policy responses under downside scenarios can be analyzed using the IMF’s Integrated Policy Framework (IPF). The IPF aims to provide a systemic analytical approach to selecting an appropriate mix of policies for achieving macroeconomic and financial stability. It jointly considers the role of monetary, exchange rate, macroprudential and capital flow measures, and their interactions with each other and other policies. The work on the IPF draws together economic models, empirical analysis, and a review of country experiences. A key finding of the IPF is that optimal policy combinations depend on the country’s initial conditions and specific characteristics, and the underlying financial frictions and nature of shocks. In other words, optimal policies will not be the same across countries and will differ according to the situation.

3. The IPF model used in this note is an estimated linearized variant of Adrian et al, 2021. Adrian et al 2021, expands the standard class of New Keynesian open economy models to include financial frictions that capture key features of financial stress episodes in emerging market economies. Specifically, the model includes a nonlinear balance sheet channel to capture capital flow and exchange rate pressures when global risk sentiment deteriorates and allows exchange rate fluctuations to affect domestic financial conditions to account for the effects of foreign currency mismatch. An indexation mechanism is included to proxy for imperfect monetary policy credibility. The model is estimated using Philippine data and Bayesian techniques. Policy rules are not formally optimized; instead we use the scenarios to compare policy outcomes.

4. The note is structured as follows. Section A discusses initial conditions and characteristics of the Philippine economy that are relevant for the IPF. Section B constructs two illustrative downside scenarios: in the first, inflation remains stubbornly high in the Philippines and globally, financial conditions around the world continue to tighten, triggering a “risk-off” environment with significant and disorderly capital outflows from emerging market economies. The second scenario assumes a similar “risk-off” environment but allows for a higher degree of pass-through from the real exchange rate to core inflation, importantly via a steeper import price Philips curve. In both scenarios, the role of fiscal policy and the impact on government debt are included but capital flow measures and macroprudential policy, which are better suited to address financial stability risks, are not considered.3 While the results depend on the full model specification, in section C we highlight two key economic channels of relevance for the IPF: the effectiveness of foreign exchange intervention in leaning against the wind of global capital flows and preventing sharp exchange rate movements; and the degree of exchange rate pass-through to inflation and output. In section D, we discuss caveats around the model and the importance of calibrating model parameters to the initial conditions and characteristics of the Philippine economy.

A. Initial Conditions, Country Characteristics, and Underlying Frictions

5. An economy’s initial conditions, including the availability of policy space, are a key factor in determining how well it can weather a negative shock. The Philippine economy remains fundamentally sound despite the deep contraction in 2020, thanks to sustained reforms and disciplined macroeconomic policies that contained macro-financial vulnerabilities and mitigated the effects of the pandemic. The negative output gap is expected to close this year following strong GDP growth in 2021 and the first half of 2022. The exchange rate is in line with fundamentals and desirable policies and there are large reserve buffers (Staff Report Appendix 1). While inflation risks have increased significantly, the Philippine central bank (Bangko Sentral ng Pilipinas) has a credible inflation targeting framework and the policy instruments to anchor inflation expectations, and the government still has some fiscal space to respond to adverse shocks. These initial conditions leave the Philippine economy well positioned to manage downside risks.

6. Country characteristics, including financial frictions and vulnerabilities, also determine the set of appropriate policy options.4 For the Philippines, the optimal response to shocks depends on the degree of currency mismatches, the depth of FX markets, and external trade invoicing practices.

  • Currency mismatches on borrowers’ balance sheets. In the presence of currency mismatches, an exchange rate depreciation is a source of vulnerability as it increases the value of unhedged foreign currency debt and the risk of defaults. Creditworthiness and asset quality deteriorate, lending capacity weakens and borrowing costs increase.

  • The depth and liquidity of the foreign exchange market. Intervention is less likely to be successful in a deep and liquid FX market but may potentially have traction in a shallow illiquid market.5

  • Dominant currency pricing (DCP).6 With DCP, exports are priced in dollars and foreign demand is not sensitive to changes in the local currency exchange rate. The short-term response of trade volumes to exchange rates is likely to be manifested mostly through imports with little competitiveness boost to exports.7

7. Philippines’ banking system has only limited levels of currency mismatch, but further analysis is needed on exposures in non-financial corporates (NFCs). As reported in the Financial Sector Assessment Program, the level of banks’ direct cross-border exposure is relatively low and are mostly to service foreign workers, while dollarization is moderate. 8 Cross-border exposures represent 10 percent of bank assets and 6 percent of liabilities, and foreign currencies represent 18 percent of assets and 20 percent of liabilities. Banks’ exposures to foreign exchange risks are tightly regulated, with separate licensing requirements to conduct foreign exchange transactions and strict limits on banks’ net open positions. The limited exposures in banks help to reduce Philippines’ exposure to negative balance sheet effects from an exchange rate depreciation. However, risks could still arise in individual banks and further analysis outside the banking sector is needed. As noted in the FSAP, banks are indirectly exposed to international spillovers through NFCs (which represent around 80 percent of bank lending).

uA001fig01

Bank Assets and Liabilities, by Location and Currency

(In percent of total, as at 2022Q1)

Citation: IMF Staff Country Reports 2022, 370; 10.5089/9798400227561.002.A001

Source: BIS Locational cross-border data.

8. The Philippine foreign exchange market is subject to periods of illiquidity. The FX market experiences periods of liquidity tightening, as indicated by spikes in the bid-ask spread. Another common proxy measure is exchange rate volatility, which experienced a sharp spike at the onset of the pandemic, suggesting a tightening in FX market liquidity at that time. Turnover data is also used to assess market liquidity, subject to challenges and considerations noted by Moreno et al 2019, and BIS 2017. According to BIS data, turnover in the Philippine peso was less than 1 percent of global OTC FX turnover in April 2019, on a net-net basis. Internal IMF analytical work has found that an abrupt change in a country’s UIP premium may be consistent with period of shallowness or illiquidity in the FX market, during which there are too few market participants to absorb an external shock.9 The UIP premium for Philippines shows periods of illiquidity, such as during the 2013 taper tantrum. The UIP premium increased at the onset of COVID-19, though remained within the range of recent years.

uA001fig02

Foreign Exchange Turnover by Currency, 2019

(In percent of total turnover)

Citation: IMF Staff Country Reports 2022, 370; 10.5089/9798400227561.002.A001

Sources: BIS Triennial Survey, 2019. Turnover of OTC foreign exchange instruments, by currency. AUD=Australian dollar; NZD = NZ dollar; THB = Thai baht; PHP = Philippine peso; MYR = Malaysian ringgit.
uA001fig03

Bid-Ask Spread, 2016–2020

(Calculated as Ask-Bid)

Citation: IMF Staff Country Reports 2022, 370; 10.5089/9798400227561.002.A001

Sources: Bloomberg.
uA001fig04

Exchange Rate and Volatility

(US$/Philippine peso)

Citation: IMF Staff Country Reports 2022, 370; 10.5089/9798400227561.002.A001

Source; Bloomberg LP
uA001fig05

UIP Premium

In log differences

Citation: IMF Staff Country Reports 2022, 370; 10.5089/9798400227561.002.A001

Sources: Bloomberg, Consensus Economics.

9. DCP is prevalent in Philippines’ external trade and constrains the extent to which the exchange rate acts as an automatic stabilizer. Between 2014 and 2019, around 92 and 87 percent of exports and imports respectively, were priced in US dollars.10 Since DCP reduces the benefits of exchange rate depreciation on exports, the short-term response of Philippine trade to exchange rates is manifested mostly through imports. Nevertheless, there are countervailing effects to DCP. Export income will increase when converted to pesos, benefitting exporting firms and by extension consumption. Similarly, a depreciation will raise the peso-denominated value of remittance inflows when they are converted into domestic currency by households, and increase the competitiveness of tourism-related services exports, which are priced in pesos.

10. The above analysis of frictions suggests a possible role for FXI in the Philippine policy toolkit.11 While there is only moderate currency mismatch evident in the banks and DCP does not void the exchange rate’s automatic stabilizing role, the shallowness of the foreign exchange market, along with large FX reserves, implies FXI can be used to improve policy tradeoffs and mitigate downside risks. By limiting exchange rate and inflationary pressures, FXI eases the inflation-output trade-off for interest rate policy and enables better inflation-output stabilization. In the process, FXI attenuates the impact of shocks on the UIP risk premium and private borrowing spreads. This benefit is potentially larger if inflation expectations are less anchored or are at risk of being de-anchored, or if the level of exchange rate pass-through to inflation is high. However, an assessment of both the benefits and costs of FXI is needed to determine whether and how it should be used as part of the policy toolkit.

11. FXI should be conducted within a clear operational framework, taking account of likely effectiveness. As discussed in Lafarguette et al 2021, FXI may lead to either the depletion of official FX reserves or a costly accumulation of them, which entails risks to central banks. A clear intervention framework is needed, which supports sound risk management practices for FXI and takes account of FXI effectiveness (paragraph 17). Lafarguette et al note several properties for intervention triggers, including that they should: (1) depend on market conditions; (2) depend on the exposure and resilience of the economy to exchange risk; (3) ensure that interventions are effective under the central bank FXI budget constraint; (4) capture asymmetries between appreciation and depreciation; (5) be operationalizable. They also suggest components of program design, including: communication, governance, modalities, transparency, accountability. FXI should be aligned with the monetary policy stance and expected fiscal actions.12 The Philippines does not publish FXI data, but estimates provided by Adler et al 2021 show periods of active intervention in the past (e.g., 2005–2010).

uA001fig06

Philippines: Estimated FXI

(In percent of 3-year moving average GDP, by calendar year)

Citation: IMF Staff Country Reports 2022, 370; 10.5089/9798400227561.002.A001

Sources: Adler, Gustavo, Kyun Suk Chang, Rui C. Mano, and Yuting Shao. 2021. “Foreign Exchange Intervention: A Dataset of Public Data and Proxies,” IMF Working Paper Series 21/47, International Monetary Fund, Washington D.C.

B. Scenario-Based Analysis

Two scenarios were considered where near-term risks to the outlook materialize in increasing severity relative to staff’s baseline.

12. In scenario 1, shocks to global inflation and risk premia lead to a disorderly tightening of global financial conditions. Global supply disruptions and elevated commodity prices trigger more persistent price pressures and wage compensation demands that become embedded in inflation expectations (cost-push shocks). This leads to higher inflation and stronger monetary policy tightening by major foreign central banks, contraction in the foreign economy, and capital outflows from emerging markets. In the context of stressed and illiquid financial market conditions, the Philippines is subject to a risk-off shock to the UIP premium and domestic risk premium, which results in a weaker exchange rate and an increase in the long-term rate (shocks are listed in Table 1).

Table 1.

Philippines: Sum of Squared Deviations of Output and Core Inflation

article image

13. Scenario 2 considers higher exchange rate pass-through to inflation, in the context of a similar “risk off” environment as in scenario 1. The range of staff’s estimates of exchange rate pass-through for EMDEs and countries with high USD trade invoicing suggests potential upside risk to staff’s baseline estimate, which is consistent with scenario 1 (Staff Report paragraph 35 text chart, and paragraph 18 below). Scenario 2 allows for a steeper import price Philips curve and larger and more persistent UIP risk premium shocks. This results in about twice the exchange rate pass-through to core inflation as in scenario 1, and thus higher inflation despite the fact that the two scenarios have similar degrees of depreciation.

14. Each scenario has the following policy combinations: (i) monetary policy interest rate; (ii) monetary policy interest rate and FXI; (iii) monetary policy interest rate and fiscal policy; (iv) monetary policy interest rate, FXI and fiscal policy. The assumed fiscal policy response is in the form of 0.5 percent of GDP of government spending in each of the first and second years which is withdrawn in subsequent years for a cumulative 1.8 percent of GDP fiscal stimulus over 5 years. The domestic interest rate policy follows a Taylor-rule type reaction function, where the policy rate responds to the output gap and expected inflation, with additional monetary policy shocks added to capture the aggressive monetary policy response to high inflation and temporary deviation from the estimated reaction function. FXI follows a policy rule in which the central bank intervenes in the FX market to partially offset nominal exchange rate movements. Such interventions have a direct impact on the level of central bank FX reserves. Figure 1 shows model responses in terms of deviation from baseline under both scenarios for: the output gap, nominal policy interest rate, core inflation, real and nominal exchange rates, long-term interest rate, the size of FXI, and the foreign variables.

Figure 1.
Figure 1.
Figure 1.

Downside Risk and Policy Scenarios

Citation: IMF Staff Country Reports 2022, 370; 10.5089/9798400227561.002.A001

In scenario 1, the response for the exchange rate, inflation, and monetary policy depend mainly on whether or not FXI is used.

  • In the absence of FXI, the shock to the Philippines’ UIP risk premium causes a 10 percent nominal exchange rate depreciation, increasing core inflation by 150 basis points (bp) relative to the baseline. Monetary policy is tightened by around 130 bp to return inflation to target (but does not rise as quickly as inflation resulting in an initial fall in the real policy interest rate). The contraction in foreign demand weighs on net exports and pushes the output gap negative. When the policy interest rate is used on its own, the output gap widens to about -2.5 percent after 4 quarters; with fiscal policy the output gap widens to -2.1 percent.

  • When FXI is used, it reduces the nominal exchange rate depreciation from 10 percent to 4 percent, which all else equal removes some of the pressure on inflation and the need for tighter monetary policy. The impulse response for core inflation peaks at around 115 bp, and for the policy rate at around 80bp. The use of FXI thus improves the policy tradeoff, as inflation peaks at a lower level and can be returned to target with a less negative output gap. When the policy interest rate is used with FXI, the output gap widens to about -2.1 percent after 4 quarters, but with fiscal policy the output gap improves to about -1.7 percent. The use of FXI leads to a cumulative loss of foreign exchange reserves of 2.6–2.8 percent of GDP in the first four quarters. As the shocks prove temporary, the FXI is gradually reversed from the fourth quarter, such that the cumulative loss of foreign reserves after 20 quarters is 0.9 percent of GDP.

  • In scenario 2, the responses for the exchange rate, inflation, and monetary policy again depend largely on the use of FXI.

  • In the absence of FXI, the UIP risk premium shock again leads to a 10 percent nominal exchange rate depreciation. However, the larger exchange rate pass-through applied to the similar exchange rate path causes core inflation to rise by more relative to scenario 1, peaking at 2.25 percent in the fourth quarter relative to baseline. The policy interest rate peaks at around 2.6 percent. The output gap widens to -3.2 percent when only interest rate policy is used, and about -3 percent when interest rate policy is supported by fiscal policy.

  • When FXI is used it again stabilizes the exchange rate. As the exchange rate pass-through is stronger, monetary policy is tightened more than in scenario 1. However, by offsetting some of the depreciation the FXI reduces the extent to which interest rates would have to rise. Core inflation peaks at around 1.5 percent above baseline, while the nominal policy interest rate tightening peaks at about 2 percent. When the policy interest rate is used with FXI, the output gap widens to about -2.9 percent after 4 quarters, but when fiscal policy is also used the output gap widens by less to -2.6 percent. As the persistence and size of UIP shocks has increased in this scenario, there is more depreciation pressure on the exchange rate, necessitating a larger intervention to stabilize the exchange rate at a similar level as in scenario 1. Over the first 4 quarters the loss of foreign reserves is about 3.1 percent of GDP, after which reserves are subsequently with a cumulative reserves loss after 20 quarters of 0.9 percent of GDP.

15. A combination of modest fiscal expenditure with monetary tightening and FXI provides the most favorable outcome, in terms of reducing output loss. FXI in the model offsets the exchange rate shock and removes inflation pressure. A monetary policy and FXI response combined with fiscal stimulus would also limit the deterioration in the output gap. The outcomes for inflation are similar with or without fiscal stimulus, given the stimulus size. However, increasing the fiscal stimulus would result in higher inflation and higher interest rates, crowding out private domestic demand. All else equal, if the exchange rate pass-through has increased, using FXI to stabilize the exchange rate can have a stronger benefit in terms of reducing inflation pressure. These results are also shown in the table below, which reports squared deviations of inflation and output gap, as a measure of variance.

16. Staff estimates suggest that government debt remains sustainable when fiscal policy support is deployed in the scenarios. Using the Fund’s DSA framework as a supplement to the IPF model used, we find that increased fiscal expenditure, lower GDP, tax losses (caused by lower nominal GDP applied to the baseline projection tax ratio), and higher interest rates all raise the debt ratio. Valuation changes are also considered, reflecting the effect of the exchange rate depreciation on the peso-denominated value of foreign debt (about 30 percent of the debt stock). The impact on debt from these channels is mitigated by inflation, which is assumed to pass through one-for-one to the GDP deflator, increasing nominal GDP and lowering the debt ratio.13 Both scenarios imply a similar increase in the debt ratio relative to the baseline projection, though the debt ratio is lower in scenario 2 largely due to the effect of higher inflation in scenario 2 on the GDP deflator. The results are sensitive to the assumptions used for the analysis. Varying the assumptions can cause debt to peak at higher levels, but debt will eventually decline due to the transitory nature of the shocks and the envisaged size of the fiscal stimulus. Results would be different for example, with larger fiscal stimulus, or if inflation expectations became unanchored.

uA001fig07

National Government Debt

(In percent of GDP)

Citation: IMF Staff Country Reports 2022, 370; 10.5089/9798400227561.002.A001

Sources: IMF staff calculations.

C. Key Channels

17. The ability of FXI to support monetary policy depends on the effectiveness of FXI, and the exchange rate pass-through to inflation. Most studies of FXI effectiveness use high frequency data to investigate the impact of FXI on the exchange rate. Using data from 2010 to 2015, Guinigundo 2019 finds that BSP’s intervention is mainly in the spot market and has been effective at containing same-day exchange rate volatility, and that larger volumes or sustained central bank interventions are significant in managing large fluctuations in the exchange rate. Using a VAR with a shock to global capital flows, Blanchard, Adler and de Carvalho-Filho 2015 compare estimation results for countries that intervene against flexible exchange rate countries that don’t intervene and find that a 1 percent of GDP intervention results leads to an appreciation that is 1.5 percent less than it would have otherwise been.

18. The estimate of exchange rate pass-through in scenario 1 is similar to the authorities’ estimates and the literature.14 In scenario 1 a 1 percent real depreciation in the exchange rate leads to approximately 0.06 ppt increase in core inflation. This is broadly consistent with the authorities’ estimates and the literature. In response to a 1 percent nominal depreciation, the authorities estimate a 0.06 ppt increase in headline CPI inflation after one year, rising to 0.08 ppt after two years. For a 1 percent nominal depreciation, Forbes et al 2020 estimated a pass-through for the Philippines of slightly below 0.1, which is below their estimate for emerging markets as a group, of 0.23. Guinigundo 2017 finds that the exchange rate pass-through declined after the adoption of inflation targeting in the Philippines and estimated a short-run pass-through of 0.037 for the inflation targeting period, rising to 0.393 for long-run pass-through.

D. Conclusion, Caveats and Future Work

19. The coordinated use of fiscal, monetary, and exchange rate policies may help alleviate policy tradeoffs in downside scenarios. Monetary policy should be the first line of defense against persistent inflationary pressures, and the exchange rate should remain flexible and act as a shock absorber following fundamental shocks. However, in the context of Philippines’ relatively shallow FX market, and under a scenario with sharp and volatile exchange rate depreciation where shocks relate to risk-off or disorderly financial conditions, the use of FXI may alleviate inflation and reduce some of the pressure on monetary policy – particularly if exchange rate pass-through to inflation is stronger than expected. A monetary policy response combined with fiscal stimulus would also limit deterioration in the output gap, but at the cost of higher inflation and higher interest rates, crowding out private domestic demand. The justification for additional fiscal support is stronger under scenarios where growth deteriorates significantly.

20. A degree of caution is needed in using the IPF framework and its tools, given the complexity of real-time decision-making. Deployment of IPF policy tools should be guided by a clear framework and an assessment of costs and benefits. The macroeconomic and financial stabilization benefits of IPF policies need to be balanced against potential costs in terms of market development and other possible unintended consequences, such as creating moral hazard risks and encouraging speculation. As noted above, FXI should not be used to support a misaligned exchange rate – as occurred during the Asian Financial Crisis – or as a substitute for warranted monetary and fiscal policy adjustment. Explaining the use of multiple policy instruments to market participants and the public may give rise to communication challenges. Model results should be interpreted with the recognition that the models may not reflect all tradeoffs and sources of uncertainty (e.g., regarding the true nature of economic shocks). In addition, the model will not fully reflect all practical challenges, such as may arise with regard to FXI sterilization.

21. There are a number of avenues for further work. Analytical work on the IPF will continue to incorporate fiscal considerations, explore multilateral implications of IPF policies (such as the policy responses of trading partners, availability of global financial backstops), and extend analysis of intertemporal tradeoffs.15 A government debt module and further inclusion of macroprudential policies in the models would greatly facilitate the analysis. The costs of FXI and feasibility of sterilization (particularly under disorderly market conditions and taking account of institutional arrangements) should be explicitly modeled in the IPF to fully reflect policy tradeoffs, and empirical analysis of the exchange rate pass-through and FXI effectiveness is critical to support the calibration of model parameters—as model results rely heavily on the presence of both channels and each is subject to change over time. Further work is also needed to better understand financial and trade frictions, for example, by quantifying the factors that mitigate the effects of DCP.

Table 2.

Philippines: Specification of Shocks

article image
Note: The behavior of the foreign economy is the same under both scenarios.

References

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1

Prepared by Kaili Chen, Leni Hunter, Cheng Hoon Lim, Jesper Linde, and Hou Wang. Elif Arbatli-Saxegaard and Sarwat Jahan also contributed to this paper. We would like to thank the Philippine authorities for their constructive comments.

3

The Philippines does not have a history of using CFMs.

4

This paragraph draws from IMF 2020, Basu et al 2020, Adrian et al 2021.

5

Policies to deepen the FX market would contribute to macroeconomic stability, as noted in the Staff Report paragraph 13.

7

IMF 2020, “Towards an Integrated Policy Framework”, page 22.

8

IMF-World Bank 2022, “Financial Sector Assessment Program Technical Note: Risk Assessment of Banks, Non-Financial Corporates, and Macro-Financial Linkages”, paragraph 7.

10

Using the dataset from Boz et al, 2020.

11

IMF 2012. Integrated Surveillance Decision notes that “A member should intervene in the exchange market if necessary to counter DMC, which may be characterized inter alia by disruptive short-term movements in the exchange rate of its currency.”

12

See for example Eckhold, K and C. Hunt, 2004.

13

Nominal GDP in the scenarios does not exceed nominal GDP in the baseline projection.

14

A survey of the exchange rate pass-through literature can be found in Ha et al 2019, Chapter 5.

15

IMF 2020, page 3.

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Cover IMF Staff Country Reports
Philippines: Selected Issues
Author:
International Monetary Fund. Asia and Pacific Dept
Volume/Issue:
Volume 2022: Issue 370
Publisher:
International Monetary Fund
ISBN:
9798400227561
ISSN:
1934-7685
Pages:
55
DOI:
https://doi.org/10.5089/9798400227561.002

Bank Assets and Liabilities, by Location and Currency

(In percent of total, as at 2022Q1)

Foreign Exchange Turnover by Currency, 2019

(In percent of total turnover)

Bid-Ask Spread, 2016–2020

(Calculated as Ask-Bid)

Exchange Rate and Volatility

(US$/Philippine peso)

UIP Premium

In log differences

Philippines: Estimated FXI

(In percent of 3-year moving average GDP, by calendar year)
Figure 1.

Downside Risk and Policy Scenarios
Figure 1.

Downside Risk and Policy Scenarios

National Government Debt

(In percent of GDP)