The Central Bank is not going to let inflation get out of hand (in the Philippines).

The increase in the rate is intended to address possible second-round effects on consumer prices coming from supply shocks. We have to continue to assess the situation and decide on what will be the inflation expectation that could arise from possible higher wages and transport costs.

In addition, modest improvements in aggregate demand and bank lending amid the sustained slowdown in liquidity growth imply limited demand-side pressures on prices.

Improved macroeconomic conditions, particularly on the fiscal front, as well as upbeat expectations for 2006 heightened investor confidence.

It will be important to show that the fiscal reforms are being continued. A deviation will tend to be negative and can adversely affect financial markets.

We cannot rule out a tightening of monetary policy in the short run.

The expansion in the coverage of said declaration was proposed by the Anti-Money Laundering Council in order to comply with the Financial Action Task Force's Special Recommendation IX, which requires countries to have measures in place, including a declaration system or other disclosure obligation.

The deceleration in liquidity growth may be traced mainly to lower net credits to the public sector as a result of the improved fiscal performance.

Renewed confidence will encourage more investment inflows. That is possible as long as the reform effort is sustained.

Positive sentiment has also continued to strengthen the peso exchange rate, thus providing continued stability to domestic prices of imports.