Amando Tetangco Quotations

The creation of large liquid benchmarks will improve the trading turnover in the secondary market as this is expected to, among others, reduce the bid-offer spreads on bond prices. Participants will be able to get in or out of the benchmark issues more easily, making trading in Philippine bonds comparable to those in other emerging markets. This will be highly attractive to foreign investors in the market and bring additional business opportunities to the local financial community. This effort will complement earlier initiatives in capital market development, including the creation of the Fixed Income Exchange.

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

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

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.

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.

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

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.

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

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

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.

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