Central Bank of the Philippines and BIS convene macroeconomic modelling workshop as Governor Remolona urges review of supply shock frameworks

The Central Bank of the Philippines, in partnership with the Bank for International Settlements, co-hosted a workshop on macroeconomic modelling in Panglao, Bohol on 16 to 17 January 2025, bringing together central bankers from 14 countries and other experts to discuss emerging approaches and practical challenges in macroeconomic modelling. The agenda covered modelling and forecasting frameworks, incorporating non-linear dynamics, approaches to evaluating and communicating model forecasts, lessons from the post-COVID-19 inflation surge, and the use of big data and artificial intelligence. In opening remarks, Governor Eli M. Remolona, Jr. called for a broad, strategic review of the modelling framework in light of recent food and oil supply shocks and evolving exchange rate pass-through to inflation, and argued that model-based analysis should be supplemented with market surveillance through engagement with banks and market participants. BIS Deputy Head of the Monetary and Economic Department Frank Smets highlighted the importance of accounting for non-linearities to explain inflation surges and structural change, referenced advances in machine learning for estimating more complex models, and stressed testing for model robustness; the workshop drew 30 participants from 14 central banks, the BIS and the International Monetary Fund.