’ s effective conduct of monetary policy. we recognize that monetary policy must evolve in the context of a more sophisticated and complex financial system. thus, all our current reform actions – reducing reserve requirements, liberalization of fx markets, deepening the debt market, as well as our macro - and micro - prudential measures do not diverge from our goals of price stability. these are all strategically pursued to systematically build the country ’ s resilience amidst an evolving landscape. in this regard, we are committed to more market - based monetary operations. our move to reduce reserve requirements ratio ( rrr ) supports the shift towards a more market - based implementation of monetary policy and more efficient financial intermediation. we started with 20 percent rrr, one of the highest in the region, if not the world. by default, the economy is 4 / 5 bis central bankers'speeches shouldering a de facto tax burden. by slowly lowering rrr, we are reducing friction costs. this should help curb shadow banking given the rise of strong alternatives offered by fintech and financial innovations. the bsp is deliberate in the timing of the reduction of reserve requirements. it will be gradual, moderate, and phased over the medium term with the objective of eventually bringing rrr to single - digit levels in line with regional peers. the bsp waited for alternative mechanisms to be developed before embarking on the reduction. prior to the rrr cuts ( in recent months ), we have seen a firm anchoring of market rates to the irc. thus, there is now room for bsp to reduce its operational reliance on reserve requirements for liquidity absorption and management. the bsp has enough market - based tools to make this operational adjustment policy neutral. the rrr cuts are not without compensating action. excess liquidity is reabsorbed through our open market operations and significant fx operations. there is no evidence to indicate that the cut is expansionary. on the contrary, market rates have trended upwards, validating tighter market conditions. a call for cooperation ladies and gentlemen, the bsp has been and will always be a vigilant captain of the financial system to deliver a high quality of life for all filipinos. we value the partnership with the icd which similarly aspires for sustainable and inclusive development through broad - based economic growth led by corporations adhering to good corporate governance principles. together we must leverage on the strength of the economy. this is an opportune

i am certain this year ’ s awardee displays this required dynamism. bsp ’ s prudential reform genda as cfos and industries thrive in the changing business environment, the bsp faces the same challenges. hence, we have implemented strategic policy reforms to protect the financial system and provide a conducive and more agile macroeconomic environment. much headway to ensure financial stability has been made with the adoption of basel iii reforms, particularly in the areas of capital, leverage, liquidity and regulation of systemically important banks. since the start of the year, the bsp continues to build on this theme. for example, we implemented a major upgrade of corporate governance and risk management standards in our supervised institutions in line with the thrust of global best practice. we adopted reforms to strengthen banks ’ capabilities to nimbly manage risks related to information technology. recently, the monetary board approved the cyber security risk management framework under circular no. 982 to further guard against cyber security threats and attacks. even as we bolster our cyber - security stance, the bsp is determinedly pursuing the digitization of the financial system. last november 8, 2017, the philippine electronic fund transfer ( eft ) system and operations network, or pesonet, was launched. this is the first automated clearing house ( ach ) under the national retail payment system ( nrps ). we envision pesonet to be an electronic alternative to the paper - based check system, significantly cutting down costs and allowing better liquidity management. it features same day crediting of the full 2 / 4 bis central bankers'speeches amount being transferred. businesses and individuals will be able to conveniently move funds from their own account to any other account in the system. for me, this initiative which depends heavily on the collaboration of our banks and other non - bank financial institutions to achieve full payments inter - operability, is financial agility in action. forthcoming reforms for greater agility the bsp is also enhancing liquidity risk management guidelines under a four - phased program. the first phase covers enhancing the guidelines on liquidity risk management, including intraday liquidity. this was recently approved by the monetary board through the issuance of circular no. 981. also in the pipeline are the amendments to the liquidity coverage ratio ( lcr ) standard and the issuance of the complementary minimum liquidity ratio ( mlr ), which is a simplified version of the lcr requirement for less complex financial