felipe m medalla : navigating the road ahead - looking back to look forward speech by mr felipe m medalla, governor of bangko sentral ng pilipinas ( bsp, the central bank of the philippines ), at the bangko sentral ng pilipinas turnover ceremony, manila, 3 july 2023. * * * magandang, magandang umaga sa inyong lahat! gov. eli [ remolona ], members of the monetary board ( mb ), and fellow bspers, it is the 30th anniversary of our beloved bangko sentral ng pilipinas ( bsp ). let us celebrate! ladies and gentlemen of the bsp, we, together, survived and, not only that, we thrived in a year full of extreme challenges, which [ deputy governor ] chuchi [ fonacier ] had already described. as covid - 19 lingered and work - from - home arrangements continued, we managed to ensure the uninterrupted supply of money across our country, kept the banking system strong and stable, made our financial system even more inclusive, battled record - high inflation - by the way, at the rate it is going, 18 straight months of above - target inflation, three months longer than the previous record - and helped provide stability to our economy. we did these together! congratulations, bspers! now, for the specifics. do not forget, i used to be a professor so this will take an hour. i promise, gov. eli, you will [ have to ] wait just a little bit more. not an hour - maybe half an hour [ or ] shorter than that. preserving price stability and building on solid foundations on price stability, it was a year like no other. we encountered unprecedented challenges over which the bsp has little control. of course, we call them supply shocks. supply chain disruptions, here and overseas, triggered price hikes in basic commodities, transport, and other services. we had to act decisively. and we did. during my term as governor, the bsp raised the policy rates by a total of 350 basis points ( bps ), on top of the 75 bps already taken before i became governor. by the way, i have to thank my predecessor, gov. ben [ diokno ]. the last thing i thought a month before i became governor was that am i really governor? of course, a series of events

pleased to share that fitch acknowledged the credibility of the bsp's inflationtargeting framework and flexible exchange rate regime. keeping banks healthy and strong now, to our second pillar. on maintaining price stability, i am pleased to report that on account of our continuing reforms, our banks are strong, stable, well - capitalized, highly liquid, and well - governed. thus, our banks have remained a source of strength and support to our local economy and [ facilitated ] a strong recovery right after the restrictions on mobility were lifted. while financial stability is a responsibility that we share with other financial regulators, like the securities and exchange commission, the insurance commission, the philippine deposit insurance corporation, and, of course, the department of finance, bank regulation remains central in a bank - centric economy [ like the philippines ] where the balance sheet of the banking system was 23. 1 trillion, about the same as our country's [ nominal ] gdp [ gross domestic product as of q1 2023 ]. today, the bsp has the flexibility and policy space to preserve its two pillars of price and financial stability without needing to sacrifice one for the other. 2 / 5 bis - central bankers'speeches in addition, we take an active role in promoting sustainable finance through our 11 - point sustainable central banking strategy. in leading by example, we have also made it a point to invest some of our forex reserves in green assets. making the payments system more digital and inclusive now, to our third pillar. we continue to make good progress on our third pillar of providing a safe, secure, and efficient payments and settlements system. among others, 42. 1 percent of retail payments in 2022 were already digital. this puts us on track to achieve our target of digitalizing half of domestic retail payments by the end of this year. the volume of digital payments continues to grow significantly. for instance, instapay transaction volumes have already exceeded atm [ automated teller machine ] transactions. soon, pesonet transactions will overtake checks in our paperless shift. now, on financial inclusion. we actively rolled out the paleng - qr ph plus program, which promotes the use of digital transactions and qr [ quick response ] payments among market vendors, public transportation drivers, and microentrepreneurs. on top of that, we now have been given the power to strengthen consumer protection alongside widespread digitalization. we have produced circulars in line with the implementation of the financial products and