and public services act — all of which bode well for job creation. these game - changing reforms will help stimulate the economy, generate more jobs, improve basic services to filipino consumers and allow for the exchange of skills and technology with the country ’ s foreign partners. the duterte administration invested massively in infrastructure under the “ build, build, build ” program, which i originally called the golden age of infrastructure in the philippines. the goal is to make up for past neglect which earned the philippines the distinction of having one of the poorest public infrastructure in the asean region. from 2016 to 2020, infrastructure spending as percent of gdp averaged 4. 6 percent. in 2021, actual infrastructure spending reached php1. 12 trillion or 5. 8 percent of gdp. one thing is certain : the incoming administration will inherit a better state of infrastructure to help in its socioeconomic agenda. the next administration will inherit a robust pipeline of implementationready infrastructure projects. a total of 88 infrastructure flagship projects for completion in 2023 and beyond will be up to the next administration to continue. taking all these into consideration, we are optimistic that the philippine economy will do better this year. with the economy growing at 8. 3 percent in q1, we expect it to grow by 7. 0 to 9. 0 percent this year, and by 6. 0 to 7. 0 percent next year. that said, like the rest of the world, the philippines faces risks to its growth outlook. among the risks are the resurgence of the covid - 19 virus and a prolonged russia - ukraine conflict. on covid - 19, the philippines is managing risks of potentially new variants emerging through sentinel surveillance and protecting the vulnerable population through accelerated vaccination. as of last may 10, 68. 4 million out of the target 90 million filipino population have already been fully vaccinated. the impact of the russia - ukraine conflict will be mainly through higher energy and oil prices. but we expect this to be manageable. based on latest estimates of the bsp, inflation could average slightly above the 2. 0 - to 4. 0 - percent target range this year and then move back to within the target band next year. as such, the bsp supports timely implementation of targeted non - monetary measures by the government to prevent price pressures from broadening. these include direct financial transfers to vulnerable sectors ( transport workers, farmers, and fisher folks ), and efforts to boost domestic production and importation of certain food commodities.

system ; increased tax on automobiles, petroleum and tobacco products ; expanded the value added tax base ; introduced excise tax on sugar - sweetened beverage and cosmetic procedures ; and simplified estate and donor ’ s tax. at the same time, the stable banking system — which benefitted from regulatory reforms over the years — was able to extend credit to consumers and businesses. as a result, credit activity has picked up since august last year. in addition, prudent lending standards of banks helped to keep the rise in bad debts within manageable levels while ample capitalization enables them to absorb shocks. the banks ’ capital adequacy ratio ( car ) on a consolidated basis was 17. 4 percent in september 2021, much higher than the bsp ’ s requirement of 10 percent, and the bank for international settlements ’ 8 percent. on digital transformation, the bsp ’ s policy agenda include digitalization of the country ’ s payments system. as the economy gradually reopens, we seek to further promote innovative contactless payment technology and onboard more filipinos into the formal financial system. by 2023, we aim to digitalize at least 50 percent of retail payments and at least 70 percent of filipino adults should have transaction accounts. complementing this reform is the recently passed financial consumer protection act. the legislation provides regulators more power to act on, and improves the resolution mechanisms for, financial consumer complaints, including those involving cybercrimes. in line with our digital payments transformation roadmap, the bsp has also issued six digital banking licenses. on sustainability, the bsp is at the forefront of promoting sustainability principles in the financial sector. we have issued regulations requiring banks to incorporate such principles into their operations. we are also among the early investors in the bank for international settlements ’ green bond fund and the asian green bond fund. the duterte administration did not let the unprecedented crisis go to waste. it did not sit idly by and wait for the coronavirus to subside ; instead, it continued to pursue game - changing reforms which would make the philippines a preferred investment destination by investors. the government sustained the reform momentum in consonance with its pandemic response. for instance, it pursued the passage of the corporate recovery and tax incentives for enterprises or create law, which cut corporate income tax and rationalizes the fiscal incentives system. in addition, three landmark laws further open the philippines to foreign investors. these include the amended retail trade liberalization act, the foreign investments act,