##uncements of us president - elect trump is yet another example. all these comprise what is now being termed by some as a “ retreat from multilateralism ”. while we are seeing that this global trend of growing through domestic aggregate demand can break the downward economic spiral for a number of economies, the question is whether such inward perspective is sustainable for global economic growth. for the philippines, strong domestic aggregate demand, particularly private consumption, has long shielded us from external shocks. even during the asian financial crisis, we were not as affected because we were not as open as others in the region. however, there is a need to explore ways of broadening the domestic economic base. infrastructure is key to this. human capital is another important element. we need to be able to connect our domestic markets through networks of roads, airports, seaports, etc. but we also need a smart population to find solutions to natural disasters and to find ways of improving efficiency, among others. fortunately, for the philipines we have both monetary and fiscal space to allow the government to ramp up spending on infrastructure and put in place projects to raise human capacity. another factor to reflect upon is the integration of asean, which is certainly underway. the bsp has already signed the heads of agreement with bank negara malaysia. and i am pleased to report that we are about to initiate formal discussions with the bank of thailand and with the ojk of indonesia under the same abif guidelines. as we consider supply chains and regional integration, we must be mindful of the trend of “ disruptive innovation ”. in other words, finding new ways of doing old things. technological improvements are helping define new ways for you to “ enter ” into and be integrated in the supply chain. while there are many of you who will continue to be on the big loan origination side, a number of you can find value in generating economic activity through retail banking. still a number of you will be able to find a niche in providing alternative digital solutions. in doing so, there is a need to be mindful that using financial technology could lead to new and unanticipated financial, business, consumer protection risks as well as cybersecurity risks. this is why, even as we encourage technology solutions, we also admonish banks to do so with caution and without sacrificing financial stability and the protection of your ultimate customer, the consumer. 2 / 3 bis central bankers'speeches is there a role for monetary policy

expensive to raise funds because once trust is broken, fewer investors are willing to participate, and those who remain demand a premium for the increased risk of being misled. a lack of reliable information also leads investors to make poor investment decisions, so capital is misallocated. in short, financial markets operate less efficiently, with fewer benefits for everyone. avoiding a widespread loss of trust requires a systematic and coordinated effort to fix the flaws and weaknesses that can undermine investor confidence. it is important that there be a set of reasonable rules — so that chief executives, boards, and their auditors truly and fairly disclose the financial position of public companies — and that the investing public can rely on the truth, fairness, and completeness of that disclosure. now, in spite of the specific flaws that the enron collapse has revealed, it has become clear that much of the public ’ s confidence in the efficient operation of financial markets remains intact. but we must continue to be vigilant. restoring confidence financial statements form the foundation on which financial markets operate. i have already spoken of the way that a clear yardstick has helped the bank improve its transparency. the same idea holds true for financial statements. clear and accurate corporate reporting, together with other reliable information for investors, are essential. equally importantly, information must be presented in a straightforward manner. earnings reports should be used to disclose information, not bury it. we can ’ t pretend that hundreds of complicated pages lead to the type of disclosure that facilitates efficiency. next, confidence must be constantly earned by corporate managers and directors, auditors, analysts and investment advisors, rating agencies and regulators. reputations have been threatened by events like enron, and by the suspicion that some insiders have been feathering their nests at the expense of shareholders. obviously, it is wrong for analysts who actively own shares in a firm to use their assessments to promote that firm. but there can be more subtle conflicts of interest that don ’ t involve illegal or fraudulent activity — for example, auditors who are not truly independent of the companies they audit. risk assessment is another issue that needs more attention, particularly by companies outside the financial sector. this involves more than just listing in a financial filing all the things that could go wrong. companies need to tell investors how they are handling both the external risks that they face and the risks they have chosen to take on as part of their business strategy. after all, investors are required to sign a form that tells their broker about their risk