that compared with the average performance from 2007 – 2014 and 2015, the philippine economy remains strong and resilient. we have seen the following : • higher growth ; • lower inflation ; • lower - than - target fiscal deficit ; • ample liquidity and credit ( 12. 4 % m3 growth and 17. 6 % credit growth ) ; • good loan quality and capital base of banks ; and • robust external payments position characterized by bis central bankers ’ speeches • current account surplus ; • comfortable gir ; and • manageable external debt profile and debt burden we will be discussing in some detail the factors that influenced the outturn for these macroeconomic variables in the next few slides. let me clarify that the transformation of the philippine economy is a product of a series of policy and structural reforms in the last two decades, disciplined macroeconomic management, and improvements in governance. the selected list of critical reforms helped us in : • expanding the role of market forces in key sectors of the economy ; • encouraging investments ; • ensuring fiscal sustainability ; • strengthening the banking sector ; • promoting innovation and competition ; • encouraging stronger private sector participation ; and • finally, inspiring business activity an important consequence of these structural reforms is an improvement in the economy ’ s productive capacity. potential output growth has been steadily rising alongside improvement in the share of total factor productivity ( tfp ) growth. this is consistent with a declining incremental capital - output ratio ( icor ) as well as the observed structural shift in employment and production structures that require higher levels of skills and knowledge. it is no small measure that the country ’ s macroeconomic progress has been achieved despite a very challenging global economic landscape. some of the recent adverse external developments that triggered episodes of financial market anxieties and volatilities in capital flows, exchange rate, and stock market include the following : • first is the on - going rebalancing in the chinese economy from export - led to services and domestic consumption - driven. while this could result in slower economic growth for china, such is believed to be more sustainable. as a key trading partner, a slower growing china could, however, affect our exports. • second is the uncertainty in the timing of policy rate normalization in the us. the fed reserve first raised its target fed funds rate in december last year from 0 – 0. 25 % to 0. 25 – 0. 50 % for the first time since the global financial crisis. markets have been speculating when the fed ’ s

##s and formalizes our recognition of ppmi as the industry - led self - governing payment system management body for retail payment systems in the country. the moa also expresses our commitment to provide continuing guidance so that the industry ’ s activities remain aligned and harmonized with the nrps framework. we at the bsp thank the chairman tito and ppmi for this declaration of support and dedication. we note with gratitude, your acknowledgment of the bsp ’ s crucial role as primary overseer of the nation ’ s payment systems. as our reliable and invaluable ally, we have no doubt that ppmi will support the proper implementation of the nrps framework ;... monitor compliance with its principles ;... conformance to agreements of our automated clearing houses ( achs )... and will be powerfully instrumental in strategically driving electronic payments through these achs ( achs that have been, and are yet to be launched ). we look forward to how ppmi will seize opportunities presented by technological innovations to 1 / 2 bis central bankers'speeches improve operational efficiency... we anticipate that it will engage service providers with robust systems and infrastructures... we are confident it will lead and assist as novel products and services that cater to the evolving needs of clients here and abroad are developed... we anticipate that ppmi will formulate strategies infused with system - wide, and industry - wide perspectives rather than limited and restricting institution - centric approaches. what exciting prospects for us all! more so, what empowering possibilities for so many filipinos! i believe we are mutually committed to this endeavor because we realize it shall have a great effect on many of our countrymen. we know that widespread implementation of interoperable payments will boost the ordinary filipino ’ s confidence to make economic decisions. we hope that capabilities – even of the now unserved and underserved – to execute financial transactions will be increased! today, this day of commitment, is indeed another nrps milestone worth celebrating. i close with the exuberant declaration that we in the bsp, affirm and celebrate our partnership with ppmi. together, we are allies and catalysts for revolutionary reforms in the payment space and in pursuing nrps goals. 2 / 2 bis central bankers'speeches