also believe that these public investments in physical infrastructure and human capital are sustainable because they are supported by prudent fiscal management. the first wave of tax reforms under the train law, in particular, should help generate additional revenues to finance the government ’ s programs. reforms to encourage tax compliance, improve revenue collections, and plug regulatory loopholes, among others, are also in the pipeline to further strengthen the country ’ s fiscal position. at the same time, the country ’ s healthy financial system has also continued to fuel the growth momentum, as domestic liquidity remains ample to satisfy the requirements of our growing economy, including the solid demand for loans across key economic sectors. amid the robust expansion in credit, financial institutions have enhanced their liquidity and risk management practices to prevent buildup of systemic risks, as reflected in their improved asset quality, firm liquidity position, and strong capitalization. the rise in investments and increase in infrastructure spending have been accompanied by stronger demand for imports. this is expected. over time, these investments will bear fruit in the form of better infrastructure and improved domestic competitiveness. this will support high and sustainable economic growth. moreover, despite posting an overall balance of payments ( bop ) deficit of us $ 863 million in 2017, the country ’ s external position continues to be manageable with the deficit at less than 1 % of gdp. rising inflows of foreign direct investments as well as sustained overseas filipino remittances and bpo receipts provide resilience against external shocks. moreover, the ongoing global economic recovery bodes well for our merchandise exports. meanwhile, the movement of the peso remains market - driven. this exchange rate flexibility will promote self - correction mechanisms and avoid dangerous build - up of unsustainable imbalances. these elements should all keep the balance of payments well under control. finally, as a sturdy external liquidity buffer, we have built up gross internal reserves of over $ 80 billion equivalent to nearly 8 - months worth of imports of goods and services. we likewise have access to market financing because of our hard - earned solid investment grade rating. we have 2 / 5 bis central bankers'speeches likewise developed secondary liquidity buffers from various regional safety net arrangements we have worked out with our neighbors. to summarize, the philippines continues to be a good bet for investing because of sound macroeconomic fundamentals. factors in its favor are its broad - based growth, within - target inflation, prudent fiscal management, sound financial

sustainable, as reflected by low and declining debt - to - gdp ratio. the philippines also enjoys improving labor dynamics, with the labor force becoming more educated. this bodes well for attracting more investments that generate higher paying jobs. this means our economy can grow at a much faster pace than decades ago – thereby unlocking more opportunities to pull more people out of poverty – without the risk of stoking up inflation. without such risk, strong economic growth can be sustained over the long haul. second, within - target inflation. after being elevated last year due to supply - side factors, inflation has reverted to within the target range of 2 to 4 percent. this is credited to a series of monetary actions by the bsp that addressed brewing secondround effects combined with and non - monetary actions by the government that addressed bottlenecks to food supply. with the bsp ’ s amended charter, we will ensure that we maximize its provisions to better fulfill our core mandate of price stability. under the new charter, the bsp is now allowed to issue its own debt instruments. being able to issue our own debt instruments allows us to better manage liquidity in the system. with my appointment to the bsp last march coming shortly after the signing into law of the bsp ’ s amended charter – a legislative reform that was decades in the making – i consider it my primary duty to ensure not just its implementation but also the maximization of its provisions for 2 / 5 bis central bankers'speeches the benefit of the economy and the filipino people. third, comfortable external payments position. based on the latest estimates, the country is expected to post a us $ 3. 7 billion surplus in its balance of payments this year. thanks to solid foreign exchange inflows in the capital and financial account, the deficit in the current account is more than adequately covered. talking about the current account deficit, this is not something out of the ordinary, especially for a growing economy like ours that is investing vigorously in its future through an aggressive public infrastructure drive. with rising public and private investments, importation of rawer materials, intermediate goods, and capital equipment has also been growing. this explains the current account deficit, which nevertheless, is financeable, given robust foreign exchange inflows in the financial and capital account. driving the country ’ s bop surplus are reliable inflows of overseas filipinos ’ remittances, business process outsourcing ( bpo ) revenues, and tourism receipts. together, the