eu parliament, and the ecb will perform this role. the single resolution mechanism has received broad agreement emerging asia includes china, india, and the asean - 5 countries ( indonesia, malaysia, the philippines, thailand, and viet nam ). bis central bankers ’ speeches at the finance and eu leaders level, but this is still for ratification in the eu parliament in may. market volatility may heighten as markets carefully watch how the issues will be resolved. in the face of these risks, the bsp has a menu of options that could be deployed : we have standing facilities to ensure adequate domestic liquidity for banks should funding sources dry up. we would maintain a strategic presence in the fx market, while keeping the value of the exchange rate essentially market - determined. we could implement targeted macroprudential measures. in addition : 1. timely and clear communication with market players would quell anxieties. 2. the careful and regular surveillance of risks would allow for prompt and appropriate responses. 3. in the event of liquidity problems, there are regional financial arrangements that the philippines can use. in light of all these, the outlook on philippine growth and inflation remains favorable. the economy is expected to grow between 6. 5 to 7. 5 percent in 2014, despite the chain of untoward incidents. recovery and rehabilitation efforts are expected to bolster growth. for the medium - term, growth would be supported by stronger performance from the construction, manufacturing, business process outsourcing and private services. the country ’ s attainment of investment grade status may attract foreign direct investments that would in turn generate jobs. inflation is expected to remain within the target range over the policy horizon. in 2014, inflation is seen to be slightly higher than the mid - point of the target range of 3 – 5 percent, due mainly to higher food prices and possible increases in utility rates but comfortably within the target range. moving forward, the bsp will remain committed to staying the course toward sustained growth, while firmly adhering to its mandate of safeguarding price stability and ensuring the financial system remains resilient. on monetary policy, we will ensure that liquidity remains adequate to support economic growth with manageable inflation. on financial sector policy, the bsp commits to maintain the stability of the financial system by continuing to craft banking regulations that are responsive, consistent with best practice and in line with the international market reform agenda. on the external front, the bsp remains supportive of policies that will help cushion the

structural reforms. our banks have limited exposure to structured credit and related derivative products which were the main cause of the large losses of crisis - affected international institutions. liquidity in our banking system remains adequate and bank lending operations continue to expand at a healthy pace. furthermore, our banks are capitalized above the global standards and bsp regulatory requirement. moving forward the next question is how do we move forward? first, given the buffers i have mentioned earlier, we should face the global headwinds with an underlying belief in the resilience of the philippine economy. the message is that 2008 has been a tough year and 2009 will most likely be tougher – but our economy is in a better shape to weather this global storm. this is not our first crisis, nor will it be the last. this time around, we are entering the crisis from a position of relative economic strength. the key is to manage the factors that are within our control, to maintain a positive mindset, and to capitalize on our time - tested resiliency and ability to innovate amidst challenging times. this brings me to my second point. we should press on with the strategy that has so far kept us in good stead – macroeconomic prudence. sound macroeconomic fundamentals are the first line of defense during these trying times. our experience in the past years has demonstrated that sound monetary, fiscal and structural policies have a salutary effect on the economy. the key challenge is to continue to have a consistent and coordinated monetary, financial and fiscal policy response to the ongoing crisis. the commitment to tackle policy challenges boldly through purposeful reforms to strengthen institutional underpinnings, improve productivity and boost international competitiveness should ensure a steady anchor to the country ’ s economic prospects amidst the inevitable global storms. on the part of the bsp, we will continue to craft monetary and financial policies that will support broad - based economic growth while keeping prices stable. in other words, the bsp ’ s monetary policy will continue to focus on achieving price stability while allowing room for the economy to grow. the bsp will also continue to stabilize financial conditions through reforms that will foster healthy financial balance sheets. we will guard against systemic failures through liquidity provision when necessary, while keeping inflation under control. this will ensure the effective functioning of transmission channels for monetary policy. in turn, this should reinforce confidence in the financial markets and in the economy as a whole. the ultimate goal is to have a more balanced and