nestor a espenilla, jr : optimum navigation speech by mr nestor a espenilla, jr, governor of bangko sentral ng pilipinas ( bsp, the central bank of the philippines ), at the 9th general membership meeting of the financial executives institute of the philippines ( finex ), makati city, 20 september 2017. * * * when i was deputy governor of the bsp ’ s supervision and examination sector i had the honor of speaking at some of your membership meetings and the pleasure of participating in your golf tournaments and now, formally, one of you. today, i thank you for inviting me, and for the opportunity to congratulate finex ’ s new members as governor of the bangko sentral ng pilipinas …. finex president benedicta du - baladad, mbm val araneta, md jane chiong, finex directors and officers, esteemed guests, ladies and gentlemen, a pleasant afternoon to you all. in the theme, there is reference to a new bsp roadmap … as requested, i am here to talk about some of our plans, in my presentation and in our q and a. since the bsp ’ s establishment on 3 july 1993, our core mandates have remained the same. the target of making the philippine economy more globally competitive, and its financial system more robust and stable is unchanged. each and every governor was focused on reaching this destination … as new bsp governor, do i have a new roadmap? this is an interesting question and one often asked of me … when i first became governor, i emphasized the importance of building on my predecessors ’ legacies of excellence … this was summed up in the phrase, “ continuity plus plus. ” in this sense, i can ’ t say that there is a new roadmap … rather, what there is, is an on - going journey … a strategic one at that … as we pursue deeper financial sector reforms. interactive road maps do you use waze or google maps? i think these are wonderful apps … waze relies on community and user reporting … when users report on accidents, blocked roads, weather conditions, this information is collected and immediately analysed. wazers are then informed of the optimum route to get to their destinations … google map on the other hand, is created through collaboration with google earth. it depends on images from third - party satellites fed into powerful computers to provide high - resolution

images taken from above. sometimes, mid - journey, these digital maps recalculate and advise when there is a route that is several minutes faster! … i like how technologically powered roadmaps like these are interactive … dynamic, smart, sensitive and are responsive to changing conditions! i am not saying that the bsp is only just now adopting these mapping or planning frameworks. even under the governorships of my predecessors, the path of central banking has never been static … we evolve and adapt innovative ways of preserving financial stability as we deal with inter - related transactions, regionalization, globalization, the growing sophistication of interconnected markets, and developing technology. 1 / 5 bis central bankers'speeches we are here whether one uses waze, google maps or an ordinary paper roadmap, the first thing one needs to determine is the start point … the “ we are here mark ” on the map … so where are we? i am happy to report that the philippines has sustained strong macroeconomic fundamentals … we continue to be one of the fastest growing economies in asia, registering a 6. 5 percent annual growth in gross domestic product ( gdp ) in the second quarter of 2017 … while headline inflation rose to 3. 1 percent in august 2017, it is still within the government ’ s target range for 2017, and also 2018 – 19. we have established credibility in hitting our inflation target. our level of gross international reserves ( gir ) is healthy at $ 81. 72 billion as of end - august 2017, which amount can adequately cover 8. 6 months ’ worth of imports … in june, our foreign direct investments ( fdi ) have grown by 182. 7 percent to $ 674 million. the banking system is sound and stable with a double - digit growth in resources at 13. 5 percent to reach p14. 2 trillion as of end - june 2017 … growth is fuelled by sustained inflows of deposits reaching its p11. 0 trillion mark … the total loan portfolio likewise grew by 18. 0 percent to p8. 0 trillion. our financial market is deepening but domestic credit to gdp is still the second lowest among asia pacific countries at 63. 6 % … loan quality of the banking system is satisfactory as npl ratios continue to decline at 1. 9 percent … banks have taken enough buffers for expected and unexpected losses arising from their expanding lending activities. further, banks maintain ample liquidity and strong core earnings. recalculating