and improved capitalization. we should also see a stronger banking system resulting from more mergers and acquisitions. this should make banks better financial intermediaries and risks managers. ladies and gentlemen. improved macroeconomic conditions, accumulating banking reforms, and robust improvements in banks ’ profitability, set the stage for an even stronger performance of the philippine banking system in 2007. finally, i wish to thank all the bank associations and all our partners in the retail and the business sector, including our media friends, for their support in making our joint program “ tulong barya para sa eskwela ” a resounding success! clearly, the combined donations / savings of around p12. 5 million which we generated sends a clear signal that coins are indeed valuable ; that “ ang barya, mahalaga. ” this should convince our schoolchildren to start saving up with their coins. let us therefore give everyone who participated in “ barya para sa eskwela ” a well - deserved round of applause. salamat po sa inyo. we look forward to your continuing support for the nationwide implementation of our economic and financial literacy program in cooperation with the department of education which should transform each child into regular savers. concluding remarks friends. 2006 was a good year for the economy and the banking sector. we are therefore primed for an even better and stronger performance in 2007. while mindful of the challenges ahead, we at the bangko sentral ng pilipinas are determined to move forward in partnership with the banking community. and so, ladies and gentlemen, may i offer a toast to a strong and successful partnership between the bangko sentral ng pilipinas and the banking sector. may we become a truly potent enabling force in moving the country forward and providing a better life for all filipinos. cheers!!! thank you everyone and enjoy the rest of the evening.

action framework which provides a time bound setting to deal with problem banks. • adopted measures to improve access of smes to financing through lower reserve requirements and relaxed - but still prudent - regulations on bank branching, risk weights, single borrower ’ s limit, connected lending and documentation. indeed, the continuing partnership between the bsp and the banking sector has produced very positive results in 2006. economic and monetary policy outlook moving forward, let me share with you our views on the likely economic prospects for 2007. with resilient personal consumption, strong exports performance and robust services and industry output, gdp growth is expected to rise to 5. 7 - 6. 5 percent for 2007. if our fiscal position continues to improve, we can look forward to stronger, more sustained long - term growth. inflation is seen to continue to slow down in 2007, with the government target of 4 - 5 percent likely to be achieved, in the absence of new shocks. nevertheless, there are certain risks to inflation that need to be carefully monitored and assessed, including oil prices, possible impact of el nino on agricultural output, wage adjustments, and possible liquidity expansion. the bsp will continue to keep a vigilant eye on these risks so that it could move pre - emptively against threats to price stability. on the external front, dollar inflows from ofw remittances and foreign investments are expected to remain strong. this should continue to boost our external payments position and enable us to further build up our international reserves. these conditions, in turn, underpin our expectations of a strong peso in 2007. in fact, we are now our reviewing foreign exchange regulations, with further liberalization as our goal. going forward, we will continue to support various legislative initiatives to foster the development of our financial markets, including the creation of a centralized credit information bureau system to improve the quality of financial information available to investors, enhance private sector access to credit, and minimize exposure to risks of financial intermediaries. we are hopeful that the bill will be approved by the bicameral committee and signed into law by the president as soon as possible. the bsp will also continue to support additional legislative initiatives to hasten the development of the philippine capital market, including the amendments to the bsp charter, corporate recovery act, revised company investment act, and the personal equity retirement act. in the banking sector, we expect further expansion of bank resources, improvement in banks asset quality through npl disposal,