of domestic goods and services. meanwhile, domestic output expansion remains robust on account of the expansion in capital formation and household consumption, as well as strong performance of the services and industry sectors. recent high - frequency sector indicators of economic activity also continue to point to firm growth prospects in the near term. the growth momentum was also supported by a strong and stable philippine banking system. during the review quarter, banks ’ balance sheets exhibited sustained growth in assets and deposits. furthermore, asset quality indicators remained healthy while capital adequacy ratios continued to be above international standards. domestic liquidity also remained ample, driven by robust credit growth. however, amid this resilience, the philippine economy is being tested by external headwinds emanating from the recent and planned interest rate hikes by the us fed and brewing trade tensions among key economies. these are exerting depreciation pressures on the peso. the country ’ s current account deficit and higher inflation also dampened investor sentiment during the quarter. 1 / 2 bis central bankers'speeches these developments formed the backdrop for the bsp ’ s policy decisions during the second quarter of 2018. in brief, the bsp raised its policy rate by 25 basis points each in may and june, bringing the overnight reverse repurchase ( rrp ) rate to 3. 50 percent from 3. 0 percent a quarter ago. the interest rates on the overnight lending and deposit facilities were likewise raised accordingly. in deciding to hike the policy rate during the quarter, the monetary board noted that the increase in inflation expectations and in the risks of possible second - round effects argued for timely and decisive monetary policy actions from the bsp. although inflation expectations remain within the target range for 2019, elevated expectations for 2018 highlighted the risk posed by sustained price pressures on future wage and price outcomes. equally important, upside risks continued to dominate the inflation outlook, as various measures of core inflation continued to rise. meanwhile, the bsp kept a close eye on developments in the foreign exchange market and noted their potential impact on inflation in the coming months. the bsp believes that its monetary policy actions during the quarter signal its strong commitment to safeguard macroeconomic stability in an environment of rising commodity prices and ongoing normalization of monetary policy in advanced economies. the bsp likewise reiterates its support for carefully coordinated efforts with other government agencies in implementing non - monetary measures to help mitigate the impact of supply - side factors on inflation and social welfare. accordingly, the bsp will sustain

benjamin e diokno : old partnerships and renewed beginnings message by mr benjamin e diokno, governor of bangko sentral ng pilipinas ( bsp, the central bank of the philippines ), at the trust officers association of the philippines general membership meeting, manila, 25 march 2021. * * * to the directors, officers, and members of the trust officers association of the philippines ( toap ), guests, ladies and gentlemen, good evening! it is a pleasure to address the toap once again, this time, at your general membership meeting. it was in november 2020 when i joined your summit. i recall that i challenged your organization to be adaptable, to take advantage of opportunities, so your institution will reach its goals. with the accomplishments of the association, i commend the incumbent officers of toap under the leadership of atty. bobbie conception for ably steering the industry in 2020. 2020 was an extremely difficult year. but don ’ t despair. we are on the way to recovery. we can look to 2021 with guarded optimism. performance of the trust industry nevertheless, the performance of the trust industry in 2020 was impressive. while the level of assets under management ( aum ) for trust and investment management activities did not show significant growth, it is encouraging to note that the aum of unit investment trust funds ( uitfs ) rose by a hefty 22 percent year - on - year by the end of the third quarter of 2020. this development must have been made possible by the online accessibility of uitfs as the number of uitf participants also surged by around 32 percent year - on - year. uitf clients seem to prefer funds that are more liquid and whose products they are more familiar with. as we move forward, we hope that the uitf participants can progress, particularly with respect to the choice of underlying investments, and that in due time uitfs can be an effective vehicle for retail investors to actively participate in the philippine capital markets. apart from uitfs, the bsp expects growth of trust assets to continue this year. following the industry ’ s proposal, the bsp issued circular no. 1109 on february 4, 2021, which lowered to the minimum amount required to maintain an investment management account ( ima ) and to participate in commingled funds to p100 thousand. the circular also expanded the financial assets that a commingled fund can invest in. this is expected to fuel an increase in the