the government ’ s target range of 3. 0 percent ± 1. 0 percentage point for the year. looking ahead, inflation is projected to average 2. 9 % for both 2020 and 2021. the country ’ s balance of payment ( bop ) position recently made a turnaround from a deficit in 2018 to a surplus of us $ 7. 84 billion in 2019. the surplus in the bop may be attributed partly to higher net inflows of foreign direct investments and foreign portfolio investments, bolstered by favorable investor sentiment on the country ’ s solid macroeconomic fundamentals. the peso has been broadly stable, appreciating by about 4 % in 2019. 1 / 4 bis central bankers'speeches the end 2019 level of the gross international reserves at $ 87. 8 billion is the highest ever. more importantly, our growth continues to be inclusive. poverty incidence among the population declined to 16. 6 % in 2018 from 23. 3 % in 2015, exhibiting a 2. 2 % decrease in poverty incidence annually. this means that nearly six million filipinos were lifted out of poverty during that period. as of october 2019, unemployment and underemployment rates in the country are both at a historic low of 4. 5 percent and 13. 0 percent, respectively. indeed, 2019 was a very good year for our country. the bsp ’ s core mandates on our part, we at the bsp will continue to effectively implement our mandates and policy priorities to support the country ’ s growth goals. we will remain firmly committed to maintaining price stability and financial stability, and ensuring an efficient payments and settlements system. with the passage of republic act no. 11211, which amended the ‘ new central bank act ’ or the bsp charter, we will continue to enhance our policy responsiveness since the law strengthened bsp ’ s pursuit of its mandates by expanding its policy toolkit. our policy and reform agenda also include further strategic, complementary and reinforcing efforts in developing deeper money, debt, and fx markets. these will help build the country ’ s resilience against external shocks by reducing its reliance on external funding. at the same time, we are pursuing initiatives to deepen the local debt market and the issuance of enhanced guidelines on valuation of peso - denominated government securities as well as enhanced rules on bond issuances. these initiatives will go a long way in funding infrastructure projects under the national government ’ s build, build, build program and other big

back here as a full time ugc visiting professor in the department of business management, on deputation from the government of andhra pradesh, where i was a secretary to the government. in fact, prof. raghuram had then commented that my spirit had been hovering around here and that i had never left the university. this stint provided me a break to sit back, contemplate and review my understanding of the indian economy. it is this campus, which actually gave me an inspiration to revisit the relative roles of the state and market in india. this permeated not only my subsequent academic work in the administrative staff college of india as well as the london school of economics, but also my participation in the exciting adventure of economic reforms, particularly the external sector reforms since 1991. in the 15 years of reforms, we have moved away from crisis management in the external sector to a confident conduct of public policy. it is, therefore, useful to review our experience in this regard particularly since commerce is now a lot more globalised than ever before and is likely to become even more internationalised in future. i intend presenting before you the dynamics of balance of payment in india since independence and will conclude with a few remarks on the way forward. normally, i do not take recourse to detailed tables, charts, etc., but in this case, i will be using several tables. i am doing it as a tribute to prof. ramanadham who always insisted that there should not be a single superfluous word and every sentence should emanate from solid data presented with specific objectives, scope, limits and methodology. in a way, therefore, my address today is dedicated to prof. ramanadham. at the time of independence, higher imports and capital outflows, led by partition, resulted in significant deficit in the balance of payments necessitating running down of the accumulated sterling balances. as the country embarked upon the planned development in the fifties, rapid industrialisation of the country through development of basic and heavy industries guided the industrial and trade policies during the first ( 1951 - 56 ) and the second ( 1956 - 61 ) five - year plans.'import substitution'was recognised as the appropriate strategy for rapid industrialisation. export pessimism permeated the policy stance throughout the early decades of our planning. this thinking was based on the four premises, which were considered appropriate at that time. first, it was believed that only after industrialisation had proceeded some