industry ’ s investment management activities as new clients with lower amounts of investible funds can now be tapped. financial inclusion was a major consideration in crafting this policy amendment. we want to make investing more accessible, while providing retail investors with a greater degree of protection. we are confident that these investors will benefit from the expertise of trust entities and that trust entities would continue to exercise prudence in the way they offer their services. economic update to provide a big picture on what lies ahead, let me proceed with an update on the economy and the banking system. 1 / 4 bis central bankers'speeches the economic, social and health effects of covid - 19 are unprecedented. they disrupted economic activity globally. the philippines was not spared : its economy contracted by 9. 5 percent in 2020, its first fall since the 1998 asian financial crisis. but one can argue that the contraction could have been worse had the philippine economy not entered the crisis in a strong position. the uninterrupted economic growth for over two decades prior to the covid - 19 pandemic, the timely structural reforms, the generally manageable inflation, and the hefty gross international reserves – all these have helped cushion the adverse effects of the health cum economic crisis on the domestic economy. our key economic indicators remain encouraging. inflation inflation is manageable and inflation expectation remains anchored. while inflation rates have risen in recent months, they were driven mainly by faster price increases of key food items and higher domestic oil prices. but the upticks in inflation are consistent with bsp ’ s assessment that inflation will remain elevated in the coming months before decelerating in the fourth quarter of the year. inflation is projected to return within the government ’ s target range of 3. 0 percent ± 1. 0 percentage point over the policy horizon. monetary policy will continue to support the various interventions of the national government to alleviate the impact of supply - side factors on consumer prices. balance of payments ( bop ) the country ’ s external position has caught up well despite the weak global demand in 2020 amid the synchronized recession of our major trade and investment partners. for full - year 2020, the overall balance of payments ( bop ) position was at an all - time high of us $ 16. 02 billion. for 2021, we project the balance of payments to be us $ 6. 2 billion or 1. 6 percent of gdp. gross international reserves ( gir ) meanwhile, the country ’ s gross international reserves ( gir ) level remains

same way. but each needs to be able to respond as necessary. otherwise, we risk widening asymmetries and exiting this crisis with greater economic divergence. this underscores why a common european fiscal response is so desirable. first, it will help bridge the gap for member states and counter that risk of divergence. given the fiscal needs already on the horizon, it needs to be swift, sizeable and symmetrical. second, it will help guide us towards the europe we want to build after the crisis. we have been given a chance to take a leap forward : to reimagine our social contract, reconsider europe ’ s strategic autonomy, and recognise the risks of not taking the environment seriously. these are all areas where acting together is in our common interest. let me give just one example : we have now experienced the consequences of a systemic ecological crisis, and we are also likely to face a period of weak private investment as firms repair their balance sheets. public investment will have to fill the gap. it makes sense to use this opening to accelerate the transition to a green economy and hit our climate targets. the recovery presents a further opportunity, too : to engage citizens in the process of defining our common interest and the areas where europe should be stronger. in sum : this is our generation ’ s “ schuman moment ”. we have been passed the baton of european integration. we are seeing our de facto solidarity all around us. and we are being asked to act, as those before us did, by strengthening europe in response. i am confident that we will recognise our historical responsibility and rise to the challenge. 2 / 2 bis central bankers'speeches