to carefully assess the appropriate timing of the unwinding of all these measures. doing it too late or too early may have serious repercussions on the economy. in addition, i am pleased to inform you that last september, the bsp started issuing its own securities, as allowed under our recently amended charter. this new instrument will help us better manage liquidity moving forward. let me now provide brief updates on the monetary, external and banking sectors : 1 / 2 bis central bankers'speeches on the monetary front, inflation remains manageable. we expect inflation to settle within the target range of 1. 75 – 2. 75 percent this year, and 2. 0 – 4. 0 percent in 2021 and 2022. low inflation gives us room for monetary easing when needed. on the external front, we continue to have a comfortable external payments position with gross international reserves at an all - time high of around us $ 100bn. external debt ratio / gdp remained low at 23. 7 percent at end - june 2020, even with the recent increase in external borrowing to fund additional government spending to address the pandemic. both our current account and bop remained in surplus in the first semester. we project a current account surplus equivalent to 1. 6 percent of gdp this year, up from a deficit of 0. 5 percent of gdp as of may 2020. we expect bop to post a surplus of around 2. 2 percent of gdp, up from 0. 2 percent of gdp as of may 2020. overseas filipino remittances have started to recover in recent months. we expect of remittances to expand by 4 percent next year from a contraction of 2 percent this year. year to date, of remittances have contracted by 2. 4 percent. the philippine peso has been an outperformer this year, appreciating 4. 7 % against the usd, year - to - date, to its highest level since late - 2016. the appreciation is due mainly to the country ’ s external position, itself driven by a narrowing in the trade deficit and a rebound in remittances in recent months. the philippines ’ banking system remains fundamentally sound and resilient despite the health crisis. the regulatory measures mandated by the bsp through the years have prepared banks to build enough buffers going into this crisis. banks are well capitalized with high capital adequacy ratio, well above both the bsp and bis regulatory requirements. asset quality remains

the domestic economy. in addition, the domestic economy has sufficient buffers that help weather the external headwinds : • the bsp ’ s foreign exchange ( fx ) reserves currently stands at us $ 85. 5 billion as of end - july 2016, more than enough to meet the country ’ s fx liquidity requirements for trade and short - term debt obligations. • the country ’ s current account has been in surplus for 13 consecutive years now, supported by the sustained increase in overseas filipino ( of ) remittances, as well as business process outsourcing ( bpo ) revenues and tourism receipts. current stance of monetary policy this position of relative strength has allowed us to keep our policy rates at 4 % since september 2014 until we reduced it to 3 % in june this year, following the operational adjustment when we adopted the interest rate corridor. however, even with the 100 bps adjustment in the headline rate, 3 % is still over 250 basis points higher than the fed funds target rate. that gives us significant wiggle room, in this environment where some jurisdictions have gone into negative interest rate territory. at our policy meeting last week, we again kept the policy rate steady at 3 %. while our assessment showed that inflation would be slightly below the ng target range for 2016, we expect that inflation would be within the target of 2 – 4 % in 2017 – 2018, with an upside bias for 2017. in addition, our credit growth suggests favorable monetary conditions, and aggregate demand remains firm. therefore there was no strong impetus for us to move policy levers or adjust the stance of monetary policy. summers, l. ( 2016 ). “ the age of secular stagnation. ” foreign affairs. february issue. bis central bankers ’ speeches in other words, ladies and gentlemen, we have monetary policy space and our current monetary settings are appropriate. triggers to shifts in policy stance you must have heard me say this on a number of occasions already. but you may ask, what would cause us to change the stance of policy? my answer to that would be : our next move would be data dependent. which then begs the question, what data are we looking at? data dependence sounds almost trite. some may say this is veiled “ central bank speak ”, given that nearly all central bankers today seem to say this in unison. but in truth, when we speak these words, we do so with great thought and much humility. for we do not know everything. it would