nestor a espenilla, jr : statistical and actual inclusion speech by mr nestor a espenilla, jr, governor of bangko sentral ng pilipinas ( bsp, the central bank of the philippines ), at the 2017 bsp - deped annual oratorical contest, manila, 27 october 2017. * * * national satistician lisa grace bersales of the philippine statistics authority, deped undersecretary victoria catibog, distinguished members of the board of judges, our sixteen contestants this afternoon, their families, friends, fellow public servants and bspers, a pleasant afternoon to you all. on behalf of the monetary board and the bsp, i welcome you — guests, ladies and gentlemen to the bangko sentral ng pilipinas. it is very invigorating to join you this afternoon at the bsp - deped annual oratorical contest where the fundamental role of statistics in attaining our collective aspirations is highlighted. there is such a young and promising crowd here today. the presence of our partners in furthering financial inclusion, the department of education and the philippine statistics authority, is also very heartening. the philippine statistics authority has played a crucial role in helping us conduct our public perception surveys. these surveys allow us to gauge public awareness of our mandates, our initiatives and advocacies so that we can better serve our citizens, address the issues they deem important and discover their needs. also the psa is one of the government agencies crucial to the development and implementation of a national id system which when launched, we believe will foster a more inclusive financial system, granting the unserved and underserved access to financial services. maraming salamat psa. aside from the holding of this annual contest, the deped and the bsp have worked together in the development, publication and use of very important teaching guides on financial literacy, which is used by different grade levels across the country. the goal is to equip school children with the knowledge and skills to manage their resources at an early age through integration of financial lessons in the elementary curriculum. we have important advocacy projects together such as the annually held guro ng pagasa, where outstanding teachers are recognised and awarded for their innovative ways in imparting financial literacy and for conducting lessons on savings and entrepreneurship, markedly changing their communities for the better. the partnership we have recognises the importance of the youth in development and the crucial role that education plays in

interest rates have been raised in the us, and the period of very low or even negative interest rates in the euro area may be coming to an end. this has various effects on the icelandic economy. it is not a given that terms of trade will continue to improve, and imported deflation will subside as well. domestic inflation could therefore rise above target more quickly unless domestic pressures ease commensurably. on the other hand, the interest rate differential with abroad will narrow, other things being equal, and this will make the conduct of monetary policy less difficult and reduce the central bank ’ s accounting loss due to the foreign exchange reserves, as i will discuss more fully in a moment. monetary policy conduct is generally much more complicated during times of significant change than under calmer conditions. the signposts of the policy – such as equilibrium interest rates, output, unemployment, and the exchange rate – could begin to move. however, because these variables are not observable but must be derived from developments in other variables, it is highly uncertain at any given time how much they have changed once they start to move. furthermore, relative prices change more than they did before, but monetary policy cannot affect them except in the short term. sometimes it can be difficult to distinguish between such relative price changes and a general rise in the price level, which depends in the long run on monetary policy. in addition to this, it can often be difficult to determine at any given time which changes are temporary and could possibly be mitigated through economic policy and which ones are more permanent and nothing much can be done about, at least through monetary policy. these are exactly the conditions we are experiencing at present. there are clear indications that the equilibrium real exchange rate has risen with improved terms of trade, increased national saving, and a vastly improved external position. in addition, there are indications that equilibrium interest rates have fallen since before the crisis, and they have probably fallen still further as monetary policy has grown more credible and inflation expectations have been anchored more firmly at the target. in both instances, the question of how much remains unanswered. as far as the exchange rate is concerned, conventional measuring methods do not indicate that the real exchange rate is clearly above its equilibrium level. this is supported by the bank ’ s analysis, to be published next week in financial stability, which shows that 85 % of inflows into the foreign exchange market in 2016 were attributable to the current account surplus and transactions