. the move disrupted businesses and constrained mobility and caused the economy to contract in the first half of the year. but it helped delay the spread of the virus as it allowed for the gradual expansion of the country ’ s healthcare capacity. to help stimulate the economy, the bsp ’ s monetary board cut the policy rate by a total of 175 basis points in a span of five months, bringing the key policy rate to an all - time low of 2. 25 percent. 1 / 4 bis central bankers'speeches in addition, the monetary board gave me authority to cut the reserve requirement ratio by a total of 400 bps this year. so far, i have cut it by 200 bps to 12 percent. these actions are meant to encourage banks to increase lending to households and businesses, and, consequently, pump additional liquidity to stir economic activity. as a result, from april to august 2020, we have seen a 1, 040 percent growth in the average daily balance of banks ’ loans to msmes. in sum, the total amount of additional liquidity injected into the system from these collective measures is estimated at php 1. 4 trillion, equivalent to 7. 3 percent of gdp. still, our toolkit is far from exhausted, and we stand ready to do more if needed. speaking of toolkit, the bsp is set to issue our own debt securities starting today. this will be an additional monetary policy instrument under the interest rate corridor ( irc ) framework. the use of bsp securities for liquidity management supports the shift to more market - based monetary operations. it also allows the bsp to conduct monetary operations in line with international central banking practice. to say that the past six months have been challenging is a gross understatement. but we cannot be fixated with the here and now of the current crisis if we want the philippines to be one of the leading emerging economies in the post - covid era. the right attitude is that while the national leaders and health authorities worry about the pandemic, we must look beyond the challenges of the present situation. this early, we must lay the groundwork for stability and prosperity in the medium and long run. accordingly, we are working hard for the passage of various legislative measures that will provide support and relief to industries that are heavily affected by this pandemic and help the economy rebuild better. the financial institutions strategic transfer bill ( fist ) shall provide for the creation of a system that will insulate banks from

share the story of a small food producer who was able to grow her home - based business with the help of a microfinance loan. her business was able to put food on their family ’ s table, send her children to school and improve the overall quality of life of their family. we met at an awards program for microentrepreneurs. what i distinctly recall is that a year after she won the award, she was given the opportunity to export her goods. sadly, she was unable to meet the order due to lack of capacity and additional financing from her microfinance institution. in short, she lost the opportunity to expand her business, to earn more for her family, to generate more employment and to add to her community ’ s income. ladies and gentlemen, this is a poignant story of a success half - realized. on one hand, we saw how access to credit made such a huge positive impact on the life of a microentrepreneur from the marginalized sector. on the other, we saw how capacity limitations and the inability to access additional financing prevented her from realizing the full potential of offshore markets for her products. multiply this story many times over and you can imagine the countless missed opportunities for improving the lives of many more filipinos. sayang. as the training arm of the banking industry, baiphil ’ s role is crucial in building the capacity of our banks to transform into opportunities, the challenges from financial inclusion and integration. toward this end, i would like to share my three - fold challenge to baiphil, and we have another acronym b. i. g. b is for build. build our banks ’ capacity so that they can compete under regional banking standards. what comes to mind are corporate governance, appropriate risk management and internal controls, commensurate capital structure, and clear business plans with track record, among others. the regulations of the bsp support this objective, particularly our recent landmark issuances and those in the pipeline, such as the credit risk management framework, the supervisory enforcement policies, and the operational risk management. they provide fundamental principles that empower banks to determine their business model, the markets they want to serve, the products they want to develop and the risks they are willing to take and manage. the i in big stands for improve. i ask baiphil to help improve our banks ’ ability to develop responsive products that are suited to the needs of the markets they want to serve. this