armando m tetangco, jr : central banking and symphonies speech by mr armando m tetangco, jr, former governor of bangko sentral ng pilipinas ( bsp, the central bank of the philippines ), at the 24th anniversary program of the bangko sentral ng pilipinas, manila, 3 july 2017. * * * happy anniversary bangko sentral ng pilipinas! ladies and gentlemen, we celebrate the 24th year of the bsp on a high note. just last month, the singapore - based publication the asian banker named the bangko sentral ng pilipinas as the best macroeconomic regulator in asia - pacific. the asian banker also presented the bsp governor with a “ lifetime leadership achievement award ”, citing the central bank ’ s contributions to the philippine financial system and the economy under his watch. last may, a report published by the international credit rating agency s & p said our “ central bank has a record of supporting sustainable economic growth and responding appropriately to changing economic circumstances. ” s & p added that our “ ability to maintain macroeconomic and price stability through an economic cycle has been tested, including a period of exogenous shocks. ” and last february, the hong kong - based publication financeasia named the bsp governor “ outstanding achievement awardee ” for excellent stewardship of the bsp, managing the difficult task of keeping inflation under control at the same time as giving the country room to grow and fulfill its potential. financeasia cited our contributions to philippine economic development and to the improvement of central banking standards in the region. indeed fellow bspers, our monetary and banking policies have continued to provide the stability needed by our economy to overcome the humps and bumps, and the twists and turns in the global landscape, including the global financial crisis and its lingering effects on economies and central banks. here in the philippines, we did not only survive the gfc, we continue to thrive. ladies and gentlemen of the bsp, we accomplished this together. bspers, past and present, lahat may kontribusyon! as i keep saying, the bsp is not a one - man band. the individual and the institutional awards we receive belong to all bspers across the country – mula luzon, visayas at mindanao! thank you and congratulations bspers! the way i see it, the role of a central bank governor has a lot in common with that of a musical conductor, who leads people from different disciplines to

moved to ensure adequate liquidity in the financial system to support credit activities. the bsp extended provisional advances to the national government worth 10. 3 billion us dollars in 2020 and 2021, which was reduced to 5. 7 billion us dollars in january 2022. the national government has fully paid these advances ahead of the maturity schedule on june 11, 2022. the bsp also provided big banks extra leg room to extend credit via a 200 - basis points reduction in their reserve requirement ratio to just 12 percent. in total, the bsp infused to the financial system an amount equivalent to 11. 3 percent of the gdp. we have also started the normalization process for our policy rate through a 25 - basis point hike to 2. 25 percent last may 19. also, as part of the policy normalization process, the bsp reconfigured its government securities purchasing window into a regular intraday facility. the timing and conditions of our exit strategy continue to be data driven. it is a balancing act guided by several factors, such as inflation and growth outlook. a well - planned, well - calibrated, and well - communicated exit plan will prevent substantial market volatility, reduce potential spillovers, and sustain our recovery momentum. the philippines is also determined to maintain fiscal discipline. after posting a higher debt - to - gdp ratio as a result of massive spending for covid response, we are keen to return to our fiscal consolidation path. based on the fiscal program, the national government ’ s debt should go down to 60. 4 percent in 2024. it is worth emphasizing that our current level of debt - to - gdp ratio is well below the figure for other economies, some of which have debts over 100 percent or even 200 percent of their gdp. our external accounts are also healthy. our gross international reserves as of end - april this year stood at 106. 8 billion us dollars, equivalent to 9. 4 months ’ worth of imports. the received doctrine is that three months of import cover is sufficient. in line with the movement of other emerging market currencies, the philippine peso depreciated by 2. 62 percent to p52. 37 as of may 31 from its end - 2021 level. the bsp keeps its market - determined exchange rate policy and intervenes only to ensure orderly market conditions and prevent excessive short - term volatility in the exchange rate. moving on to the banking sector, banks continue to serve as a pillar of strength