amando m tetangco, jr : sustaining the economy ’ s growth saga through the 3ps of policymaking – proactive, pre - emptive, and prudent speech by mr amando m tetangco, jr, governor of bangko sentral ng pilipinas ( bsp, the central bank of the philippines ), at the euromoney philippines investment forum, manila, 24 march 2015. * * * i see from the conference agenda that you have already covered critical topics this morning. our place in the asean economic community, our prospects in the mass market and our infrastructure are certainly key issues for the philippines today. before you take on capital market issues and the rest of the forum topics, i thought it would help in the discussion of these sectoral issues, if i would spend the time allotted to me to speak on the broader economy that we operate in. in particular, i would like to speak briefly on the risks to the macroeconomy that the bsp sees in the horizon, and how we, from a monetary and banking policy framework, intend to address these. first, the risks : the risks we face come mainly from the external side. here i mean the interplay of three key factors : ( 1 ) the uneven global economic growth ; ( 2 ) the uncertainty of the oil price path and the ambiguity of the underlying drivers of the oil price decline ; and ( 3 ) the resulting divergence in monetary policy stance among major advanced economies. in the last year and a half, these factors have manifested themselves in the movement of global capital into us assets ( away from core europe and emerging markets ), an appreciating trend in the us dollar and a decline in global long - term interest rates. the rebalancing in global portfolios, as funds search for better yields, has surfaced in our domestic financial markets as volatility in the peso / dollar exchange rate, and in the local bond and equity markets. going forward, should the uneven global growth scenario persist, we may see this translate into more pronounced changes in trade patterns. monetary policy thrusts : in response, the bsp has opted to use a mix of monetary policy tools over the last year. these actions included increases in reserve requirements on bank deposits, upward adjustments in policy interest rates, a strategic presence in the fx market, alongside a clear communication plan, and other macroprudential measures. the bsp did these to allow it to : 1 ) better

was a product of lessons learned the hard way. perhaps this audience may not remember why there was a need to establish and organize what is now known as the bangko sentral ng pilipinas. bsp. of our 5, 322 work - force today, it is a fact that 84 % have been here less than 25 years. many of you are likely unfamiliar with the central bank of the philippines ( cbp ), an entity separate and distinct from the bsp, and the events that led to its dissolution. the dissolution of the cbp and the establishment of the bsp and a separate legal entity called the cb – board of liquidators ( cb - bol ) were premised on the urgent need for an independent central monetary authority … financially strong, enjoying fiscal autonomy, and free from political influence. this independence is constitutionally enshrined. for the last 25 years, we, the bsp, have proudly anchored ourselves on this independence. we protect and uphold its demand for responsibility and accountability. let me recall some key accomplishments … 1 / 4 bis central bankers'speeches in response to the asian financial crisis of the late 1990s, the bsp pursued structural reforms that changed and improved the conduct of monetary policy and financial supervision. in 2002, to better attain price stability objectives, the bsp formally adopted the inflation - targeting ( it ) framework. since then, we have established a solid track record for hitting our inflation targets and for being transparent on how we conduct monetary policy. in 2016, we established the interest rate corridor ( irc ) system to enhance monetary policy transmission and reinforce the development of the domestic financial market. this year, we have commenced the gradual phase - down of ultra - high reserve requirements to promote the efficiency of monetary policy. amid changes in financial market conditions and increasing sophistication of financial services, we recognized a growing need for financial regulations to adapt, or else risk irrelevance. this is just one of the lessons from going through two episodes of financial crises over the past two decades — financial supervision must be proactive instead of reactive. we have thus shifted to a more comprehensive, risk - based approach to banking supervision. this has significantly improved the safety and soundness of individual banks and promoted early identification and effective mitigation of system - wide financial risks. in december 2002, the bsp shifted to a real - time gross settlement ( rtgs ) system. this made payments and settlements more efficient. today, we have phil