benjamin e diokno : economic and financial developments and bangko sentral ng pilipinas ’ policy responses speech by mr benjamin e diokno, governor of bangko sentral ng pilipinas ( bsp, the central bank of the philippines ), at the joint foreign chambers of the philippines 10th anniversary forum “ arangkada philippines ; pathways to a better future ”, virtual, 30 november 2021. * * * officers and members of amcham philippines and the joint foreign chambers of the philippines, my fellow speakers, everyone who are with us virtually, good morning. thank you for inviting me to deliver a keynote address in your tenth anniversary forum entitled “ arangkada philippines : pathways to a better future. ” arangkada comes from the spanish word arrancada which means accelerate. my talk will focus on economic and financial developments and bsp policy responses to ensure that the philippine economy will continue to accelerate towards a better future. after five quarters of economic contractions, the country ’ s real gdp grew by 12 percent in the second quarter of 2021 followed by a 7. 1 percent growth in the third quarter. for the first three quarters of 2021, the philippines ’ economic growth averaged at 4. 9 percent, within the government ’ s target of 4 to 5 percent for the year. in september 2021, however, the country ’ s unemployment rate increased further to 8. 9 percent from 8. 1 percent in the previous month. this result is not surprising, given the extension of strict lockdown measures during the month. what is notable here, however, is that some of the jobs lost at the start of the pandemic have been gradually recovered, with the number of workers employed in september exceeding that of pre - pandemic level. the re - imposition of stricter lockdown measures, particularly in the national capital region, contributed to lower business confidence in the third quarter survey, although businesses are more optimistic for the last quarter of the year and in the next 12 months. on the other hand, consumer sentiment continues to improve due to expectations of availability of more jobs, additional or higher income, and effective government policies and programs, particularly in addressing covid - 19 - related concerns. the country ’ s year - on - year headline inflation decreased further to 4. 6 percent in october 2021 from 4. 8 percent in september, bringing the year - to - date average inflation to 4. 5 percent. this is above the government ’ s inflation

both of which have over a billion in population. financial inclusion and remittances indeed, there are many challenges – and opportunities – in providing access to financial services to migrant workers and their families. the remittances sent home are mostly used for consumption expenditures – 97. 3 % of of households used the remittances to purchase food and other household needs. this helps drive our economy. bsp department of economic statistics more than 10 million ofs sent $ 25. 8 billion worth of cash remittances in 2015, up by 4. 6 % from $ 24. 6 billion in 2014. bis central bankers ’ speeches another positive development, as indicated by a bsp survey ( ces ), is the rising proportion of households directing remittances received to savings – from 7. 2 % in 2007 to 43. 4 % in the first quarter this year. this is one of the many reasons why philippine bank deposits have been hitting record high levels - it was p8. 5 trillion in december 2014 and over p9. 2 trillion as of december 2015. nevertheless, the challenge and the opportunity is to encourage more investments by of households ; it continues to lag way behind savings. as indicated by our survey, households that allocated part of their remittances for investments, increased from 2. 3 % in 2007 to only 6. 5 % in the first quarter this year. that is over a period of nearly nine years! for institutions, the challenge is to develop and promote products suited to the needs of ofs. financial education is essential for ofs to realize the opportunities - as well as possible pitfalls - in investments. equally important, financial institutions should consider it their responsibility to inform ofs of their rights and protection as financial consumers. the importance of remittances for enhancing the financial stability of ofs and the economic growth of our country cannot be overemphasized. as part of the bsp ’ s program to develop a more inclusive financial system, we have put in place policies and programs to enable the development of a wide range of products that can cater to the needs of ofs and their beneficiaries. we also continue to implement a nationwide economic and financial learning program where we have a special focus on ofs. in fact, the bsp won the global forum on remittances and development public sector award for 2015 in recognition for what it described as outstanding commitment, innovation and impact in promoting remit