mortgage market have focused on the confluence of several driving factors, including a loosening of us monetary policy at the beginning of the decade ; an easing of standards for mortgage lending, encouraged in part by a range of legislative and policy changes that aimed to make home ownership more accessible to households that had been historically underserved by mortgage lenders ; the rise of complex structured products, the overall riskiness of which proved to be difficult to properly monitor and assess ; fragmented and loose supervision of financial institutions which, among other things, kept us investment banks outside fed oversight ; and the inaccurate ratings of credit rating agencies. in the case of the philippines, the restructuring of our banking system in the aftermath of the asian financial crisis was achieved without the infusion of public funds. this helped avoid moral hazard issues mentioned earlier and actually promoted greater prudence in banking activities. and since most of our financial institutions were still in the process of strengthening their balance sheets when securitization began to be popular among investors abroad, their exposure to these structured products is relatively limited. thirdly, i cannot overemphasize the importance of a strong supervisory and regulatory framework. the fundamental rationale for banking regulation is to guard against moral hazard, as banks use and lend out funds sourced from deposits. in the philippines, the banking system has benefited from our continuous efforts to better monitor, mitigate, and manage risks. a package of banking reforms was implemented in the areas of risk management, corporate governance, capitalization, and information disclosure practices – such as rules to disclose detailed information on banks ’ restructured and nonperforming loans. going forward, our focus will be on further enhancing the regulatory and supervisory framework ; promoting market discipline in financial markets through enhanced reporting and disclosure requirements ; improving corporate governance through promotion of compliance with international accounting and financial reporting standards ; enhancing the implementation of risk - based supervision ; strengthening ties with other regulators ; continuing support for the development of a deep and efficient capital market, as well as the passage of necessary legislative reforms. globalization and financial liberalization much as the “ great moderation ” has highlighted the benefits of globalization, the recent global turmoil has also highlighted its challenges. there is no question that freer trade in financial products and services confers significant benefits – direct as well as collateral ones – to those countries that are prepared for it. these benefits come in the form of – among other things – portfolio diversification, greater access to foreign exchange, financial depth and technological transfers. at the same

amando m tetangco, jr : competitiveness, growth, and equity in a globalizing economy – a central banker ’ s view welcome remarks by mr amando m tetangco, jr, governor of the central bank of the philippines ( bangko sentral ng pilipinas ), at the 46th annual meeting of the philippine economic society, manila, 14 november 2008. * * * the distinguished officers and members of the philippine economic society led by dr. aldaba, fellow central bankers, our friends from the media, special guests, good morning. on behalf of the monetary board, i welcome all of you to the bangko sentral ng pilipinas, the venue of the 46th annual meeting of the philippine economic society ( pes ). to us, the annual meetings of the pes have always served as an invigorating collegial setting among professional economists in the philippines for the dissemination of research, incisive debate, and careful consideration of critical policy issues. this year ’ s meeting is being held in conjunction with the 11th international convention of the east asia economic association or the eaea. this marks the first time that our country is hosting eaea. it is therefore with keen anticipation that we look forward to the discussions ahead, especially in light of the timeliness of this year ’ s pes theme of “ competitiveness, growth, and equity in a globalizing economy. ” at the same time, eaea ’ s theme of “ regional risk management in east asia ” is particularly relevant given the present global financial crisis that is likely to be the deepest in decades. given the broad - ranging impact of the financial market turmoil, the scope of the conference papers addresses varied issues : this includes the need for complementary interventions in the areas of energy and infrastructure ; human capital investments ; governance ; competition policy ; and the need to integrate the poor into the mainstream of development. in other words, there would be much food for thought along these lines in subsequent discussions. on my part, i will focus on the conference theme from the point of view of a monetary policymaker. globalization and the great moderation ladies and gentlemen. prior to the current economic and financial turmoil, the world had experienced a prolonged period of above - trend growth. an important driving force behind this is globalization – as manifested by an unprecedented increase in the trade in goods and services around the world, coupled with an even greater expansion in the cross - border movement of capital flows. in fact