target of 3. 0 percent ± 1. 0 percentage point for 2021. based on latest data, we expect point inflation for november to range from 3. 3 to 4. 1 percent. the latest cpi outturn is consistent with the bsp projections that while inflation could remain elevated in the near term, it would start to fall within the target range by the end of the year. meanwhile, inflation expectations remain firmly aligned with the baseline projection path for 20222023. results of the bsp ’ s survey of private sector economists for november 2021 showed an elevated mean inflation forecast of 4. 4 percent for 2021, 3. 5 percent for 2022 and 3. 2 percent for 2023. liquidity in the financial system remains ample, expanding by 8. 2 percent year - on - year in september 2021. this was faster than the 6. 9 - percent growth recorded in august on a monthon - month seasonally adjusted basis, m3 rose by 1. 3 percent. credit activity increased 2. 7 percent in september 2021, faster than the 1. 3 - percent expansion in august. the continued growth for the second month in outstanding loans of universal and commercial banks reflects the modest recovery in banks ’ overall lending attitudes along with 1 / 4 bis central bankers'speeches improved economic prospects. as of end - september 2021, gross non - performing loan ratio of the philippine banking system ( pbs ) stood at 4. 4 percent, higher compared to 3. 5 percent a year ago. the uptick, however, was accompanied by loan - loss provisioning with a non - performing loans coverage ratio of 84. 4 percent. the philippine banking system remains well - capitalized. as of the second quarter of 2021, its capital adequacy ratio is at 17. 2 percent, well above the 10 percent minimum threshold set by the bsp and the 8 percent set by the bank for international settlements. on the external front. the sustained rebound in key economies has spurred external demand. the country ’ s exports and imports of goods increased by 21. 3 percent and 31. 6 percent, respectively. cash remittances from overseas filipinos grew by 5. 6 percent in january to september 2021, from a 1. 4 percent contraction in the same period in 2020. meanwhile, business process outsourcing services in the first half of 2021 remained strong despite the disruption in business activities around the world. net foreign direct investments for the first eight months of 2021 increased due to positive foreign investor sentiment

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