our local debt market, liberalize further the domestic foreign exchange market, digitalize our payment system, and ultimately enhance access to financial services and products. all these complement our financial inclusion agenda. the philippines has a lot of potential as a promising investment destination. our capital market is being positioned to serve as an important source of long - term funding, in support of the national government ’ s “ build, build, build ” agenda. developing the domestic capital market is critical given its role in complementing bank lending to support economic growth. last august 2017, the bsp, together with the department of finance ( dof ), securities and exchange commission ( sec ) and bureau of the treasury ( btr ), unveiled the roadmap to hasten the development of the domestic debt market. deliberately, we sequenced and calibrated the roadmap to prioritize urgent and foundational issues. the initial phase will focus on improving market benchmarks, covers initiatives to increase volume of treasury issuances, promotes market - making and price discovery, enhances the yield curve, establishes an organized repo market, and strengthens regulatory oversight. we look forward to the launch of the first trade in the organized repo market by next month. on the part of the bsp, we have started improving the regulatory framework for project financing starting last year with the issuance of circular no. 914. just this month, we issued circular no. 976, which enhances prudential reporting requirements over project finance exposures. this will sharpen bsp ’ s ability to assess bank exposures to project finance, and timely deploy macroprudential measures, if necessary. finally, we issued amendments to provide banks and quasibanks ( qbs ) more flexibility in issuing bonds and commercial papers. these proactive measures are important as demand for infrastructure picks up and gains traction. complementing capital market development initiatives, we are also further liberalizing and rationalizing foreign exchange ( fx ) rules in order to reduce the cost of doing business and facilitate job - generating investments. this forms part of a broader fx market reform agenda to enhance transparency, improve price discovery, and increase availability of fx products, especially hedging instruments. ultimately, a deeper fx market will increase resilience of our domestic economy against external shocks even as we allow greater exchange rate flexibility. finally, we come to a topic that is closest to my heart, our advocacy for financial inclusion. we are passionate about em

of an irc system in the philippines is the strengthening of monetary policy transmission by ensuring that money market interest rates are meaningfully influenced by the bsp ’ s policy rate. importantly, the irc system also supports the development of the philippine capital market by promoting money market transactions and active liquidity management among philippine banks. the ensuing higher level of activity in the money market in turn helps promote price discovery. for the first nine months of 2017, the inflation rate averaged 3. 1 percent. we remain on track to stay within the target range of 3. 0 percent ± 1. 0 percentage point for 2017. this sustained low and stable inflation lends support to robust household spending, preserves the public ’ s purchasing power and supports the demand for goods and services. based on our latest forecasts, inflation is likely to settle near the midpoint of the government ’ s target range of 2 to 4 percent in 2017 to 2019. 1 / 4 bis central bankers'speeches carefully - calibrated and well - communicated monetary policy has effectively anchored market expectations. it has enabled us to maintain price stability while providing support to economic expansion. we shall continue to improve the irc system towards a more market - friendly implementation of monetary policy. the financial sector also demonstrates stability and sustained growth. domestic liquidity conditions remains ample to finance the requirements of a growing economy. bank lending is upbeat and loans continue to flow into the country ’ s productive sectors such as wholesale and retail trade, motor repair ; manufacturing ; electricity, gas and water utilities ; financial services ; and real estate. the level of non - performing loans ( npls ) has been relatively flat since 2008 despite the continued uptrend of total loan portfolios ( tlp ). the philippine banking system ’ s non - performing loan ratio ( npl ) stayed low at 2. 0 percent of total loans as of end - august 2017. this is fully covered as npl coverage ratios registered at 114. 1 percent. philippine banks have developed a good ability to absorb losses. data as of end - june 2017 shows that the capital adequacy ratio ( car ) of universal and commercial banks is stable at 15. 3 percent on a solo basis and 16. 0 percent on a consolidated basis. this is well above the minimum car requirements. this robust ability of the banking system to provide credit support to the economy is the result of a long and systematic reform process, boldly implemented since the asian financial crisis. these reforms include asset cleanup, industry consolidation