system, robust external payments position, and a manageable fiscal deficit. the philippine economy has the essential elements to post a strong recovery this year. moving forward, the bsp ’ s actions and policy thrust will continue to be anchored on its core mandates of promoting price and financial stability. 1 / 2 bis central bankers'speeches the bsp will remain vigilant over the current inflation dynamics and operating environment with a forward - looking perspective to ensure that the monetary policy stance supports economic recovery and addresses any risks to our price stability mandate. it addition, bsp will intensify its monitoring and surveillance over its supervised institutions to ensure that they remain responsive to emerging risks and to promote the continued soundness, stability, resilience, and inclusivity of the banking system. lastly, the bsp will continue to adopt policies that will strengthen the economy ’ s resilience to external shocks. these will include maintaining a market - determined exchange rate, sustaining a comfortable level of reserves, and keeping the country ’ s external debt manageable. i said this before, and i ’ ll say it again : we should not let this unprecedented crisis go to waste. let us learn from it. let us all continue to discover and tap into our inner strengths. our shared fortitude as a nation will enable us to withstand all adversities and come out of this pandemic as economic champions. may our award - winning members never tire of leading the capital market in conceptualizing and implementing new and bold strategies for the industry and for our country. continue to reform, innovate, and transform. again, congratulations to our awardees and to the pds group. 2 / 2 bis central bankers'speeches

in capital spending and employment in these sectors. a surge in investment in machinery and equipment across the economy suggests that firms are taking advantage of the stronger exchange rate ( which reduces the cost of imported machinery and equipment ) to improve their productivity and enhance their competitiveness. many manufacturers are taking advantage of lower - cost imported inputs or shifting their focus to highervalue - added production. labour is also adjusting to the terms - of - trade shock. the evidence shows that labour markets in canada are relatively flexible, which helps the country adjust to labour - demand shocks. 7 while employment has decreased markedly in manufacturing since 2004, it has grown strongly in non - farm primary industries, in construction, and in other sectors that are driven by the strength in domestic demand - for example, finance, insurance, real estate, and health and education services. these developments have involved a sharp increase in net migration of labour to alberta from other parts of the country. employment growth in ontario and quebec has moderated a bit, but still averaged a relatively robust 1. 3 per cent from july 2004 to july 2006. the economist coined this term in 1977 to describe the adverse effect that large - scale natural gas development in the north sea had on dutch manufacturing through a real appreciation of the guilder. an excellent general equilibrium analysis of booms in the resource sector can be found in w. m. corden. 1994. " booming sector and dutch disease economics : survey and consolidation. " oxford economic papers, new series 36 ( 3 ) : 359 - 80. t. bayoumi, b. sutton, and a. swiston. 2006. " shocking aspects of canadian labor markets. " imf working paper no. 06 / 83. overall, the canadian economy has been adjusting rather well, though not without pain, to a significant change in economic circumstances. however, the adjustment is not over yet, and challenges remain. there are still barriers to labour mobility and to interprovincial trade, and pressures are building on housing markets and infrastructure in regions of strong growth - most notably, alberta. these are reflected in intensified labour shortages and differentiated pressures on wages and housing prices. because governments receive a significant share of increased commodity - related revenues, they have the power to alleviate, but also to magnify, some of these pressures. let me now turn to the implications of a terms - of - trade shock for labour productivity and for potential output. implications for labour productivity and potential output a change in the terms of