nestor a espenilla, jr : moving the capital markets dialogue forward speech by mr nestor a espenilla, jr, governor of bangko sentral ng pilipinas ( bsp, the central bank of the philippines ), at the 120th anniversary of the bureau of the treasury, manila, 27 november 2017. * * * finance secretary carlos g. dominguez iii, sec chair teresita j. herbosa, pdic president roberto b. tan, national treasurer rosalia v. de leon, commissioner ephyro luis b. amatong, bap senior associate director pinky s. padronia, mart president michael joseph m. delfino, colleagues from government agencies, friends from industry associations and media, good afternoon. today is a joyous occasion marked by significant milestones. my heartfelt congratulations to the bureau of the treasury ( btr ) as you celebrate your 120th anniversary. it is also apt that today, we witness the launch of several initiatives that will deepen the local currency debt market, including especially infrastructure support to facilitate market transactions.... there are so many occasions of significance on this day! looking back in a 2006 paper i wrote, i described the corporate bond market as “ expanding but nascent ” 1. while our local currency bond market has grown substantially over the last decade, it still remains one of the smallest in the region. the numbers show that the outstanding local currency bonds represent only 34. 2 percent of the country ’ s gdp, largely composed of government - issued debt. as market participants, you are very familiar with the challenges we face in our local currency debt market. irregular supply and market fragmentation … imperfections of pricing methodologies that lead to problems related to an unreliable yield curve … limited ability of the market to offer hedging instruments … we have seen how these long - outstanding issues limit the growth and development of our debt market. three months ago at a kick - off event at the bangko sentral ng pilipinas ( bsp ), we began, what i called then, “ a meaningful conversation ” among market participants – prime movers and stakeholders in our debt market, from both the government and private sectors. understanding the importance of a deeper and more active capital market, to complement bank lending and serve as an alternative source of industry financing and to manage risks, we made a bold commitment, and unveiled the philippine roadmap for developing the local debt market. the roadmap

communities summit, joint center for political and economic studies, washington, d. c., october 18, https : / / www. federalreserve. gov / newsevents / speech / cook20231018a. htm. quoted text is from a video provided by the king center of coretta scott king speaking at “ overcoming the barriers to full employment ” at ebenezer baptist church, atlanta, january 13, 1978. - 3economy. maximum employment promotes business investment, boosting productivity and the economy ’ s long - run growth potential. and the full participation of all segments of society should foster the development and dissemination of more ideas, including more diverse ideas, more invention, and more innovation. 6 a strong labor market also tends to increase labor force participation and makes employers more willing to recruit and upgrade the skills of workers. when the federal reserve held a series of community outreach events in 2019, called fed listens, one of the key messages we heard was that a strong labor market brings in people who might be on the sidelines of the economy but who have skills that can be developed, if given a chance. benefits of price stability now let us consider the purpose of the other part of our mandate, price stability, by which i mean low inflation. 7 former federal reserve chair alan greenspan once said, “ price stability is that state in which expected changes in the general price level do not effectively alter business or household decisions. ” 8 he meant that when households and businesses can reasonably expect inflation to remain low and stable, they are able to make sound decisions regarding saving, borrowing, and investment, thereby contributing see lisa d. cook, janet gerson, and jennifer kuan ( 2022 ), “ closing the innovation gap in pink and black, ” in josh lerner and scott stern, eds., entrepreneurship and innovation policy and the economy, vol. 1 ( chicago : university of chicago press ), pp. 43 – 66 ; paul m. romer ( 1986 ), “ increasing returns and long - run growth, ” journal of political economy, vol. 94 ( october ), pp. 1002 – 37 ; and paul m. romer ( 1990 ), “ endogenous technological change, ” journal of political economy, vol. 98 ( october ), pp. s71 – 102. see ben s. bernanke ( 2006 ), “ the benefits of price stability, ” speech delivered at the center for economic