amando m tetangco, jr : career executives in government – making lives better for filipinos speech by mr amando m tetangco, jr, governor of the central bank of the philippines ( bangko sentral ng pilipinas ), at the ces circle forum, manila, 26 january 2009. * * * executive director allones of the career executive service board, distinguished panelists, the elite corps of government employees who make up the career executive service officers and eligibles, colleagues in government service, special guests, good afternoon. on behalf of the men and women of the bangko sentral ng pilipinas, i welcome all of you to our head office for the inaugural ces circle forum. circle, which stands for creative innovations and reforms for committed leadership and effectiveness, is a most appropriate symbol for this program that aims to nurture thought leadership in government : a circle is never - ending and so should our efforts to learn and continuously find better and more efficient ways of doing things. i also find the timing for this new program for cesos and ces eligibles quite auspicious. this is the first month of the year and, coincidentally, the celebration of the chinese new year – the beginning of the year of the ox, one of the most hardworking and productive creatures on earth. ladies and gentlemen, for its resolute efforts to strengthen and broaden professional competence in government let us give the ces board a well - deserved round of applause! the theme for this circle forum is thought - provoking and challenging : bagong taon, mga bagong hamon, ceso ’ t eligibles, paano ka tutugon? ” earlier, you heard about the labor situation as well peace and national security issues. on my part, i cannot overemphasize that this will be a particularly challenging year for us as a country as we grapple with the impact of the ongoing global financial crisis. what began with the market turmoil surrounding u. s. subprime mortgages, has become an economic and financial crisis that threatens the global community in magnitudes reminiscent of the 1930s “ great depression ”. no economy has been unscathed by the global headwinds. and the crisis has landed on our shores as well. as leaders and managers in our respective government agencies and offices, the burden is upon us to craft and implement policies and measures that will enable our country and our people to ride out this economic and

banks as well as temporary purchases of assets, both private and public. circumvent the zero lower bound and bring down real long - term interest rates through purchases of government bonds, and / or interest rate guidance. as a consequence, central banks ’ balance sheets expanded by a factor of three, dramatically increasing their role in financial intermediation and sometimes raising concerns, at least in some quarters, about the possible inflationary impacttogether, this diversification and the increase in size have created more complex interactions with fiscal policies. specifically, asset purchases are sometimes seen as “ quasi fiscal policies ” both on the asset side ( due to the potential risks attached ) and the liability side ( when they contribute significantly to meeting the funding needs of the sovereigns ). bis central bankers ’ speeches at the time they were decided, those exceptional interventions were absolutely necessary. although it had been forgotten, central banks were initially created to protect the economy from excessive financial disturbances. this was, historically, their “ raison d ’ etre ”. as ultimate and unique providers of liquidity, they cannot escape this responsibility and let the financial system and the economy collapse. at the same time, by doing so, central banks have exposed themselves to a number of risks first, there are risks linked to balance sheet expansion. they cannot be ignored, although all central banks have been extremely careful in valuing the assets purchased or taken as collateral. second, they run the risk of blurring the lines between fiscal and monetary responsibilities. a dynamic use of their balance sheets by central banks has effects on the allocation and distribution of resources in the economy. they may favour or penalise some types of collateral or certain borrowers. if central banks take on additional responsibilities in the area of financial stability, they will have to do so in close cooperation with fiscal authorities, thus exposing themselves to possible interferences with monetary policy. the major risk, however, is the risk of confusion. a multiplicity of interventions could be interpreted as a relative dilution of objectives. there is a tendency by market participants and some policymakers to consider central banks to be “ universal problem solvers ” whose balance sheets can be used, without cost, for all purposes. there is also a doubt, at least an ambiguity, in the minds of some analysts, about the true purpose of government bond purchases. central banks ’ activism may create doubts as to their ability to stick to their core mandate – price stability – in the face of increasing pressures and constraints.