account and the balance of payments at 2. 3 percent and 1. 6 percent of gdp, respectively for this year. the philippine banking system remains sound and stable. banks are well capitalized and also able to keep their bad debts manageable — much lower than levels seen in the aftermath of the asian financial crisis. speaking of bad assets, the newly signed law – financial institutions strategic transfer or fist will help banks manage non - performing loans down the road by allowing banks and other financial institutions to dispose of their npls to asset management firms. in closing, i would like to highlight three things : first, the adverse impact of the pandemic on the philippines will be transitory. our macroeconomic fundamentals remain sound, and our medium - term growth prospects remain strong. 2 / 3 bis central bankers'speeches second, we have shown throughout this pandemic our commitment to the reform agenda and pursuing responsive policies in a timely manner. the reforms and policies we have painstakingly pursued amid the challenging circumstances will help ensure there will be no permanent scarring on the economy ; and third, the reform momentum will help fuel the philippines ’ recovery, address structural issues, enhance long - term growth potential as well as improve the philippines ’ credit profile. thank you. 3 / 3 bis central bankers'speeches

amando m tetangco, jr : the philippines – macroeconomic outlook for speech by mr amando m tetangco, jr, governor of the central bank of the philippines ( bangko sentral ng pilipinas ), at the oath - taking of the officers and directors of the economic journalists association of the philippines, makati, 11 february 2008. * * * president donna gatdula, other distinguished officers and members of the economic journalists association of the philippines, special guests, friends, good evening. it is a great pleasure for me to address this induction ceremony and this gathering of highly informed watchers of the philippine economy. as economic journalists, you continue to be a major channel for transparency and provider of key economic information for the business community. from the point of view of the bsp, you have also played a vital role in our efforts to communicate the basis and implications of monetary policy to the markets and the general community. i am doubly pleased because i see many familiar faces, including the relatively new reporters on the beat and those i met long before i became governor. but don ’ t worry – i will not disclose how long ago that was. instead, i will focus on the topic you have asked me to discuss tonight : the macroeconomic outlook for 2008. to put things in perspective and to provide context for our outlook, i will begin my presentation with a review of the past years. economic developments i am sure you have read or heard in fact some of you have written that the philippines is now experiencing the most stable economic environment in more than two decades. this is not just a “ tale ”. the numbers support this story. the philippine economy grew at the highest gdp growth rate of 7. 3 percent in three decades in 2007. this growth rate was above the government ’ s target of 6. 1 - 6. 7 percent set for 2007. this was boosted by the expansion of services and the impressive performance of both agriculture and industry. on the demand side, growth was driven by government consumption and investments. this strong growth was achieved in a period of benign inflation. headline inflation last year stood at 2. 8 percent, the lowest in 20 years. this is now comparable to developed economies. in turn, low inflation has resulted in lower interest rates, again the lowest in 21 years. this has brought down the cost of money for borrowers, whether personal or corporate. in this respect, we achieved a good convergence of high growth and low