of the global financial crisis ( gfc ). a large part of the country ’ s external debt remains in medium - to - long term maturity profile supporting a manageable debt repayment schedule over the medium - to - long term horizon. the philippine economy not only has ample monetary policy space but also fiscal space to respond to any downside risks to growth. the improving fiscal position of the government, supported by the series of fiscal reforms in both tax revenue generation and tax collection, provides the government the resources to increase public investments and support domestic demand. this fiscal space will also help boost private investment via the infrastructure push, and will consequently expand the country ’ s productive capacity to ensure a durable and sustainable growth in the years to come. moving forward, we are optimistic that the philippine growth momentum will be sustained. the current administration is in a strong position to push for reforms by leveraging on its strong political capital. results of institutional and governance reform surveys are positively recognized by independent third - party assessors. the country has indeed made important strides in enhancing its competitiveness over the past years. this is the essence of what we are doing on a pro - active basis, and this is to future - proof the philippine economy. the country ’ s improved creditworthiness, exemplified by the country ’ s elevation to investmentgrade territory, has cemented the philippines ’ status as an economy with one of the brightest prospects globally. our sound macroeconomic fundamentals, supported by structural reforms, have been duly recognized by credit rating agencies. international rating agencies have taken notice of the strides that the country has taken in the areas of economic reform and liberalization that have produced the current growth and stability the country exhibits. credit rating upgrades mean lower borrowing costs for the country. at investment grade, a country is seen to be fully able to service its foreign debts. fitch ratings and moody ’ s investors service kept the philippines one notch above minimum investment grade. meanwhile, the latest credit rating upgrades given by standard and poor ’ s and jcra in april 2019 and by the japan - based r & i credit rating agency just earlier this month place the philippines only a step away from our targeted single “ a ” grade in the next two years. having an a - rating will place the philippines in the radar of more investors, which bodes well for attracting more job - generating investments. the same optimism is shared by third - party assessors such as the international monetary fund 4 / 7 bis central bankers'speeches ( imf

; public administration and defense, compulsory social security ; trade and repair of motor vehicles ; and construction. despite the el nino phenomenon and the lingering effects of african swine fever, the agriculture sector managed to grow by 1. 5 percent during the year. in 2019, headline inflation was 2. 5 percent, well within the government ’ s target range of 2. 0 - 4. 0 percent, and was supported mainly by decelerating food inflation. the benign inflation is expected to support consumption demand moving forward. this slide shows the series of bsp policy actions pursued in 2019. the much improved inflation dynamics so far alongside the benign inflation outlook have given the bsp space to reduce policy rate by 25 bps each in may, august, and september 2019, respectively, as a pre - emptive move against the risks associated with weakening global growth. in its most recent monetary policy stance meeting on 6 february 2020, the monetary board concluded that a further preemptive reduction in the policy rate to support market confidence was necessary and cut policy rate by 25 bps. 2 / 7 bis central bankers'speeches it was also noted that the phenomenal spread of the 2019 novel coronavirus could have an adverse impact on the global economy and market sentiment in the coming months. looking ahead, we expect inflation to gradually rise but remain on a target - consistent path for 2020 and 2021. inflation expectations also continue to be firmly anchored within the target over the policy horizon. meanwhile, the risks to the inflation outlook continue to tilt slightly toward the upside in 2020 and toward the downside in 2021. this is depicted in the fan chart on the left - hand side. upside risks to inflation over the near term arise mainly from potential upward pressures on food prices owing in part to the african swine fever outbreak and tighter international supply of rice. moreover, there continues to be the burden on the economy posed by the ongoing taal volcano eruption and the aftermath of typhoon tisoy. however, uncertainty over trade and economic policies in major economies such as china, us and europe continue to put downward pressure on global demand, thus easing upward pressures on prices of some commodities like oil. meanwhile, the philippine banking system remains strong and sound. philippine banks are sufficiently capitalized and past due ratios have also declined over the years, contributing to greater ability to intermediate funds, manage risk, and increase profitability. the stability and soundness of the banking system is due to a large part to the strategic and progressive financial reform agenda of the bs