benjamin e diokno : update on key developments under bsp ’ s area of responsibility speech by mr benjamin e diokno, governor of bangko sentral ng pilipinas ( bsp, the central bank of the philippines ), at the virtual credit rating agency ( cra ) meetings / imf - w b spring meetings, 11 april 2021. * * * alistair, marie, gene, christian, claire, a good day to all of you. i would like to thank you for this opportunity to update you on key developments under bsp ’ s area of responsibility. i would like to thank moody ’ s for affirming the philippines ’ baa2 rating and stable outlook during your july 2020 committee review meeting. our good ratings have helped maintain market confidence on the philippines amid these challenging times as shown in the successful fund - raising activities of the government last year and earlier this year. let me now update you on key developments under bsp ’ s purview. the unprecedented challenges from the pandemic revealed how critical it was that we diligently and deliberately pursued key structural reforms in the last two decades. we pursued these reforms as a result of tough lessons learned from past crises in the last few decades. thus, the philippines entered the crisis in a position of strength, with sound fundamentals and ample policy space. in line with the whole - of government response to the pandemic, the bsp acted swiftly and decisively by adopting measures to mitigate the pandemic ’ s impact on lives and livelihoods. we have, so far, injected more than php2. 0 trillion ( or us $ 43 billion ) in liquidity to the financial system, equivalent to 11 percent of the country ’ s gdp. these measures fall under three categories : first, were measures designed to boost market confidence. these included cuts in the policy rate and the reserve requirement. second, were extraordinary liquidity measures, which included provisional advances to the government and purchases of government securities in the secondary market. as mandated by enabling laws, these measures are time - bound and temporary and, as such, there should be no concerns about debt monetization risks in the philippines. third, were regulatory and operational relief measures to sustain the stability of the financial system and to provide easy access to financial services at a critical time. that said, the bsp recognizes that the timing for the unwinding of our response measures is crucial. we will carry out disengagement

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