actual spending of the government entity can exceed the spanish economy ’ s nominal potential growth rate. since government revenues have an elasticity with respect to nominal gdp of approximately one, the spending rule involves linking its growth to that government revenues. spending growth may only exceed this reference rate if there is an increase in revenues that is recurrent in nature ; likewise, legal changes involving permanent losses of revenue should automatically lead to a downward revision in the spending threshold. one of the advantages of this rule is that increases in government revenues above their normal trend must be saved, such as during the upswing prior to the last crisis, when very significant extraordinary revenue increases associated with the real estate boom were recorded. also, by linking spending to the economy ’ s potential rather than its actual growth, and by excluding from its definition nondiscretionary spending on unemployment benefits, public spending should grow more slowly than gdp and revenues during economic upswings ( when actual gdp and, therefore, revenues are growing at above their potential rate ), while in recessions the opposite should occur. thus, the spending rule requires general government to accumulate budgetary savings during economic upswings that may be used during downswings, allowing the behaviour of public finances to be disciplined and automatic stabilisers to function at the same time. obviously, if the starting point is a structural budget deficit, then the return to budget balance will require spending to grow more slowly than nominal growth or else a discretionary increase in revenues, until balance is achieved. evidence suggests that the application of a rule of this type during the upswing prior to the last crisis would have substantially curbed the public spending permitted each year, allowing the generation of significant room for manoeuvre that would have limited the deterioration in public finances during the crisis. finally, pressing ahead with the various pending reforms would raise the economy ’ s growth potential which – through its effects on employment and productivity – is one of the basic determinants of reductions in public debt. these reforms include, in the regulatory area, revision of regulations that hinder the market entry of new firms or that limit their growth ; in the labour market, reforms to reduce the degree of duality and to improve the employment prospects for the long - term unemployed ; and the need to increase the efficiency of the legal system and of the education system and to promote the accumulation of technological capital, among others. accordingly, any delay in their implementation or, worse still, a hypothetical reversal of reforms already introduced since

nestor a espenilla, jr : collective and individual competitive advantages speech by mr nestor a espenilla, jr, governor of bangko sentral ng pilipinas ( bsp, the central bank of the philippines ), at the powwow 2017, cebu city, 17 november 2017. * * * philexport cebu chairman apolinar suarez, jr. ; president mr. nelson bascones ; officers and members of philexport cebu ; special guests ; ladies and gentlemen maayong gabii. i am grateful for the invitation to speak about the bsp ’ s policies and thrusts, my first as bsp governor, before this distinguished group of business leaders and exporters. a major industrial hub, cebu plays a crucial role in philippine economic development. with at least 27 it parks and centers ; 7 manufacturing zones ; 2 tourism economic zones ; and 1 agro industrial economic zone, cebu is a dynamic economic hub. this evening ’ s theme has three action verbs. individually, the words sound like commands. as a unified phrase, it is a battlecry. “ create. innovate. compete. ” cebu is no stranger to the power of creativity and innovation. because of efficiency and raw talent, the level of craftsmanship and creativity of the cebu furniture industry, for example, allows it to produce high quality and unique custom - built pieces that cater to medium - to high - end markets, selling twice or thrice more furniture than competitors from vietnam and china. to outperform others — businesses must be creative and innovative. but creativity and innovation should not be pursued for their own sakes. ( this is a reminder i have relayed to the bsp and the banking and financial sectors many times ). efforts should be focused and strategic. in the context of business, creation and innovation should be concentrated on, and mindful of, competitive advantage. this brings about strategic competitiveness. the philippines ’ competitive sdvantage allow me to relay data on the philippines ’ positive economic position which enables it to compete strategically in the global market. philippine macroeconomic fundamentals are solid and robust. these support local exporters and entrepreneurs. we have had uninterrupted gdp growth for 75 consecutive quarters ( more than 18 ½ years ). gdp expanded 6 percent annually during the past five years. prospects are favorable and growth is predicted to be between 6. 5 to 7. 5 percent this year and 7. 0 to 8. 0 percent over the