particular. the philippine economy continued to expand, with 2015 inflation settling at 1. 4 %, our lowest in 20 years. our external position is robust and offers buffers against possible external shocks, with a balance of payments surplus, healthy level of gross international reserves that could pay for over 10 months worth of imports of goods and services, and remittances through banks from overseas filipinos that continue to grow year after year. indeed, for our banks, 2015 was a year that tested their resilience but they came out of it stronger and more stable. continuity amid change now, we start 2016 from a position of strength. this is a good place to start. we have done our homework. bis central bankers ’ speeches we should be able to manage external risks that may arise from continuing volatility and possible contagion and closer to home avoid excessive leverage and imprudent practices. in particular, we anticipate that 2016 will continue to test the resilience of our banking system, with market volatility that can heighten market liquidity and credit risks. we therefore need to stay firmly committed to the pursuit of financial stability as the overarching prudential norm. it is a public good that benefits us all and gives us the space to pursue growth and profit opportunities. moving forward, there are game changers we have to contend with. among others, regional integration will happen. this means that we have to be ready for the challenges that are sure to come with it and more important, to ensure that we reap the benefits we stand to gain from integration. certainly, the bsp will actively pursue bilateral arrangements to designate qualified asean banks or qabs under the asean banking integration framework but much work must be done in parallel on payments and settlements, market infrastructure and capital market development. to further enhance the effectiveness of monetary policy, we shall have the interest rate corridor in the next few months. aside from enabling smoother market rate adjustments relative to bsp policy rates, we see that the irc will contribute to having more active and efficient financial markets. 1 and in support of the national goal of inclusive growth, we will pursue with 12 other government agencies the implementation of our national strategy for financial inclusion. our objective is to make our financial system more inclusive, responsive and more accessible to the micro, small and medium enterprises, as well as to the underbanked and the unbanked. there is room for banks and other institutions to participate in this

help our internal juices flow and rejuvenate our body. you may ask, why am i mentioning tea from japan, south korea, taiwan and singapore? well, it is because the philippine banking community is going to be even more dynamic with the entry of six banks from these jurisdictions. like the tea that is good for our body, the entry of these six banks to the philippines could catalyse further innovations in our banking sector. we expect more to come in. what else do we see in 2016? the consensus forecast for 2016 is for modest and uneven global economic growth. certainly, we are not immune to adverse external developments. we will have to deal with their ramifications, the bumps on the road, so to speak. nonetheless, we believe that our sources of resilience will sustain our growth momentum. private consumption continues to be buoyant while the services and industry outputs remain firm. and government spending is expected to further increase in line with continuing efforts to address issues on spending bottlenecks, especially for public infrastructure. thus, while 2016 will test the resilience of our banking system, we can rely on the quality of our preparations to manage evolving risks from volatility as market tide shifts. this is also evident even to external analysts. fitch ratings has given the philippine banking system a positive rating outlook for 20162, the only one for asia - pacific. among others, fitch noted the “ generally healthy profile of local lenders, sound operating environment and the philippines ’ s strong economic fundamentals. ” congratulations to our philippine banks! final thoughts ladies and gentlemen. we will continue to pursue our reform agenda to ensure stability for the long - term. we are unfazed by the challenges that will come our way because we are prepared, because we have been doing our homework. and we embrace continuing reforms because that is the key to stability and to more opportunities moving forward. finally, we at the bangko sentral ng pilipinas thank the members of the banking community for your active support and cooperation, in implementing policies and programs in pursuit of our mandate to provide stability to prices and the banking sector – stability that sustains economic growth for the long - term ; stability that promotes inclusive growth. at this point, may i request the other members of the monetary board to join me onstage. secretary cesar purisima, freddie antonio, phillip medalla, andy suratos, jun de zuniga and val araneta. together, let