room to keep its policy rates steady to provide a further anchor for stability. a second potential source of vulnerability are shifts in chinese economic policies – 1 ) from a growth model that relies on exports and fixed investments to one which is driven by domestic demand, and 2 ) to a more market - oriented ( and weaker ) rmb. early expectations were that the shift to domestic demand would result in significant slowing in chinese growth, which could dampen exports of its trading partners, such as the philippines. more recent forecasts, however, show a somewhat less dire outlook on china due to fiscal and monetary support from the authorities, easing risks of knock - on effects on trading partners and demand for international commodity prices. on the other hand, the policy of a weaker rmb is not expected to lead to stronger competition against our exports because we have a relatively low degree of export similarity with china. 1 should the policies of the chinese authorities indeed bring about more sustainable growth, this should be overall positive for us as it reduces global tail risks. a third risk is brexit. the direct impact to us of a slowdown in the uk would be minimal, given that our exports to the uk account for only 0. 8 pct. of total exports. it is the possibility of second round effects on the eu, however, that is more concerning because exports to eu account for 11. 5 percent of total exports. we therefore need to remain watchful of developments in the uk, particularly during the transition to “ exit. ” on the domestic front, we have to contend with natural calamities. while no one can fully prepare for the wrath of nature, the country has put in place policies that will help ensure we have adequate supply of staple foods, particularly rice. in short, ladies and gentlemen, the philippines is not immune to risks but our view is that these risks right now are manageable. the balance – short vs. long - term dynamics on balance, the philippines continues to forge an economic growth story that puts emphasis not only on strength but also on long - term stability and resilience. the fact that the philippines has just entered the “ demographic window ”, in contrast to the aging population of some neighboring economies, undergirds our long - term resilience. we have a young and vibrant population that is both a steady employment and consumer base, that opens up a lot of possibilities for investment. many industries are already burgeoning and seizing the opportunities the demographics present. there

is fiscal space to pursue infrastructure investments geared towards increasing the productive capacity of the economy. and the new administration has promised to ramp up infrastructure spending. on the part of the bsp, we will continue to be steadfast in delivering on our mandates of maintaining price and financial stability in the economy, thereby serving as the wind at the back of our stakeholders, including investors like you. based on the unctad ’ s export similarity index. bis central bankers ’ speeches the philippines presents excellent relative value ladies and gentlemen, the philippines means business. while the challenges to the investment environment appear formidable, our collective vigilance and prudence will help us achieve our objectives of sustainable growth, as well as stability. i trust that the bsp can further engage you in pursuing the economic agenda of the philippines. at the top of my remarks, i said investing is all about relative values. i hope that in the time that had been given to me, i have been able to show you that the philippines presents excellent relative value, an investment choice that will allow you to achieve your target risk / return and more. thank you very much and i wish everyone a productive forum. bis central bankers ’ speeches