good governance archipelago, we benefit from an exchange of ideas, sharing of competencies, and strengthening of linkages. for most, the bsp ’ s functions are esoteric : controlling inflation, effective banking supervision, and ensuring a safe and efficient payments and settlements system. as proof of their successful accomplishment, there are numbers and graphs. there are also awards and international recognition. but these do not drive the island ’ s narration. while we are proud of the figures and commendations, the real story lies in opportunities created and actual filipino lives improved. when the bsp adopted the inflation targeting framework in 2002, it became more effective in upholding a low and stable inflation environment. for the last six years, it has met the inflation target. inflation expectations are well - anchored. economic growth is supported. uncertainty is reduced. on a micro - level, informed decisions on consumption, investment, saving, and production can be made. traders may hedge against risks related to the fluctuating cost of raw materials and finished goods. income equality is promoted as the purchasing power of the poor is protected. because of the country ’ s strong economic fundamentals, there is positive differentiation by global investors. investments are sustained. bis central bankers ’ speeches our solid fundamentals create buffers against uncertainties, preserving macroeconomic gains. credit rating agencies 1 and international financial institutions 2 have recognized the country ’ s inflation performance. growth projections are favorable. last december, moody ’ s raised its rating a notch above minimum investment grade. it cited the government ’ s efforts to sustain relatively low and stable inflation. in 2013, the bsp was named best macroeconomic regulator in the asia pacific region by the asian banker. to thrive in a fluid and interconnected world, the bsp adopts a foreign exchange rate policy, which is essentially market - determined. official action only limits excessive price movements. to achieve financial stability, we pursued progressive and prudent banking reforms. we aligned the regulatory framework to international standards, while maintaining sensitivity to domestic conditions. among others, we adopted basel 3 capital reforms. we set higher risk management and governance standards for our supervised financial institutions. we institutionalized more effective examination and off - site monitoring processes. the industry ’ s risk exposures are better monitored through stress tests of banks ’ balance sheets and stress test limits for real estate exposures. in 2014, the asian banker granted us the “ best conduct of business regulator award. ” and we are happy to report that from 2012 to 2014

bank of japan presents its quarterly economic outlook for summer 1997 bank of japan, quarterly bulletin, august 1997 ( advance summary ). 1. japan ’ s economy continues on a moderate recovery trend. production and income are showing underlying firmness despite the continued reaction to the temporary surge in demand ahead of the consumption tax hike. among final demand items, public - sector investment has been on a decreasing trend, and housing investment has been somewhat lackluster, particularly as a result of the reaction to the rise in demand ahead of the consumption tax hike. on the other hand, net exports have recently increased significantly and business fixed investment has been rising steadily. despite the continued decline in demand which followed the rise ahead of the consumption tax hike, particularly in consumer durables, the recovery trend in personal consumption does not seem to have been hindered. in these circumstances, industrial production has been firm and the growth in employees ’ income has been rising steadily, albeit moderately. price indices were pushed up in april 1997 by the consumption tax hike, but excluding this factor, prices have been stable. both quarter - to - quarter and year - to - year changes in domestic wholesale prices ( adjusted for seasonal electricity rates ) have been near zero, and the year - to - year declines in corporate service prices have narrowed. the year - to - year rises in consumer prices ( nationwide, excluding perishables ) are widening somewhat, albeit by a small margin. changes in commercial land prices have varied by type, and residential land prices have virtually stopped declining. 2. in the financial markets, the overnight call rate ( uncollateralized ) stayed slightly below the official discount rate of 0. 5 per cent. the long - term government bond yield rebounded to near 2. 7 per cent in late may, as market uncertainties about the economic outlook and the japanese financial system gradually subsided after the second half of april. however, it declined to around 2. 2 - 2. 3 per cent. stock prices rose to ¥20, 000 - 21, 000 in may and june 1997, and have recently been fluctuating without showing clear direction. in the foreign exchange market, the yen reached ¥127 to the u. s. dollar in early may, but later appreciated and has recently moved at around ¥113 - 116 to the u. s. dollar. with respect to the fund - raising activities by firms, growth in bank lending continues to be lackluster but fund - raising through the capital market has