it is a good thing we have ample reserves because this is part of our defense against negative global spillovers. in looking at our external accounts, it is important to go beyond just reserves and quarter - to - quarter inflows. it is [ also ] important to look at the current account. the current account, which is how much we borrow abroad and send abroad, is basically the difference between our investments as a country and our savings as a country. in the graph, the red line is savings and the blue line is investments. until recently, we have been saving more than we have been investing, and it has led to a current account surplus. but there is, as you know, an acute shortage of investments. we have started to ramp up our investments, especially in infrastructure. our savings have not yet caught up with that. that is why, in 2022, we saw current account deficit [ increase ] to 4. 4 percent of gdp [ gross domestic product ]. that is not really a bad thing. with productive investments, what will eventually happen is that gdp growth and savings will outpace investments. this will narrow the gap between savings and investments. eventually, savings will exceed investments, and we will have a current account surplus. whatever we borrowed when we had a deficit, we can repay now that we have a surplus. that is a direction we anticipate for the current account. let me now say something about our banking system. as you can see from the picture, despite the tightening [ in monetary policy ], growth has been robust. we have recovered strongly from one of the world's longest and most stringent lockdowns. we have done so faster than most asian countries. for this, i think, we can thank our banking sector as well as the bsp's emphasis on financial stability. the picture on the left shows you the international standard for capital. that is the blue bar. the banks'actual capital, as shown in the yellow bar on the right, far exceeded what international standards say about the capital that banks need to hold. the bars on the right show the liquidity position of the banks. the blue bar shows the international standard for the liquidity of banks, and the yellow bar shows the actual liquidity that banks hold. this gives us confidence that the policy rate adjustments were done without risking financial stability. 3 / 4 bis - central bankers'speeches let me now turn to digitalization. i think, our digitalization

philosopher aristotle once said “ one swallow does not a summer make. ” from the philippine perspective, we move forward in 2016 with cautious optimism. we are cautious – because we are mindful of the challenges ahead and of the possibility that our operating environment can change so swiftly at a scale we may not have anticipated. yet we are optimistic because we start from a position of strength, having managed to address obstacles we encountered in 2015 and the great financial crisis in 2007 – 2008. at this point, it will be helpful if i give an assessment of 2015 and then move on to 2016. after i complete my narrative, you can make your own judgment on the state of our economy. recalling 2015 2015 brought with it, its own challenges and opportunities. global growth remained uneven, resulting in a divergence in policy responses from major central banks – the us fed finally went ahead with its much - awaited “ lift - off ” and raised interest rates ; china devalued its currency ; while the european central bank provided further stimulus to its economy with interest rate cuts and an expanded bond purchase program. bis central bankers ’ speeches these external headwinds made for some rough sailing for the philippines in 2015 due to higher risk aversion among investors. some capital flowed out particularly in the second half of the year, the philippine stock market took a hit and the peso depreciated. there were similar shifts in financial markets across emerging asia. nevertheless, domestic sources of resilience kept the philippine economy on a steady noninflationary growth. low and stable inflation – 1. 4 % in 2015, the lowest since the bsp adopted the inflation targeting framework in 2002 – continued to encourage investments and business expansion. in the third quarter of 2015, our economy grew at an accelerated pace of 6. 0 percent. this made the philippines one of the fastest - growing economies in asia in the first nine months last year. at the same time, the country ’ s sound, stable and liquid banking system provided solid support to our economy in 2015, with bank lending continuing to grow in double - digit rates, with credit flowing particularly to the productive sectors. and as a result of the continuing cooperation between the bsp and the banking sector to continue to enhance governance and risk management practices of banks, industry profitability improved further with return on equity rising from 9. 67 % in september 2014 to 10. 04 % in september 2015 ; asset quality got even better with gross npl ratio improving to 2. 32