benjamin e diokno : prospects for a productive partnership speech by mr benjamin e diokno, governor of bangko sentral ng pilipinas ( bsp, the central bank of the philippines ), at the fund managers association of the philippines, inc. general membership meeting, manila, 2 february 2022. * * * to the directors, officers, and members of the fund managers association of the philippines, ladies and gentlemen, good afternoon. it has been almost a year since we came together for the 13th annual fmap convention. i commend the incumbent officers of the fmap, under the leadership of mr. j vincent daffon, for ably steering the industry through the past year. today, i would like to share our perspective on recent economic developments, as well as the state of the banking and trust industries. i will also highlight the bangko sentral ’ s priority regulatory initiatives and identify potential areas of cooperation with the fmap membership. the economy has staged a strong turnaround, growing by 5. 6 percent in 2021. the full - year growth exceeded the government ’ s forecast of 5 to 5. 5 percent. the collective efforts of both public and private sectors proved crucial in ensuring a strong recovery. inflation remains manageable. while headline inflation averaged 4. 5 percent in 2021, there was a noted slowdown in price increases toward the end of the year. inflation returned to within - target range in december at 3. 6 percent. this was aligned with the bsp ’ s projections that inflation will ease toward the midpoint of the target range of 2 to 4 percent this year and in 2023. the country ’ s full - year balance of payments registered a surplus of 1. 35 billion us dollars. this was largely composed of inflows from personal remittances, trade in services, net foreign borrowings by the national government, and foreign direct investments. consequently, gross international reserves stood at 108. 9 billion us dollars as of end - 2021. this represents 10. 3 months ’ worth of import cover, way more than the three - month standard buffer to be considered adequate. domestic liquidity situation continues to reflect the decisive measures taken by the bsp over the past two years to boost liquidity in the financial system. m3, a broad measure of the economy ’ s money supply, expanded by 8. 3 percent to 14. 8 trillion pesos in november 2021. domestic claims grew in line with sustained borrowings by the

provided with the necessary information for them to adequately assess fund performance. as we actively move towards a more digital society, i call on the fmap and its memberinstitutions to embark on and accelerate your own digital transformation journeys. digitalization can reduce distribution costs and make financial transactions faster and more convenient. financial institutions can also employ digital means to serve several clients simultaneously, thus expanding reach. the bsp has issued the sustainable finance framework, which advocates for the integration of sustainability or “ environmental, social, and governance, ” or esg, principles into the operations of supervised institutions. while the formal framework is specifically geared toward banks, we strongly encourage fund managers to consider environmental and social risks in your operations as well. esg investing is a principles - based strategy that can provide long - term favorable financial 2 / 3 bis central bankers'speeches returns. i invite the members of the fmap to adopt esg principles in your product offerings and investment strategies. some fund managers already offer esg funds, with three related uitfs currently available in the domestic market. these had an aggregate aum of 633. 8 million pesos as of september 2021. there are several more esg funds under development. given the strong value proposition of esg - related financial products, the bsp expects fund managers to be diligent in ensuring that your chosen investment outlets adhere to the esg investment standards. this entails sufficient evaluation of the issuers ’ sustainability - related commitments. moreover, funds that are marketed as esg products should have adequate disclosure on sustainability goals and impact. as responsible actors in the sustainable finance space, your promotion of investor protection is of the utmost importance. in closing, let me extend my well wishes to the new officers of the fmap. may you live up to the confidence placed in you by the membership. as the bsp continues to enhance the regulatory framework, i count on the fmap and its leadership to be effective partners in fostering increasing digitalization and sustainable finance. together, we can achieve more inclusive and sustainable financial markets! thank you and mabuhay tayong lahat! 3 / 3 bis central bankers'speeches