at manageable levels is essential to ensuring sustainable economic growth. we will maintain our policy of a market - determined exchange rate, with official action only to keep volatilities at bay. we will stick to the policies that have allowed us to sustain a strong external position. we will continue to review our banking reform agenda. the banking system strength that we have seen thus far has been made possible by the reforms that we have put in place. we will continue to enhance risk management standards, improve corporate governance and accelerate compliance with basel 2 principles. the recent events in the financial markets highlight the critical importance of efficient price discovery, transparency and investor protection. in line with this, our issuance of regulations aimed at further broadening the array of financial products available in the market will continue to include a review of existing rules to ensure that appropriate risk disclosure and client suitability procedures are in place for new risk - taking activities. in addition, the bsp will continue to work together with the private sector and other government agencies to further enhance both the infrastructure and the regulatory framework for capital market transactions to further promote efficiency in trading, settlement and delivery of government securities. finally, we will pursue our legislative agenda. as you must be aware, the credit information system act and the personal equity and retirement account act have both recently been approved. these are two very important pieces of legislation, particularly as we face the challenges brought about the current financial turmoil. the cisa will help address the lack of comprehensive and credible credit - related information. this will in turn improve access to credit and reduce its cost. pera, on the other hand, is expected to promote voluntary savings and therewith provide a new base for stepping up capital market development. it is also expected to be complementary to our public pension system. the bsp will continue to work with congress on key legislation that would further enhance protection for investors, improve bsp ’ s oversight capabilities and minimize costs of resolutions. concluding remarks ladies and gentlemen, the challenges that we face are enormous. although much has already been revealed in terms of the problem areas of the global financial market turmoil, we are very much aware that more could be forthcoming. i said earlier, “ the rules of the game are changing ”. fortunately, at the uaap, the rules have not changed, the best still prevails. i can almost hear some of you say underneath your breaths – if indeed that is the case, then we should “ throw the playbook out the window.

amando m tetangco, jr : recent market developments – impact on the philippine banking and finance sector speech by mr amando m tetangco, jr, governor of the central bank of the philippines ( bangko sentral ng pilipinas ), at the joint membership meeting of mart, toap, aci and ihap, makati city, 3 october 2008. * * * distinguished officers and members of the money market association of the philippines ( mart ), trust officers association of the philippines ( toap ), association cambiste internationale ( aci ) philippines, the financial markets association, investment house association of the philippines ( ihap ), esteemed guests, ladies and gentlemen, good evening. thank you for inviting me to be your guest speaker at tonight ’ s joint general membership meeting. it ’ s always good to engage the prime movers of the country ’ s financial markets in an open discussion such as this. but especially during these times of great financial turmoil in major markets overseas. i would certainly welcome the questions and your comments during the open forum after my brief talk. as you are well aware, the bsp ’ s approach to supervision and reform has always been consultative. about the same time last year, if you recall, i was also your guest speaker at your general membership meeting. at that time, i spoke about the increase in global liquidity and the temptations that it introduced. i alluded to the changing nature of financial risk and how in this era of financial globalization, risks have transcended national borders. i also said that the international rules of the game are changing. ah... the time we live in is indeed interesting, isn ’ t it? the rules of the game are further evolving. this time around, there seems to be a crunch in global dollar liquidity as the us market has rapidly de - leveraged. and events are showing that the magnitude of financial risks that have crossed national borders has been beyond most market participants ’ and regulators ’ expectations. stunningly, we are witnessing rapid turnover in some of the marquee names in the global financial stage. in fact, the market developments are moving so fast that the observations that i will be sharing with you tonight are not the same as those that i would have shared with you, had i delivered my talk on tuesday as was originally scheduled. but i want to assure all of you here tonight, that my overarching message remains the same –