of risks is not a negative thing. risks will always be present. the good news is that the present reality imbibes confidence in us. the philippine economy is strong. we continue to deliver gains amidst monetary policy divergence and uncertainty. our macroeconomic fundamentals are robust and sound. further, our financial system is more sophisticated, disciplined, and resilient. real gdp has registered positive growth for 76 consecutive quarters, covering a span of 19 years since 1999! in 2017, gdp grew by 6. 7 percent, making the philippines one of asia ’ s fastest and most consistently growing economies. this growth performance is in line with the economy ’ s potential output, currently estimated at around 6. 0 - 7. 0 percent. the improvement in potential output reflects declining incremental capital - output ratio, rising total factor productivity, and improving workforce capacity. as we pour in more investments in physical infrastructure under build, build, build, and more soft investments in our young population to provide better health, high quality education, and skills development, we can expect further accelerated growth in potential output. these investments are sustainable because they are supported by a prudent fiscal position characterized by lower national government debt - to - gdp ratio of around 42 percent and additional revenues to be generated from the recent tax reform ( train ). there is thus strong basis for asserting that the economy can sustain its growth momentum. likewise, higher output capacity should allay concerns of potential overheating. the country ’ s external position is manageable despite global headwinds. the country ’ s overall balance of payments ( bop ) for the year 2017 posted a deficit of us $ 863 million. this is just 0. 3 % of gdp. the underlying widening of the trade - in - goods gap stems from rising imports of 2 / 5 bis central bankers'speeches goods that support domestic capital formation and production. this development is consistent with the country ’ s growth narrative. one should expect that the economy ’ s expansion will be accompanied by stronger demand for imports. over time, investment led economic activities will support needed infrastructure development, raise domestic competitiveness, increase goods exports, and alleviate the trade gap. the sustained resilience of foreign direct investments, overseas filipino ( of ) remittances, and business process outsourcing ( bpo ) receipts provide additional buffers to the domestic economy. external debt metrics have also improved as reflected in the continued decline in the external debt - to - gdp ratio to around

bets to anyone. mindful of the potential build - up of systemic vulnerabilities, we have also deployed and continue to develop various macroprudential measures. currently, we have exposure drafts on the countercyclical capital buffer, the debt - to - earnings borrowers test ( debt ) that is akin to the existing real estate stress test ( rest ), and the borrowers interconnectedness index. furthermore, we continue to enhance our surveillance tools. we are also exploring new technologies such as big data analytics to further improve our surveillance. finally, we are reinforcing our model - based assessments with qualitative and expert judgments on current macroeconomic and financial conditions. other game - changing financial sector reforms part of our transformative policy reform agenda is to accelerate financial market development. we give particular focus to foreign exchange ( fx ) and local currency debt markets. we envision a more balanced financial ecosystem where the banking system is complemented by a deep and liquid debt market. our bold financial sector reform agenda includes ambitious fx reforms toward a more organized fx market that supports a flexible and market - determined exchange rate. this includes further liberalizing fx rules to reduce the cost of doing business and to improve data capture. 4 / 5 bis central bankers'speeches in addition, we will enhance governance and oversight over the fx markets, including the usd / php market. this will further improve transparency, price discovery, and market conduct. we are currently drafting the governance framework for fx markets with a set of general principles that shall apply not only to the existing usd / php market, but also to any third currency / php market that may be established in the future. we have initiated engagement with the industry so that existing trading markets can conform to the new framework within a mutually agreed timeframe. as you know, the bsp is also collaborating closely with other government agencies and industry associations such as mart, to implement the philippine local currency debt market development roadmap. immediate focus is on deepening liquidity, enhancing price discovery and strengthening regulatory oversight. recently, the bureau of the treasury released the implementing guidelines for the enhanced government securities eligible dealers ( gsed ) program outlining incentives and accountability of market - makers. we count on your continued support in this endeavour, including providing effective two - way quotes to support market liquidity. even as we move towards further liberalization and increased market incentives, we likewise expect responsible behavior among market players, by adhering to market standards and rules in order to