is not primarily because we fear the implications for price stability. we have the tools at our disposal to fulfil our objective. european citizens and business can rest assured that the ecb will continue to maintain price stability over the medium term. this is not what we are worried about. our concern is that if the stability and growth pact is not implemented properly, and if excessive deficits persist and public debt levels remain high or, even worse, increase, there will eventually and inevitably be a cost in terms of lower growth and employment. what should be done? if the stability and growth pact is not working as well as we would like, what can be done about it? what should be done in view of the ecofin council decision of last november? well, first of all, having made the commitments they did last november, france and germany must keep their word. and if they cannot do so, the ecofin council should keep its word and apply the next steps of the excessive deficit procedure. abiding by the commitments made last november would, in my view, go a long way to restoring confidence. we at the ecb think that the decision taken last november was not the appropriate one. france and germany and the ecofin council can prove us wrong. and in this case i for one will be happy if i am proved wrong. beyond this, the question that seems to be on everyone ’ s mind at the moment is whether the recent problems in implementing the rules and procedures of the pact call for the pact itself to be changed. my colleagues in the governing council and i are not convinced that this is either necessary or desirable. the current rules of the pact have been agreed upon by all 15 eu member states, because they make good economic sense. just because you encounter problems here and there when you first try to apply the rules does not mean that you should re - write the rulebook. let me illustrate my views by drawing a comparison with the highway code. we all know that driving at excessive speed is dangerous. so for good reason, governments have introduced speed limits. we also know that speed limits have not eliminated speeding completely. some drivers continue to speed. but this does not mean that you should abolish or revise the speed limits. it means that you still have a job to do in educating drivers about the dangers of speeding and in better enforcing the speed limits. as in the case of fiscal rules, identifying the optimal speed limit under all circumstances is a highly complex

benjamin e diokno : leadership talk - transformation amidst changes and challenges speech by mr benjamin e diokno, governor of bangko sentral ng pilipinas ( bsp, the central bank of the philippines ), at the 76th philippine institute of certified public accountants annual convention, 24 november 2021. * * * members of the philippine institute of certified public accountants led by national president marydith c. miguel, guests, ladies and gentlemen, good afternoon thank you for inviting me to share my thoughts on the topic “ transformation amidst changes and challenges. ” throughout the covid - 19 crisis, the bangko sentral ng pilipinas ( bsp ) has been leading positive transformation for the banking system and the overall economy. in doing so, we observe four principles represented by the acronym “ fire ” — flexibility, inclusivity, responsiveness, and excellence. before i expound on these four principles, let me first briefly discuss latest macroeconomic developments to provide context on the environment banks currently operate in. the economy is well into the recovery process. gross domestic product ( gdp ) grew by 12. 0 percent in the second quarter and 7. 1 percent in the third quarter of this year. the unemployment rate improved from the peak of 17. 6 percent in april last year to 8. 9 percent in september this year. inflation decelerated to 4. 6 percent last october, bringing the average in the first 10 months of this year to 4. 5 percent. while this is above the target band of 2. 0 to 4. 0 percent — driven by supply issues concerning food and energy items — central bank estimates show that inflation will ease toward the midpoint of the target range next year and in 2023. the country ’ s gross international reserves ( gir ) remain hefty at $ 107. 9 billion as of end - october this year, equivalent to 10. 8 months ’ worth of imports. the peso averaged p50. 1 / $ 1 in the third quarter of 2021, depreciating by four percent from the second quarter average of p48. 2 / $ 1. this is not a concern as the country enjoys robust external accounts, and the peso depreciation was driven in part by rising imports of capital goods — a sign of rising investments. the positive macroeconomic developments are in sync with the latest financial sector indicators. as of end - september, the philippine banking system ’ s assets grew year - on - year by 7