shut it down to buy time, to delay the spread of the virus while building the country ’ s health capacity. amid this challenge, the domestic banking system can be harnessed to support economic recovery. specifically, they provide cash flow support to individual clients and micro, small and medium enterprises. banks are also our conduits in the accelerated promotion of digital banking and electronic payments transactions of our countrymen during the pandemic. on this note, our strategy of combatting the covid - 19 pandemic with the help of the banking system is focused on four critical areas. first, to provide sufficient liquidity to support government ’ s efforts of saving lives and livelihoods. second, to maintain the stability of the financial system. third, to ensure the continued delivery of financial services to the public. lastly, to shore up confidence and cushion economic activity. 2 / 4 bis central bankers'speeches in fact, the bsp has injected a total of p1. 5 trillion to the financial system, equivalent to about 7. 6 percent of gross domestic product ( gdp ), as part of its liquidity - easing measures to address the impact of covid - 19 pandemic. at this juncture, allow me to briefly discuss our various regulatory and operational relief measures to assist the bsp supervised financial institutions endure the health crisis as well as to support households and business firms. first, we provided bsfis with regulatory reliefs to enable them to grant equivalent financial relief to their borrowers in the form of more flexible and favorable lending terms, or restructure loan accounts. second, they were given incentives for lending to assist the micro, small and medium enterprises and large enterprises carry on with their business during the covid - 19 crisis, as well as hasten recovery and sustainability of their operations, during the post - crisis period. one of our more innovative incentives is that new loans to msmes, and certain large enterprises that were critically impacted by the pandemic but not part of a conglomerate will now be recognized as forms of alternative compliance with banks ’ reserve requirements, which i ’ ll discuss further in the next slide. third, is the promotion of continued access to financial services through key policies. this includes the relaxation of know - your - customer ( kyc ) requirements, temporary suspension of all fees and charges covering online banking transactions, licensing and fund transfers, operational relief for fx transactions and financial assistance in the form of loans, advances or other credit accommodations granted to bsfi

growth in domestic liquidity the development budget coordinating committee is looking at a real gdp growth rate of 5. 7 percent for 2006, with growth driven by services, industry, and agriculture which stands to benefit from better weather conditions. the main risk we see for domestic demand is high oil prices, which have already taken some of the buoyancy out of consumer spending last year rising oil prices also continue to be the key source of risk to inflation, although the strong peso and the easing of food prices should help balance inflationary risks. while inflation may range from 7. 5 to 8. 2 percent, we see a downward trajectory given expectations of an easing of oil prices from peak levels in 2005 and a short - lived impact of the revised vat on prices of goods and services. market interest rates are also expected to benefit from ample liquidity, improving fiscal performance, and better prospects for our sovereign credit rating at the same time, our external position is likely to continue to benefit from dollar inflows from remittances and investments with healthy inflows, the peso is likely to remain generally stable in the course of the year. challenges and strategies in the months ahead, the task for economic managers will be to strengthen the economy in the short term …. and to preserve the momentum for economic reforms that will sustain growth in the long term. at the bsp, our job will be to be more steadfast in fighting inflation and reforming the financial sector. in the area of banking supervision, our focus will be on reducing the stock of non - performing loans with the help of congress in extending the spv law ; enhancing the prudential regulatory environment of the banking system to align it with international standards and best practices ; strengthening corporate governance standards and market discipline mechanisms ; developing the domestic capital market further ; enhancing the payments system ; and improving the bsp ’ s supervision technology and capacity. in the pipeline are the issuances of the guidelines on the implementation of basel ii accord, and the new financial reporting package in line with the adoption of international accounting standards. while there will be initial friction costs related to the transition, these will strengthen the banking system for the long haul. to speed up the development and deepening of the domestic capital market, the bsp will continue to work with other government agencies and the private sector for the completion of critical market infrastructure to further enhance system integrity and overall market confidence and in response to the need to further enhance financial information critical to investor decisions