recognised that the consequences of higher world prices, such as for energy, on living standards could not be avoided by higher money wages. so wages rose more slowly when employers faced higher national insurance contributions and energy prices than when the costs of imported inputs were falling. second, monetary policy supported a broadly steady path for total money spending – during the decade 1995 - 2004, the growth rate of nominal domestic demand fell within a narrow range of between 5¼ % and 6¼ % in all but one year – so that the new flexibility meant that price rises in some parts of the economy were balanced by price falls elsewhere, leaving inflation overall close to the target. when the prices of some goods fell, such as imports in the late 1990s, people had more disposable income to spend on other goods and services. that pushed up demand in those sectors and encouraged companies to raise prices. conversely, when some prices rose, as with energy prices over the past two years, the resulting squeeze on income available to spend on other goods and services helped to bear down on inflation in those sectors. with steady growth of money spending, a change in relative prices can be consistent with stable inflation overall. monetary policy – a credible commitment to the inflation target and a broadly stable growth of total money spending – was then, and is always, the key to low and stable inflation. that point was made forcefully in a speech in february by the late david walton, whose untimely death in june was a great loss to the monetary policy committee. over the past couple of years our economic performance has not been quite as “ nice ” as in the nice decade, but it was “ not so bad ”. 2 in 2005, output growth slowed to 1. 9 % and inflation rose to 2. 5 %. back in 1976, to describe this as “ not so bad ” would have been the understatement of the year. it followed a period of rather strong nominal domestic demand growth which, by placing pressure on the supply capacity of the economy, accounted for some of the subsequent pickup in inflation. at the same time, sharp rises in the prices of oil and other commodities reduced the income households had available to spend on more discretionary items and put downward pressure on those prices. not surprisingly, that loss of spending power was one of the contributory factors to the standstill in consumer spending in the second quarter of last year. but since then consumer spending and output growth in the economy have picked up, and in the first

by the green force working clusters. the financial sector forum will likewise facilitate alignment and implementation of the common standards across the financial sector. with these developments, we believe that banks are better equipped in scaling up sustainable or green finance and in promoting the low carbon transition financing. but we recognize that there are first mover banks. in fact, of 15 issuers of green, social and sustainability bonds in the country, seven are banks. since 2017, they have issued around usd 2. 9 billion worth of sustainable bonds. during the pandemic, two banks have issued social bonds totaling approximately p29 billion to finance the needs of eligible micro, small and medium enterprises. at the regional level, sustainable bond markets in asean + 3 continued to expand to usd 415. 6 billion as of end - december 2021 with green bonds dominating the market at usd 294. 0 billion. meanwhile, the country is also seen to issue sovereign bond in the international sustainable bond market. the department of finance recently launched the sustainable finance framework. this sets out how the national government intends to raise green, social or sustainability bonds, loans and other debt instruments in the global capital markets. this information presents clear opportunity for banks and investors to build on the strong momentum in the issuance of green and sustainable bonds both at the local and regional markets. achieving the nationally determined contributions and the sustainable development goals also present an opportunity for sustainable finance. financial institutions can introduce new and innovative sustainable financial instruments that are responsive to their clients ’ needs and at the same time contribute to our carbon emission reduction targets of 75 percent by 2030. these sustainable financial products may also be extended to fund the post - pandemic recovery of the micro, small and medium enterprises and agricultural sectors which were greatly affected by the pandemic. meanwhile, companies that engage in sustainable projects or activities may benefit from obtaining funding at potentially reduced competitive costs. this may be possible through the concerted efforts of both public and private sectors to develop a pipeline of green investments and to incentivize sustainable finance supplemented with blended finance. with the philippines being vulnerable to typhoons and climate change related risks due to its geographical location, “ green recovery ” approach is the ideal to strike the right balance in implementing economic strategies and in building climate resilience. we are confident that our sustainability efforts complemented by favorable macroeconomic fundamentals and sound banking system will all tie in as we move forward to a more stable, resilient, and inclusive philippine financial system. in closing,