lowest since 2009. for 2015, therefore, we expect inflation would be well - within the target range. this should provide the bsp the flexibility to keep policy rates at low and stable levels in support of economic growth. on the exchange rate, another metric the bsp is always asked about, i can tell you that our policy remains the same. this means we will allow the exchange rate to be essentially determined by market forces. as i mentioned earlier, we expect some volatility in the market in the near - term because of the growing consensus for a strong us dollar. but as in previous episodes of volatility and bis central bankers ’ speeches portfolio outflows, there will be core investors who will remain invested in the philippines because of our positive growth prospects and sound fundamentals. during these periods of volatility, you can expect the bsp to maintain a presence in the forex market to keep the movements aligned with fundamentals and with those of our peers in the region. aside from working on monetary stability, the bsp will continue its banking reform agenda appropriate to our own operating environment. these reforms will impact on the way banks do business with you, but these are calibrated to enhance the protection of bank clients and to ensure the stability of the financial and the economic system as a whole. conclusion ladies and gentlemen of the rotary club of manila, whatever the philippines has achieved in the past years is a result of close coordination between the public sector and the private sector. as the monetary policymaker, the bsp will continue to promote an enabling environment for business and develop a more inclusive financial system that supports sustained and inclusive growth. you will be happy to know therefore that from 2009 to 2013, the philippines was consistently ranked as the best in the world in terms of the regulatory environment for microfinance. in 2014, the economist intelligence unit ( eiu ) named the philippines as the top country in east and south asia and the third in the world, with the most conducive environment for financial inclusion. but beyond these recognitions, what we value is the impact of our gains in improving the lives of millions of filipinos through financial inclusion, and particularly through microfinance. nevertheless, we are mindful that there are so many more that we need to reach out to. this is where successful professionals such as yourselves and organizations such as the rotary club of manila can help make a difference. the actual use of financial resources to create jobs and generate production for

nestor a espenilla, jr : opening remarks for the q2 2018 bsp inflation report press briefing opening remarks by mr nestor a espenilla, jr, governor of bangko sentral ng pilipinas ( bsp, the central bank of the philippines ), for the q2 2018 bsp inflation report press briefing, manila, 20 july 2018. * * * a pleasant morning to everyone. welcome to the press conference on the bsp ’ s inflation report for the second quarter of 2018. today, we wish to discuss with you the developments and the analysis that underpinned the bsp ’ s monetary policy decisions during the second quarter of the year. our objective is to enable market participants and the general public to better understand the underlying developments as well as the reasoning and analysis behind the bsp ’ s policy actions. we begin with the global economic environment. the overall prospects for global output growth have improved since our last briefing in april, owing to faster rates of expansion in key economies. in particular, economic activity in advanced economies has gained further traction. consequently, the unwinding of accommodative monetary policy in the us and other advanced economies will likely continue and drive capital flows away from emerging economies, including the philippines. meanwhile, global inflation remains elevated in q2 2018 amid geopolitical tensions between the united states and some key oil producers. nevertheless, plans by major producers like saudi arabia and russia to boost production, coupled with higher output coming from the us, could exert downward pressure on oil prices. in the philippines, we continue to feel the weight of supply - side price pressures, as reflected in the uptick in the prices of certain food items and domestic petroleum products. average headline inflation using the new 2012 - based consumer price index ( cpi ) series rose to 4. 8 percent during the quarter from 3. 8 percent a quarter ago, bringing the year - to - date average to 4. 3 percent. this is higher than the upper end of the national government ’ s target range of 2 - 4 percent for the year. similarly, core inflation increased to 3. 8 percent in q2 2018 higher than the quarter - and year - ago rates of 3. 0 percent and 2. 5 percent, respectively. moreover, inflation expectations of private sector economists also increased during the quarter, with analysts attributing their higher projections to volatile global oil prices, a weaker peso, and the transitory effects of recent tax measures on the prices