international trade, especially with the accession of china in the world trade organization ; technological innovation ; trade and financial market integration ; demographic transition ; structural reforms in labor and product markets that led to greater competition and lesser price rigidities ; and more resilient policy frameworks in some emerging market and developing economies — particularly the successful adoption of inflation targeting as well as the more effective and transparent exchange rate, and monetary and fiscal policy frameworks ( world bank, 2019 ). 3 for central bankers, understanding inflation dynamics in relation to other economic variables is crucial. most, if not all, central bankers will agree with me that controlling infla¬tion is a demanding task. yes, the central bank can influence inflation by tightening and easing monetary policy. 1 / 3 bis central bankers'speeches however, the transmission process involves long and variable lags and a degree of uncertainty amid the continuously evolving structure of an economy. add to this is the increasing influence of global and regional factors on domestic inflation. amid these challenges, central banks need to adopt a robust communication strategy to effectively anchor inflation expectations. case in point, the philippines ’ headline inflation decelerated from an average of 15. 1 percent in the 1980s to 9. 7 percent in the 1990s. this slowed further to 3. 8 percent from 2002 to 2018, when the country adopted the inflation targeting framework. the implementation of the inflation targeting framework in the last 16 years has enabled the bsp to manage and keep inflation within manageable bounds. this provided support to greater economic activity, despite international and domestic shocks. moreover, the improved transparency, greater accountability and more effective communication, resulting from the implementation of inflation targeting, have enhanced the bsp ’ s credibility. this led to the continued anchoring of market inflation expectations to monetary policy decisions. however, in the first few years after the global crisis, the bsp experienced pressure in its monetary operations as short - term market interest rates diverged from the bsp ’ s policy rate. this was mainly due to strong capital inflows arising from the highly accommodative monetary policies, the extraordinary liquidity support of central banks in advanced economies, the steady stream of remittances from overseas filipinos, and revenues from business process outsourcing ( bpo ). to address this divergence, the bsp launched the interest rate corridor ( irc ) system in june 2016 to enhance the transmission of monetary policy by guiding money market interest rates towards our policy rate. to date,

some more substantive questions as to whether we need to maintain the currently existing arrangements and, if so, in what form. we expect to complete the consultation on those questions and reach conclusions later in the year. bis central bankers ’ speeches the fourth issue on which we are currently consulting is retail payments system resilience. much of the work of the payments system board over the years has been in regulation and oversight of what we might call self - contained systems : things like a credit card network, or a clearing and settlement facility. but the board ’ s remit extends more broadly to the efficiency and stability of the payments system as a whole. on any common sense reading, the payments system encompasses the capacity of person a to make a payment to person b when they bank with different banks. the ability of the system as a whole to deliver that basic service, dependably and efficiently, clearly comes under the payments system board ’ s overall policy mandate. that is why it is appropriate for the board to be conducting the innovation review that i ’ ve just outlined. it relates to the efficiency of the system as a whole. it is also why it is appropriate for the board to take an interest in the operational resilience of individual payments service providers. in recent years there have been a number of high - profile outages affecting the availability of services to significant numbers of customers. obviously individual banks have a strong incentive to minimise the risk of these sorts of incidents. it affects their own reputation when something goes wrong and it impairs their ability to meet the needs of their customers. but there is also a system - wide dimension to these problems. all participants in the system, and all users of payments services, have an interest in high standards being maintained across the system as a whole, not just their own component of it. when bank a ’ s systems go down, customers of all the other banks are affected, because their capacity to exchange payments with customers of that bank is impaired. for some time the reserve bank has been monitoring significant retail payment outages, and following up with the relevant banks as to diagnosis and appropriate remedial actions. so in a sense, a role for the rba in this area is not new. what we are now proposing is to formalise that role in two ways. first, we have announced that we will be putting in place a more systematic reporting regime for retail outages. and second, we have begun a consultation process with the banks as to whether further