- adequate capitalization and low exposure to bad debts, banks are able to help fund the growing investment requirements in the economy. credit growth, which has settled in the double - digit territory over the last few years, has benefited the productive sectors of the economy. this bodes well for sustained growth. robust lending growth has consistently come along maintenance of good quality of loans, reflecting observance of prudent lending standards. we expect lending growth to continue, especially with the bsp ’ s intention to continue slashing the reserve requirement ratio ( rrr ). should the inflation outlook continue to improve, we will further cut the rrr until it reaches single digit by the end of my term in 2023. as you know, we have room and reason to reduce the rrr as it is currently the highest among select peer countries. rrr is a friction cost, and lowering it is consistent with the aim of further enhancing financial intermediation. in the past, the high rrr had served as an important tool to mop up excess liquidity. but now that the bsp, under its amended charter, has the mandate to issue its own debt securities, we can rely less on the rrr for liquidity management. 2 / 5 bis central bankers'speeches with lower rrr, the banking sector can then lend more support to the economy ’ s growth prospects. it is also important to note that economic growth in the philippines is happening not only in the national capital region ( ncr ) but throughout the country. in fact, growth rates of other regions are outpacing that of the ncr. growth in the regions is expected to remain robust, driven in part by infrastructure development across regions. this pattern of growth is consistent with the aim to make economic growth more inclusive. nevertheless, the bsp will continue to adopt measures that will improve the regulatory and operational environment so that banks will be able to support robust and inclusive economic growth. the financial sector can help spur a more inclusive growth through financial inclusion. we have achieved milestones on financial inclusion as far as regulations are concerned. in fact, the philippines is recognized as having one of the best regulatory environments in the world for financial inclusion. however, many municipalities still do not have banks operating in their areas. a big part of the country ’ s adult population still do not use formal channels to save or borrow money. to enhance financial inclusion, the bsp has implemented several initiatives and are further strengthening its efforts. for instance

sabine lautenschlager : cross - border banking since the crisis – lessons for supervisors statement by ms sabine lautenschlager, member of the executive board of the european central bank, at the 10 years vienna initiative - anniversary conference 2019, vienna, 27 march 2019. * * * the crisis has shown that the banking sector is deeply interconnected worldwide, and that a banking crisis can quickly spread from one country to another. it also laid bare a number of weaknesses in the global regulatory framework. but after long and tough negotiations, we agreed on the basel iii framework, which addresses most of the weaknesses found in global regulation. it will help make global financial markets safer by ensuring that global banks and banks with cross - border activities have to comply with a common framework of minimum capital, liquidity and risk management standards. the crisis clearly showed that supervision should not stop at national borders. and it also showed us that cooperation between home and host supervisors is key to understanding the risks banks are exposed to when doing business across borders. in recent years, cooperation between supervisors has increased significantly, on the back of new global and european standards for home / host cooperation. cooperation between supervisors has become natural ; in fact, it has become essential. this cooperation has been institutionalised via supervisory colleges and crisis management groups. standards now apply when information is exchanged between host and home supervisors, and when joint fact findings and assessments are due. and various criteria now apply when supervisors from different countries have to agree on joint action regarding banks. of course, it is easier to cooperate in theory than in practice. and it is easier to cooperate in normal times than in times of crisis. the vienna initiative was an important example of cooperation in crisis times. and with the vienna initiative 2. 0 in particular, we have seen how important it is to provide structures and platforms for home / host cooperation. it is undeniable that, in times of crisis, the interests of home and host supervisors may diverge. but without cooperation, it would be very difficult to maintain financial stability. breaking this kind of prisoner ’ s dilemma requires trust. but trust cannot be built over a few days of talks at the height of a crisis. trust requires us to understand each other ’ s priorities and constraints. and this takes time. in a way, this should be seen as an investment. as a supervisor, you should invest your time in building trust with other authorities. it will pay off. in practice, the fact that this lesson has