rates so low in the first place? this is in some part due to the expansionary monetary policy. however, the main reason is that for some time saving has been increasing worldwide, with comparatively little investment being made. the high saving rate is largely attributable to demographics. the dearth of investment is due, among other things, to low productivity gains. both these factors have been heightened by the prevailing uncertainty since the onset of the financial crisis. if there is more saving and less investment, the interest rate at which the economy is in equilibrium falls. switzerland cannot distance itself from this global development. central banks set their policy rates relative to this equilibrium interest rate. to have an expansionary effect, a policy rate must be lower than the equilibrium interest rate. and if the latter is very low, it can be that the policy rate has to be lowered below zero. unusual though they may be, ladies and gentlemen, negative interest rates are nonetheless necessary in the current situation if we are to fulfil our mandate against the backdrop of low interest rates worldwide. at the same time, low interest rates do give rise to certain challenges. negative interest therefore also attracts criticism. that said, we are convinced that the benefits clearly hold sway. our assessment centres on the fact that we take an overall view, and seek to serve the interests of the country as a whole. from the perspective of savers and pension funds, the present situation with low interest income is, of course, difficult. you might think that the snb could simply remedy this. but let us assume that we were to raise the snb policy rate to zero in the current situation. the economy would cool down dramatically, inflation would fall well into negative territory, and unemployment would rise. in such an environment, there would be scarcely any increase in longer - term interest rates. furthermore, we would probably soon have to lower our policy rate again given the economic slowdown and lower inflation. hence any gains in income for savers and pension funds would not be sustainable. from the banks ’ perspective, negative interest rate payments to the snb are a cost factor. we are aware of the burden this represents. that is why in september we adjusted our calculation of the exemption thresholds in such a way that the payments made by the banking system have nearly halved. we do not burden the banking system any more than is necessary for us to be able to steer short - term money market rates. ladies and gentlemen, we monitor the

amando m tetangco, jr : continuing growth amidst recurrent risks and uncertainty speech by mr amando m tetangco, jr, governor of bangko sentral ng pilipinas ( bsp, the central bank of the philippines ), at the joint meeting of the rotary club of manila and the rotary club of makati - forbes park, manila, 9 january 2014. * * * rotary club of manila ( rcm ) president rudy bediones, rotary club of forbes park ( rcfp ) president ruben torres, other officers and members of rcm and rcfp, ladies and gentlemen, good afternoon. thank you for the invitation to be part of the joint meeting of the rotary club of manila and the rotary club of forbes park. it ’ s always a privilege to be included in your new year tradition and your celebration of the rotary awareness month, which i understand is commemorated in all rotary clubs across the globe. today isn ’ t really the first thursday of the year, which is when you normally invite me to speak. but january 2 would have been too close to new year ’ s day, and most of you would still have been in the holiday mood. today, i think everyone is on rev mode and ready to tackle the challenges of 2014. quite a few things happened in 2013 that have elevated the potential challenges of 2014. of these, the one most felt by the country is the trilogy of natural and man - made events – the earthquake in bohol and cebu, the armed conflict in zamboanga and from yolanda – which we experienced in the second half of 2013. while these three events literally changed the landscape of the country, i think these events also, in the process, showed the best in the filipino – our resilience and how we are at our very best when we work together. in this spirit of working together, the bsp also did its part to help ease the impact of yolanda by putting in place regulatory relief for banks in the affected areas, so they could extend the same to their customers. among others, the temporary relief measures include the following : for all banks allowing banks to provide financial assistance to their officers and employees who were affected by the calamity including those types of assistance that may not be within the scope of the existing bsp - approved fringe benefits program. for thrift banks / rural banks / cooperative banks : excluding existing loans of borrowers in affected areas from the computation of past due ratios provided these