##tionality ; gradualism and flexibility in the conduct of monetary policy. in that context, financial markets are currently considering that the rise in interest rates might start in the near future, with a first 25 bps hike almost fully factored in ( 90 % ) as of next july, followed by two others by the end of this year. we will see whether these expectations, which are very volatile, will be vindicated by the actual decisions of the governing council as they will remain data driven and will reflect their assessment of the outlook. however, i believe it is fair and safe to say that the interest rates environment is likely to change after a long period of very low interest rates. as a supervisor, the current downside risks to growth and upside risks to inflation, and the associated perspective of a normalization of monetary policy of the euro area, make it all the more relevant to maintain credit and market risk management of banks, including exposures to vulnerable sectors, to leverage finance and to shocks in interest rates and credit spreads, a top ssm supervisory priority. 2. financial stability situation : the risks associated with indirect exposures 1 / 4 bis central bankers'speeches normalization of monetary policy will certainly come with a rise in interest rates. an orderly rise in interest rates as well as the direct exposures, which are small and concentrated, of euro - area financial intermediaries to ukraine and russia, are not likely to threaten financial stability. through these direct exposures, the financial stability impact of the war has been well contained so far. however, the outlook is uncertain as vulnerabilities associated in particular with markets underpricing of risk, nfc high level of debt and exposure to cyber - attacks may unravel through indirect exposures and amplification mechanisms. particular attention should be paid to abrupt repricing moves in risky asset prices, in the wake of rising interest rates. this situation could put some non - bank financial actors in difficulty, especially the ones using leverage, as illustrated by the archegos ’ default at the end of march 2021. likewise, given the role played by russia and ukraine in the supply of energy and more widely some commodities, rising prices and volatility in commodities markets have led to a major increase in the magnitude of margin calls for derivatives, in particular for energy and agricultural products. such margin calls have generated liquidity strains for commodity market participants, which require strong vigilance notably to ensure that any possible default should remain idiosyn

. there are two interoperable clearing houses in the country - - pesonet and instapay. as of march 31, 2022, participating banks and electronic money issuers registered with pesonet stood at 96, while that with instapay totaled 66. likewise, the digital payment streams of the national qr code standard, or qr ph, has expanded to cover person - to - merchant and person - to - person payments. we are also broadening the use cases for three digital payment streams this year. first is the interoperable bills pay facility, which will address the existing fragmented bills payment mechanism. second is the request to pay facility, which will empower payees to initiate collections of nonrecurring receivables. third is the direct debit, which will allow customers to better manage recurring payments. we have also issued the open finance and digital banking frameworks to accelerate digital transformation and financial inclusion. the open finance framework promotes consent - driven data portability, interoperability, and collaborative partnerships among entities that adhere to the same standards of data security and privacy. the digital banking framework provides the regulatory guidelines for setting up and operating a digital bank in the country. in line with our digital transformation roadmap, the bsp has issued licenses to six purely digital banks. the bsp, or the central bank, has also commenced initiatives in the digitalization of offshore payments. we are prioritizing the establishment of interoperable cross - border real - time retail payment systems among asean member states. with digitalization and financial technology re - shaping the landscape of the philippine banking system, the central bank stands ready to reform, innovate, and transform. we do so by providing an enabling regulatory environment to keep pace with the evolving developments in the financial system and to prepare the country as it faces the challenges of the future. moving forward, i see these wide - ranging reforms ultimately creating tangible economic benefits to the filipino public, as the central bank remains committed to promoting price stability and a resilient, responsive, and inclusive financial system. i ’ ll stop here. thank you.