amando m tetangco, jr : bsp @ 16 – riding out the winds of change and weathering the turbulence speech by mr amando m tetangco, jr, governor of the central bank of the philippines ( bangko sentral ng pilipinas ), at the 16th anniversary of the central bank of the philippines, manila, 3 july 2009. * * * magandang, magandang umaga po sa inyong lahat! fellow central bankers there is every reason to celebrate and to be happy today! today, we mark the convergence of two important events : the 16th anniversary of the bangko sentral ng pilipinas and the 60th year of central banking in the philippines. at sixteen, the bangko sentral ng pilipinas is a relatively young institution ; but its foundation runs deep. that is because central banking, as a function directly linked with the development of our economy and our nation, marks its 60th year in 2009. and so, today, in celebrating our 16th year as bangko sentral ng pilipinas, we also pay homage to six decades of central banking as well as to the men and women who served our people and our country as central bankers. this is the reason why our celebration has for its theme : " ako at ang bangko sentral : noon, ngayon, at bukas. " my understanding from managing director pete tordilla, the chairman of our 16th anniversary celebration, is that almost 500 bspers are involved in the exciting presentations this morning! marami talagang showbiz at magaling dito sa bangko sentral. fellow central bankers, palakpakan po nating muli ang magagaling nating performers and the creative team behind these presentations on 60 years of central banking! salamat sa inyo. you really brought back old memories! parang kaylan lang ano! of course, special occasions such as this are not an excuse to miss our deadlines. as central bankers, we know that even as we complete tough assignments in an excellent manner, there are always many more programs that we need to work on, asap! thus, we sometimes miss the opportunity to say thank you, as we immediately move on the next assignment. in fact, one of our favorite phrases here at the bangko sentral is moving forward! tama ba?! tama! and so, today, let us pause and take the time to say

need to be vigilant in guarding the economy against the spillover effects of the global crisis. you may well ask, how is the bangko sentral responding to the global financial and economic crisis? well, the bsp has been providing ample liquidity to keep the financial markets functioning and able to fund the growth requirements of the economy, amidst the global credit crunch. the monetary actions we have taken since the fourth quarter of 2008 include the following : first, the opening of the us dollar repurchase facility to augment dollar liquidity in the foreign exchange market ; second, the enhancement of the existing peso repurchase facility through relaxed valuation and broader acceptable collateral ; third, the reduction in the reserve requirements on bank deposits by two percentage points ; fourth, the increase to p60 billion of the peso rediscounting budget to ensure adequate peso liquidity ; and fifth, the launching of the credit surety fund program to provide financing to small businesses through guarantees to small cooperatives with good track record. the bsp has also reduced its policy rates by 175 basis points since december 2008, given favorable inflation outlook and well - anchored inflation expectations. this historical series of five rate reductions brought our overnight borrowing or reverse repurchase ( rrp ) facility to 4. 25 per cent, the lowest in over 17 years. the intention is to help bring down the cost of borrowing and reduce the financial burden on firms and households. lower policy rates would also shore up business and consumer confidence for economic expansion. the bangko sentral has also ensured that banks and other financial institutions have risk management systems in place, that banks adhere to safe and sound banking practices, and that accounting and supervisory rules are calibrated to adjust to the new financial circumstances. well, how are our scorecards in relation to these initiatives? evidence suggests that these initiatives have been effective. our policy actions have provided a steady supply of liquidity that has allowed banks to continue lending and performing their role as fund intermediaries. market interest rates have trended downward following the policy rate cuts by the bsp, as banks pass on lower lending rates to their borrowers. inflation, meanwhile, continues to be subdued, and we continue to expect favorable inflation dynamics going forward. equally important, our banking system has remained sound and stable. other segments of the financial sector – including the money, bond and equities markets as well as the foreign exchange market – have showed signs of stabilization if not recovery.