literacy. in this regard, we will continue to work on legislation that are important to the bangko sentral – including amendments to our charter and the credit information system act. for the third pillar, we will continue to ensure that our philpass remains a safe, sound, reliable, and efficient payments system. we have also set strategic objectives to address bsp ’ s operational efficiency and maintain the public ’ s trust and confidence. we are of course aware of the challenges facing us on our way to achieving our objectives. for instance, inflation risks remain, in part due to relatively high liquidity growth, as remittances remain strong and growing confidence in the economy brings with it a steady inflow of foreign investments. this is the same “ problem of plenty ” that faces other countries in asia. to address this, we need to be creative and use non - traditional instruments. last may, for instance, we adopted preemptive measures to absorb liquidity. while it is too early to assess the effect of these measures, initial results are encouraging, and the inflation outlook remains benign even as the economy continues to power ahead. there is also no let - up in our campaign to encourage banks to strengthen their balance sheets through asset cleanup, capital buildup, and consolidation. this month, in parallel with other countries, the bangko sentral starts implementing basel ii, which requires that regulatory capital reflect the risks the banks are exposed to. we will also continue to innovate and adapt to the changing environment. for instance, electronic rediscounting has reduced processing time for credit applications of banks, including fund releases, from 3 to 5 days to just 5 minutes. we will also continue to implement our economic and financial literacy program to educate and empower more filipinos to benefit from the opportunities economic development brings. our program aims to cover millions of our entrepreneurial poor through our microfinance advocacy ; millions of students through the integration of saving and money management in our elementary curriculum in cooperation with the department of education ; millions of ofws and their families on growing their money through investments or entrepreneurship ; and the general public through a network of economic and financial literacy centers that the bangko sentral shall set up. later today, we will have the symbolic launch of our first economic and financial center at the lobby of our five - storey building. indeed, we at the bangko sentral ng pilipinas have a long list of things we need to do in the service of our

england independent in 1997. but by monetary policy frameworks, i mean the broader set of rules and procedures for taking decisions about interest rates. prior to 1992, such frameworks often took the form of a commitment to maintain a fixed exchange rate, most recently as a member of the erm. but these proved hard to sustain – sterling was repeatedly devalued, at great political cost to the government of the day. perhaps the most controversial frameworks took the form of commitments to meet targets for the growth in the money supply. these were meant to act as rules, which would tie the hands of politicians, but they proved ineffective, not least because the underlying economic relationships broke down. there were also periods – notably the 1970s – when there was no discernible monetary policy framework at all ; when monetary policy was in eclipse and governments relied on incomes polices to control inflation. these, too, were a dismal failure. inflation has averaged 2. 5 % since 1997, with a standard deviation of 0. 8 %. in the two decades to 1992, it averaged 9. 6 %, with a standard deviation of some 5. 6 %. over the past decade, output has grown steadily, averaging 2. 8 %, with a standard deviation of 0. 7 %, compared with an average of 2 % and a standard deviation of 2. 5 % over the seventies and eighties. all these frameworks suffered from one of two basic problems. they either lacked credibility, or they lacked sufficient flexibility for policy - makers to respond intelligently to events. so it is little surprise that they were associated with two decades of poor macroeconomic performance. sterling ’ s exit from erm in the autumn of 1992 led to an overhaul in the way monetary policy was conducted, with the adoption of an explicit target for inflation, and a number of moves to make the process of policy - making more transparent through the publication of minutes of what was popularly known as the ken and eddie show, and a new inflation report, produced by the bank. what was special about the 1997 arrangements? in the event, 1992 marked a break with the past. but while the policy innovations of the 1993 - 97 years were showing promise, the framework remained relatively informal. and decisions about interest rates stayed in the hands of the chancellor. the change in government in 1997 led to a far - reaching effort to institutionalise and depoliticise monetary policy arrangements. a new bank of england act stipulated that the objective of monetary