further liberalizing foreign exchange rules. currently, we are drafting a set of circulars that will remove prior bsp approval for most private sector transactions. we aim to simplify registration processes, significantly reduce documentary requirements, and enhance data capture for effective policy decision - making. the amendments to fx regulations is just part of a broader thrust for a better organized fx market. over the medium term, we shall be rolling out a sequence of reforms that will increase fx market transparency, improve price discovery, and enhance market conduct. with these reforms, we hope to encourage fx flows from the parallel market to the formal market. even as we strengthen oversight over money service businesses ( msbs ), we will streamline fx requirements for the banking system to reduce market fragmentation and increase fx liquidity. this allows individuals and businesses greater and easier access to foreign exchange. ultimately, a deeper fx market will enhance resilience of our domestic economy against external shocks. the goal is to increase its ability to absorb large flows even as the bsp continues to pursue a market - determined exchange rate and allow greater exchange rate flexibility. we believe competitiveness can also be achieved on the firm and country - level through development of alternative sources of funding. in this regard, we are collaborating with other government agencies and private stakeholders to take measures to deepen our domestic debt market so that you, our esteemed businessmen and exporters can have a viable alternative to bank borrowing, supportive of economic growth. taken together, the fx and domestic debt market development initiatives are game changing reforms as these will increase availability of more financial products, especially hedging instruments. this is something that will benefit exporters, since hedging products can help protect you against interest rate and fx volatility. hedging allows you to focus on your core business. another major reform we are pursuing is the digitization of the financial system. last november 8, 2017, the philippine electronic fund transfer ( eft ) system and operations network, also called pesonet, was launched at the bsp. the pesonet is the first automated clearing house ( ach ) under the national retail payment system ( nrps ). the nrps lays down the principles that guide bsp ’ s strategic initiatives to modernize our retail payment system and to shift from a cash - heavy to cash - lite digital economy. the pesonet will be the electronic alternative to the paper - based check system. businesses will be able to conveniently transfer funds maintained

revision of risk - weighted assets framework both for the standardised approach and for the use of banks ’ internal risk models before the end of the year. swift legislative action on the key unfinished parts of the basel iii agenda will provide clarity to the financial system and support the latter in financing the recovery. as confirmed by g20 finance ministers and governors at their meeting in shanghai, the aim is now to focus on making basel iii effective without further increasing regulatory capital requirements. in addition, in 2015 the basel committee initiated a review of the prudential treatment of banks ’ exposures to sovereign risk. this review – which is being conducted in a “ careful, holistic and gradual manner ” – is meant to take into account several broad issues relating to the role of sovereign debt markets and the impact that any changes may have on this role and on certain market segments. in particular, in reviewing the existing regulatory treatment of sovereign risk, due consideration should be given to the liquidity function of sovereign bonds and to its potential implications for monetary policy implementation and transmission. given the widespread reach and impact of any policy action in this area, consistency at the global level is key to ensuring a truly international level playing field as it is stated in the five presidents report. conclusions let me conclude. bis central bankers ’ speeches europe is facing a number of challenges simultaneously, in the economic sphere and beyond. addressing these challenges requires a joint response. the ecb is doing, and will continue to do, its part by taking the necessary measures to fulfil its mandate. however, further work is also required in other policy areas to cement the foundations of the european union, foster innovation and productivity, and put the economy back on a path of robust, sustainable growth and job creation. thank you for your attention. i look forward to taking your questions. bis central bankers ’ speeches