bsp will remain vigilant over the current inflation dynamics to ensure that the monetary policy stance continues to support economic recovery to the extent that the inflation outlook would allow. it will carefully scan the operating environment with a forward - looking perspective to move in a pre - emptive fashion to address any risks to our price stability mandate. on the financial sector : the bsp will intensify its monitoring and surveillance over its supervised institutions to ensure that they remain resilient to emerging risks and continue to be sound, stable, and inclusive, particularly through the pursuit of enhanced digitization. finally, on the external sector : the bsp will remain supportive of policies that will help strengthen the economy ’ s resilience to external shocks, including that of maintaining a market - determined exchange rate, keeping a comfortable level of reserves, and keeping the country ’ s external debt manageable. considering the recent economic developments and significant improvement in inoculation, we are optimistic that there is sufficient support for the country ’ s recovery this year and in the near term. finally, allow me to end my presentation with these key points : the country ’ s macroeconomic fundamentals remain sound and bright spots suggest recovery is 3 / 4 bis central bankers'speeches underway. the latest gdp growth suggests that the economy has started its gradual recovery. the currently high inflation is due to transitory factors. banks remain sound and while npl has increased, banks remain highly capitalized. external position is manageable with more than adequate external liquidity buffer and improving overseas filipino remittances. while economic activity has improved, the overall momentum of the economic recovery remains tentative as the threat of new covid - 19 strains continues. nevertheless, the sustained implementation of targeted fiscal initiatives as well as the acceleration of the government ’ s vaccination program should help boost market confidence and recovery of the economy in the coming months. the bsp believes that sustained monetary policy support for domestic demand should help the economic recovery gain more traction. looking ahead, the bsp affirmed its support to the economy for as long as necessary to ensure the country ’ s strong and sustainable economic recovery. the bsp ’ s actions and policy thrusts will continue to be anchored on its core mandates of promoting price and financial stability. toward this end, the bsp will continue to pursue appropriate policy actions responsive to the needs of the time. it will also continue undertaking a range of initiatives to create a more sustainable msme and agriculture financing ecosystem. thank you. 4

policies that require a measure of perseverance. how then do we promote competition in the financial system in general and in the banking system in particular? how do we expand the competition in the business sector and the mortgage market to also include households and small businesses? in view of the statements made recently, i would like to stress, as unambiguously as possible, that the bank of israel has been working towards ensuring the interests of the public, including the promotion of competition! competition is critical for the existence of an advanced financial sector. without competition, our banking system will not develop, the quality of service provided to customers will be adversely impacted, the consumer will lose confidence in the system and eventually there may also be consequences for stability. therefore, we are in favor of encouraging competition. competition does not contradict stability. let me repeat that in order to make sure that the message gets across – we are promoting competition in the banking system. we have done so in the past and we will do so in the future. how has the bank of israel worked to encourage competition? one of the barriers to competition is the difficulty in switching between banks and the entities that compete with them. the bank of israel is working to remove these barriers and will continue to do so. the zaken committee did not wait for the entry of new players and drew up a list of measures that strengthened the position of households and small businesses and increased the level of competition. the vast majority of those measures have already been implemented by the bank of israel. these include, among others, making it easier to switch banks and providing the possibility of implementing more bank activities on the internet, such as opening and closing of accounts. the banking supervision department recently issued an innovative directive that expands the activities that can be implemented by electronic communication, which has a huge potential for increasing competition between the banks. in general, the bank of israel views bis central bankers ’ speeches technology as a challenge for the banking system and also as a powerful lever for improving service to customers and lowering its price. the activity of the bank of israel to increase competition for the benefit of the consumer goes beyond making it easier to switch banks. another barrier to switching banks is the fact that a customer ’ s current bank knows the customer better than the bank he would like to move to and as a result the customer may be apprehensive that he will not be able to obtain loans at a good interest rate from a bank that doesn ’ t know him as well