March 20, 2018, 7:56 am
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1 Philippine Peso = 0.07076 UAE Dirham
1 Philippine Peso = 2.0501 Albanian Lek
1 Philippine Peso = 0.0343 Neth Antilles Guilder
1 Philippine Peso = 0.38842 Argentine Peso
1 Philippine Peso = 0.02496 Australian Dollar
1 Philippine Peso = 0.0343 Aruba Florin
1 Philippine Peso = 0.03854 Barbados Dollar
1 Philippine Peso = 1.59711 Bangladesh Taka
1 Philippine Peso = 0.03064 Bulgarian Lev
1 Philippine Peso = 0.00726 Bahraini Dinar
1 Philippine Peso = 33.73757 Burundi Franc
1 Philippine Peso = 0.01927 Bermuda Dollar
1 Philippine Peso = 0.02536 Brunei Dollar
1 Philippine Peso = 0.13218 Bolivian Boliviano
1 Philippine Peso = 0.0632 Brazilian Real
1 Philippine Peso = 0.01927 Bahamian Dollar
1 Philippine Peso = 1.24952 Bhutan Ngultrum
1 Philippine Peso = 0.18446 Botswana Pula
1 Philippine Peso = 385.7418 Belarus Ruble
1 Philippine Peso = 0.03849 Belize Dollar
1 Philippine Peso = 0.02523 Canadian Dollar
1 Philippine Peso = 0.01834 Swiss Franc
1 Philippine Peso = 11.71927 Chilean Peso
1 Philippine Peso = 0.12196 Chinese Yuan
1 Philippine Peso = 55 Colombian Peso
1 Philippine Peso = 10.83487 Costa Rica Colon
1 Philippine Peso = 0.01927 Cuban Peso
1 Philippine Peso = 1.72909 Cape Verde Escudo
1 Philippine Peso = 0.39802 Czech Koruna
1 Philippine Peso = 3.40713 Djibouti Franc
1 Philippine Peso = 0.11676 Danish Krone
1 Philippine Peso = 0.95896 Dominican Peso
1 Philippine Peso = 2.19576 Algerian Dinar
1 Philippine Peso = 0.2451 Estonian Kroon
1 Philippine Peso = 0.33786 Egyptian Pound
1 Philippine Peso = 0.52447 Ethiopian Birr
1 Philippine Peso = 0.01566 Euro
1 Philippine Peso = 0.03882 Fiji Dollar
1 Philippine Peso = 0.01381 Falkland Islands Pound
1 Philippine Peso = 0.01383 British Pound
1 Philippine Peso = 0.08486 Ghanaian Cedi
1 Philippine Peso = 0.90173 Gambian Dalasi
1 Philippine Peso = 173.4682 Guinea Franc
1 Philippine Peso = 0.14135 Guatemala Quetzal
1 Philippine Peso = 3.95511 Guyana Dollar
1 Philippine Peso = 0.15109 Hong Kong Dollar
1 Philippine Peso = 0.45397 Honduras Lempira
1 Philippine Peso = 0.11662 Croatian Kuna
1 Philippine Peso = 1.24432 Haiti Gourde
1 Philippine Peso = 4.86975 Hungarian Forint
1 Philippine Peso = 264.79768 Indonesian Rupiah
1 Philippine Peso = 0.06653 Israeli Shekel
1 Philippine Peso = 1.25202 Indian Rupee
1 Philippine Peso = 22.8131 Iraqi Dinar
1 Philippine Peso = 726.26201 Iran Rial
1 Philippine Peso = 1.91715 Iceland Krona
1 Philippine Peso = 2.44817 Jamaican Dollar
1 Philippine Peso = 0.01361 Jordanian Dinar
1 Philippine Peso = 2.04193 Japanese Yen
1 Philippine Peso = 1.94701 Kenyan Shilling
1 Philippine Peso = 1.31502 Kyrgyzstan Som
1 Philippine Peso = 76.72447 Cambodia Riel
1 Philippine Peso = 7.69364 Comoros Franc
1 Philippine Peso = 17.34104 North Korean Won
1 Philippine Peso = 20.59788 Korean Won
1 Philippine Peso = 0.00577 Kuwaiti Dinar
1 Philippine Peso = 0.0158 Cayman Islands Dollar
1 Philippine Peso = 6.21407 Kazakhstan Tenge
1 Philippine Peso = 159.5183 Lao Kip
1 Philippine Peso = 29.01156 Lebanese Pound
1 Philippine Peso = 3.00482 Sri Lanka Rupee
1 Philippine Peso = 2.52331 Liberian Dollar
1 Philippine Peso = 0.23064 Lesotho Loti
1 Philippine Peso = 0.05874 Lithuanian Lita
1 Philippine Peso = 0.01196 Latvian Lat
1 Philippine Peso = 0.02554 Libyan Dinar
1 Philippine Peso = 0.17689 Moroccan Dirham
1 Philippine Peso = 0.31757 Moldovan Leu
1 Philippine Peso = 0.96012 Macedonian Denar
1 Philippine Peso = 25.78035 Myanmar Kyat
1 Philippine Peso = 46.03083 Mongolian Tugrik
1 Philippine Peso = 0.15554 Macau Pataca
1 Philippine Peso = 6.76301 Mauritania Ougulya
1 Philippine Peso = 0.6368 Mauritius Rupee
1 Philippine Peso = 0.3 Maldives Rufiyaa
1 Philippine Peso = 13.74605 Malawi Kwacha
1 Philippine Peso = 0.35992 Mexican Peso
1 Philippine Peso = 0.07528 Malaysian Ringgit
1 Philippine Peso = 0.23044 Namibian Dollar
1 Philippine Peso = 6.87861 Nigerian Naira
1 Philippine Peso = 0.59692 Nicaragua Cordoba
1 Philippine Peso = 0.14861 Norwegian Krone
1 Philippine Peso = 2.00301 Nepalese Rupee
1 Philippine Peso = 0.02669 New Zealand Dollar
1 Philippine Peso = 0.00742 Omani Rial
1 Philippine Peso = 0.01927 Panama Balboa
1 Philippine Peso = 0.06293 Peruvian Nuevo Sol
1 Philippine Peso = 0.06089 Papua New Guinea Kina
1 Philippine Peso = 1 Philippine Peso
1 Philippine Peso = 2.12852 Pakistani Rupee
1 Philippine Peso = 0.06613 Polish Zloty
1 Philippine Peso = 106.35838 Paraguayan Guarani
1 Philippine Peso = 0.07013 Qatar Rial
1 Philippine Peso = 0.07303 Romanian New Leu
1 Philippine Peso = 1.108 Russian Rouble
1 Philippine Peso = 16.24143 Rwanda Franc
1 Philippine Peso = 0.07225 Saudi Arabian Riyal
1 Philippine Peso = 0.14897 Solomon Islands Dollar
1 Philippine Peso = 0.25942 Seychelles Rupee
1 Philippine Peso = 0.34781 Sudanese Pound
1 Philippine Peso = 0.15787 Swedish Krona
1 Philippine Peso = 0.02537 Singapore Dollar
1 Philippine Peso = 0.01381 St Helena Pound
1 Philippine Peso = 0.42786 Slovak Koruna
1 Philippine Peso = 147.01348 Sierra Leone Leone
1 Philippine Peso = 10.88632 Somali Shilling
1 Philippine Peso = 384.19653 Sao Tome Dobra
1 Philippine Peso = 0.16859 El Salvador Colon
1 Philippine Peso = 9.92254 Syrian Pound
1 Philippine Peso = 0.23065 Swaziland Lilageni
1 Philippine Peso = 0.60154 Thai Baht
1 Philippine Peso = 0.0462 Tunisian Dinar
1 Philippine Peso = 0.04308 Tongan paʻanga
1 Philippine Peso = 0.0755 Turkish Lira
1 Philippine Peso = 0.12954 Trinidad Tobago Dollar
1 Philippine Peso = 0.56091 Taiwan Dollar
1 Philippine Peso = 43.31406 Tanzanian Shilling
1 Philippine Peso = 0.50848 Ukraine Hryvnia
1 Philippine Peso = 70.36609 Ugandan Shilling
1 Philippine Peso = 0.01927 United States Dollar
1 Philippine Peso = 0.54624 Uruguayan New Peso
1 Philippine Peso = 156.45471 Uzbekistan Sum
1 Philippine Peso = 704.39304 Venezuelan Bolivar
1 Philippine Peso = 438.59343 Vietnam Dong
1 Philippine Peso = 2.01233 Vanuatu Vatu
1 Philippine Peso = 0.0486 Samoa Tala
1 Philippine Peso = 10.2763 CFA Franc (BEAC)
1 Philippine Peso = 0.05202 East Caribbean Dollar
1 Philippine Peso = 10.2763 CFA Franc (BCEAO)
1 Philippine Peso = 1.85954 Pacific Franc
1 Philippine Peso = 4.81503 Yemen Riyal
1 Philippine Peso = 0.23062 South African Rand
1 Philippine Peso = 99.99036 Zambian Kwacha
1 Philippine Peso = 6.97302 Zimbabwe dollar

Having the foresight to future-ready the economy

By BSP Gov. Nestor Espenilla
Speech delivered during the MAP Economic Briefing 2018 Dusit Thani Hotel, Makati

We at the BSP are optimistic.  This optimism is shared.  

According to the World Bank, “The Philippines will continue to be the fastest-growing economy in the Association of Southeast Asian Nations (Asean) for 2018-2020, despite some stabilization of investment growth.”

Moreover, growth projections from third-party assessors are not far from the national government’s target of 7.0-8.0 percent growth in the next three years.

We note that growth achieved over the past several years is broad-based and comes from various sources.

On the production side, the share of industry output, for example manufacturing and construction, has been expanding and is a welcome transformation. 

On the demand side, growth is buoyed by both robust private consumption and capital investments. 

Another source of confidence comes from sustained investments in job-creating industries.  

There was double-digit year-on-year expansion of approved investments for the first three quarters of 2017.

Moreover, the favorable inflation environment enables and promotes greater economic activity. For six consecutive years, from 2009-2014, as well as in 2017, headline inflation has been within the national government’s inflation target range.

For February 2018, year-on-year headline inflation increased to 4.5 percent from 4.0 percent in January using the 2006-based Consumer Price Index (CPI) series. 

Likewise, headline inflation rose to 3.9 percent in February from 3.4 percent in the previous month using the 2012-based CPI series. 

The uptick in headline inflation was traced mainly to higher prices of selected food and non-food items. 

In particular, rice prices increased due to the end of the harvest season. 

At the same time, inflation for transport, restaurant, and miscellaneous goods and services also went up.

The year-to-date average of 4.2 percent using the 2006-based basket was slightly above the Government’s announced inflation target range of between 2 and 4 percent for 2018 while the year-to-date average of 3.7 percent using the 2012-based basket remain within the Government’s announced inflation target range. 

The first round price effects of TRAIN are evolving more or less as expected. 

We continue to see the upward inflationary effects as transitory. However, we are carefully assessing next round effects and how inflation expectations could be affected. 

The various social safety nets complementing the TRAIN are expected to temper these second round effects. 

Moreover, the resulting improvement in productivity will likely moderate inflation pressures over the medium term.

Nevertheless, the BSP will remain watchful against signs of higher inflation becoming more broad-based and persistent to ensure that inflation expectations remain consistent with the target. 

Domestic liquidity and credit dynamics remain accommodating to our expanding economy. Credit expansion is accompanied by solid demand for loans across key economic sectors.

Further, the Philippine banking system capped 2017 with sustained growth in assets, deposits, and capital.  This was accompanied by improved asset quality, firm liquidity position, and strong capitalization. 

Overall, the Philippine banking system remains sound and stable. We expect these improvements to continue. 

The Philippines’ external position also continues to be manageable amid global headwinds.  

The BOP deficit is a reflection of an economy that is growing rapidly in a way that is sustainable. 

The current account balance also mirrors the saving and investment behavior of the economy. 

Our savings investment gap has stayed positive since 2003 (hence the CA surpluses during this period) but has started to converge in 2015 due mainly to the rise in investments and increase in infrastructure spending. 

Over time, these investment-led economic activities will result in the expansion of the economy’s potential capacity.

The robustness of the country’s external position is anchored by our large GIR and secondary buffers such as sustained foreign direct investments, remittances and BPO receipts, along with investment grade-rating that guarantees ready market access for any equity and debt financing requirement.

Meanwhile, the peso continues to flexibly reflect the day-to-day market operations. 

Exchange rates act as automatic stabilizer if they move in a way that dampens the effects of shocks on domestic output. In short, the disequilibrium gets corrected automatically with the change in the exchange rate. 

There will be volatility, runs and corrections, but the peso is not expected to meltdown because the underlying economic fundamentals of the economy are healthy.  

The depreciation of the peso has mirrored the continued bullish sentiment on the economy’s growth performance and prospects. These are evident in the strong demand for imports, residents’ increased direct and portfolio investments abroad, and debt prepayments by both the public and private sectors. 

All of these contributed to an increase in the demand for dollars and dollar-denominated assets.

Ladies and gentlemen, the Philippine economy enjoys a sustainable growth momentum.  

Over the medium term, the Philippine economy is expected to expand by above six percent annually in the next three years.

But this does not warrant complacency. 

For both the government and the private sector, disruptive forces must keep us on our toes.

This brings me to the second part of my message as I share our prospects for the Philippine economy.  

I feel right at home and in my element as I engage in sharing our plans... In this era of technological breakthroughs and radical innovation, MAP could not have chosen a more timely and relevant theme for its activities this year. 

BSP’s planned game changing reforms and initiatives align with your theme.  “Competing in the age of disruption.”  I like that.  It shows foresight. 

Foresight does not necessarily mean being able to predict the future.  

Rather, I believe it means having insight on relevant factors and to allow for flexibility and optionality as the future unfolds.  And the future is already here.  It is unfolding.

Indeed, the way governments tackle policymaking and the way businesses operate are being altered by megatrends.  

These include a rebalancing of the world economy, changes in demographics, and the rise of disruptive technologies, to name a few.

These trends cannot be ignored.  Complexities such as these make it challenging to frame economic policy. 

Acknowledging this, the Bangko Sentral under my Governorship has set its sights on game-changing financial sector reforms.  

These initiatives aim to gear up the financial system to be very efficient, flexible and market-driven so that it can be innovative, competitive, and ready to adjust to the needs of customers.  

Further, allowing markets to discover prices on their own and encouraging self-correction mechanisms will make our economy more resilient and future ready.

First -  the BSP, together with other government agencies, industry associations and market participants, have rolled out initiatives to further develop the local currency debt and foreign exchange (FX) markets.   

The reform agenda on debt markets officially unfolded in November 2017 with the launch of the Government Securities Repo Program. 

Last February 19, 2018, the Bureau of the Treasury released the implementing guidelines for the enhanced Government Securities Eligible Dealers (GSED) Program.  This program aims to improve the primary debt market and increase the liquidity and depth of the secondary market.  

We are looking forward to further enhancements in the market infrastructure and the issuance of improved interest rate benchmark guidelines toward a more reliable yield curve.

We are also undertaking ambitious FX reforms towards a deeper and better organized FX market.  This includes further liberalizing FX rules to reduce cost of doing business and improve data capture. 

 Last January 15, 2018, new rules that lifted prior BSP approval and streamlined registration processes for purely private sector foreign currency loans took effect.  

A window was likewise opened for six months providing an amnesty period during which private sector loans previously obtained without prior BSP approval can register and be eligible for servicing from the banking system.  

To date, the BSP has received 21 loan registration under this amnesty window covering around $489 million outstanding balances.  

We expect captured data to increase further as the simplified rules gain traction.  

Currently, we are finalizing an exposure draft amending FX rules on foreign investments. Further amendments to adopt similar measures on trade and non-trade transactions shall likewise be undertaken. 

Over the medium term, we plan to enhance governance and FX market oversight that will improve transparency, price discovery and market conduct.  Ultimately, we want to see a more liquid FX market that supports a flexible and market-determined exchange rate.

Relatedly, last February 15, 2018, we announced yet another major and bold financial market reform initiative.  

We began phased reduction of our ultra-high reserve requirement regime to allow efficient absorption and mobilization of liquidity.  

The Monetary Board approved the reduction in the reserve requirement ratio (RRR) by one percentage point as an operational adjustment to support the BSP’s shift towards a more market-based implementation of monetary policy.  This took effect last March 2, 2018. 

There is a calibrated speed and a purposeful timing in carrying these reductions out.  

The purpose is to promote a more efficient and level financial system which is less biased against deposit-taking financial institutions.  

The purpose is to lessen market distortions which create inefficiencies.  

The purpose is to shift to market-based monetary instruments for more effective monetary policy transmission.

We have heavily relied on reserve requirements for a long time in a situation of underdeveloped banking and financial markets and limited open market operation tools.  

This is no longer the case for the Philippines.  Our financial system is more sophisticated, disciplined, and resilient; our economy is much stronger today.  

Further, the BSP has attained sufficient progress since the adoption of the interest rate corridor (IRC) framework in 2016 which provides us ample space to mitigate potential liquidity impact of a phased reduction in reserve requirement via off-setting auction-based monetary operations.

There is misconception that these phased reductions in the reserve requirement signal easing of the monetary policy stance.  This is certainly not the case  — and I cannot emphasize this enough — this is an operational adjustment that is part of innovative financial sector reforms that we are currently implementing.  

Any ensuing excess liquidity is to be siphoned off by BSP’s dynamic open market operations and transactions with the national government.  Further, the flexibility of the exchange rate provides additional adjustment mechanism.  

Therefore, analysts’ fears that this will fuel more inflation is based on an incomplete analysis of the impact of this operational adjustment. 

Moreover, to the extent that speculators use RRR reduction as a pretext for peso depreciation, BSP participates in the market to manage excessive volatility. 

We believe this can effectively drain peso liquidity from the system.  There will be self-correction, which is how efficient markets work.

Ultimately, the BSP has many options to maintain firm monetary control.  Shifts in monetary policy stance will continue to be signalled through changes in the policy rates.  

Thus, analyst concerns of ensuing looser monetary policy is really unfounded.

Second -  Regulators like the BSP must foster an enabling ecosystem where competition and responsible innovations are encouraged to thrive.  

We believe that regulations should not stand in the way of market developments.   

At the BSP, we have strategically opened up the banking system to competition.  For instance, since the enactment of the Foreign Banks Liberalization Law in 2014, the Monetary Board has approved 12 foreign bank applications and 5 representative offices.  

Similarly, our flexible approach to financial innovation encourage competition from new players, including fintech companies.

Leveraging on safe, innovative and affordable financial instruments and channels also drives business and industry growth and serves as the gateway to greater financial inclusion.

Professor Klaus Schwab, Founder of the World Economic Forum quipped, “There has never been a time of greater promise, or greater peril.” This given, the BSP seeks to continually build a regulatory environment for innovations to flourish, yet still mindful that risks to stability and integrity – including from cyber attacks, money laundering, and terrorism financing – must be effectively managed.

There are three principles that underpin our regulatory approach: First, regulation must be risk-based, proportionate and fair. Second, there is need for active multi-stakeholder collaboration. Third, consumer protection must be upheld and innovation must work for the benefit of consumers.

Our “test and learn” approach remains useful as we continue to deal with increasing digital innovations in the market.

The BSP is also on constant surveillance mode for other fintech activities by emerging market players. For example, we are monitoring industry developments on crowd-funding and peer-to-peer lending, ready to take regulatory action when necessary. 

The BSP is working with the industry in implementing the National Retail Payment System (NRPS).  

Lastly, the BSP is currently closely coordinating with regulators from other jurisdictions for possible information sharing and a referral system focused on fintechs.  Under the proposed agreements, authorities will facilitate the entry of potential fintech players from their respective jurisdictions to minimize any duplication of efforts and further promote expansion of fintech innovations in the region.

Ladies and gentlemen, with both challenges and opportunities brought about by rapid innovation and technological disruption, economic players must adapt to changes, or else, one may find itself adrift and lost.

Rest assured that the BSP is committed to continue to pursue reforms to allow digital innovations to flourish as long as prudent standards are in place, and to ensure a level playing field for all stakeholders concerned – be it the businesses, consumers, or the general public.
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