On the external sector, our policies will be geared toward: (1) ensuring sustainability of the country’s external debt; (2) maintaining a market-determined exchange rate with scope for occasional official action in cases of extreme movements in the peso; (3) maintaining a comfortable level of reserves; and (4) improving the foreign exchange environment further through forex deregulation.
Reforms in the financial sector will be geared toward maintaining a strong banking system and a vibrant capital market. The BSP remains committed to strengthening the banking system through structural reforms and speedier disposition of non-performing assets. At the same time, continuing asset clean-up of banks should help spur credit and investments, thereby generating support for more sustainable economic activity in the medium term.