The deceleration in liquidity growth may be traced mainly to lower net credits to the public sector as a result of the improved fiscal performance.

Improved macroeconomic conditions, particularly on the fiscal front, as well as upbeat expectations for 2006 heightened investor confidence.

We are watching market developments.

The expansion in the coverage of said declaration was proposed by the Anti-Money Laundering Council in order to comply with the Financial Action Task Force's Special Recommendation IX, which requires countries to have measures in place, including a declaration system or other disclosure obligation.

Renewed confidence will encourage more investment inflows. That is possible as long as the reform effort is sustained.

The creation of large liquid benchmarks will improve the trading turnover in the secondary market as this is expected to, among others, reduce the bid-offer spreads on bond prices. Participants will be able to get in or out of the benchmark issues more easily, making trading in Philippine bonds comparable to those in other emerging markets. This will be highly attractive to foreign investors in the market and bring additional business opportunities to the local financial community. This effort will complement earlier initiatives in capital market development, including the creation of the Fixed Income Exchange.