The Philippines‘ central bank is watching financial risks in the country closely and is ready to act should the situation demand attention, its new governor told CNBC.

One of the fastest growing economies in Asia, the Philippines posted GDP growth of 6.4 percent in the first quarter of 2017 from a year ago — even amid political tensions with President Rodrigo Duterte declaring martial law in Mindanao. Recently, the country has seen Chinese investments pouring in.

The rapid pace of growth is sparking some concerns, but Bangko Sentral ng Pilipinas’ governor Nestor Espenilla said the institution is watching.

“If we’re talking about the formation of asset bubbles in real estate, that’s certainly an area that we have been closely tracking, drawing from lessons from other countries and from the past,” said Espenilla.

“The BSP has been quite vigilant in assessing the situation and deploying measures to deal with the situation,” he said, citing the set-up of a stress test to monitor the property market.

Espenilla, who took office just last week, was previously the deputy governor in charge of banking supervision. He replaced respected career central banker Amando Tetangco who served a maximum two terms for 12 years.

Policymakers in the Philippines have been trying to balance the growth of the emerging economy while ensuring it’s not overheating.

“This government is very keen to bridge the inequalities that permeate our society. You cannot really characterize a society as stable if there are a lot of deep-seated inequalities that continue and which make things fundamentally unstable,” said Espenilla.

Philippines’ annual inflation eased for a second straight month in June with the consumer price index rising 2.8 percent in June, the lowest since January. The central bank had a 2.4 to 3.2 percent estimate for June, Reuters reported. On June 22, policymakers left key interest rates unchanged and cut their 2017 inflation forecast this year to 3.1 percent from 3.4 percent.

This comes as Espenilla told Reuters last month that the central bank was watching the rapid pace of domestic credit growth closely. Bank lending in the Southeast Asian country has been rising at a double-pace for at least two years, Reuters calculations show. Most of the loans are going to real estate, manufacturing and information and communication, added the news agency.

Espenilla told CNBC that, rather than reacting, the agency is looking at the quality of management of the credit.

“We always look as well at the underlying underwriting beneath that credit expansion — where is credit going and for what purpose,” said Espenilla.

“We cannot simply react…The credit-to-GDP ratio of the Philippines is actually relatively low compared to the rest of the region. The economy, financial systems are developing and the credit markets are just on catch-up mode and deepening,” he added.

That does not, however, justify excessive credit growth, and the central bank has a protocol to assess the risk, he added.

Regarding interest rates, the Philippines will stick to its own assessment of the country’s economy in determining interest rate policy, said Espenilla.

“If you ask me about whether it’s time to adjust interest rates in reference to what’s going on outside the country, my response will be not necessarily because what matters to the BSP is really the dynamics of our own data and looking at the path of inflation,” Espenilla added.

Espenilla said the central bank announces and communicates its estimate of the country’s inflation path two years in advance, signaling its policy intentions. Policy assessment is carried out regularly.