Amando M Tetangco: State of the Philippine economy and inauguration
of a new regional branch
Welcome remarks by Mr Amando M Tetangco, Jr, Governor of the Bangko Sentral ng
Pilipinas, on the occasion of the inauguration of the BSP Pampanga regional branch,
San Fernando, 17 June 2010.
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Her Excellency Gloria Macapagal Arroyo, Secretary Gary Teves, fellow workers in
government, leaders of the business community, members of the banking community,
special guests, mga kabalen, good afternoon.
On behalf of the members of the Monetary Board we welcome all of you to this new home of
the Bangko Sentral ng Pilipinas in the City of San Fernando.
We are happy and honored that you have accepted our invitation to join the inaugural
ceremonies of this new landmark in Pampanga.
Indeed, we should celebrate what the transfer of our Pampanga office represents - that the
Bangko Sentral ng Pilipinas needed bigger offices to support sustained growth of economic
transactions here in Pampanga and in nearby provinces such as Zambales, Tarlac, and
Bulacan.
In fact, of the 21 regional offices and branches of the Bangko Sentral, our Pampanga branch
is the second largest in terms of deposits, next only to Cebu.
In addition, Region III or Central Luzon ranks the third largest in terms of net loan portfolio,
after the National Capital Region and Central Visayas.
This is concrete proof of the gains this region has made over the years, having overcome the
setbacks wrought by the eruption of Mt. Pinatubo. Ladies and gentlemen, let us celebrate
this success with a round of applause!
It is not surprising therefore that the Bangko Sentral's recent surveys indicated that the
business sector and the consumers in Region III are optimistic that even higher levels of
growth and prosperity will continue to be achieved.
And while the Bangko Sentral has moved to San Fernando, we remain grateful to Angeles
City for supporting us in the last 23 years that we held office at the historic Pamintuan House
where the first anniversary of the Philippine Republic was held and which served briefly as
presidential residence of Emilio Aguinildo, the first Philippine President.
For this reason, the Bangko Sentral ng Pilipinas has included the Pamintuan House in the list
of real estate properties that will be turned over to the Department of Finance as property
dividends. The Department of Finance in turn will transfer responsibility over the property to
the National Historical Commission which will convert this into a museum.
In this manner, we ensure that ownership of Pamintuan House remains with government and
Angeles City will be assured that this historic landmark in its midst will be preserved for the
next generations as witness to the history and heroism of our people.
Ladies and gentlemen. I am also pleased to report that our country, as a whole, is also doing
relatively well. While the world economy remain in distress following the worst global financial
crisis in decades, the Philippine economy continued to move forward, culminating in the
7.3% GDP in the first quarter this year.
The resiliency of our economy was not lost to global analysts and investors. One of the
world's biggest investment banks said the Philippines surpassed expectations, displaying
remarkable resilience and an impressive rebound. The pursuit of sustained economic
reforms under the Administration of President Arroyo made this possible.
At the same time, the Bangko Sentral as an independent institution responsible for in inflation
management and banking supervision reinforced the Philippines' macroeconomic
achievements.
Average annual inflation was kept at single digits dropping to 2.8 percent in 2007, the lowest
annual average in 21 years. This year, the average inflation for the year is at 4.3 percent,
well within the government's target of 3.5 to 5.5 percent for 2010. The centrality of price
stability, particularly in creating an environment conducive to informed consumption and
investment decisions cannot be overemphasized.
At the same time, our external position remains strong. Our balance of payments is in
surplus in spite of a difficult environment while the country's Gross International Reserves
(GIR) is at a record high level of $48 billion and could cover more than 9 months of imports of
goods, three times the standard of three months.
Our healthy external position is due in part to the continued surge of Overseas Filipino
remittances to historic high levels. In support of our OFs, Bangko Sentral has been working
on lowering remittance charges and conducting financial education on investment
opportunities and investor protection programs.
Another important mandate of the BSP is maintaining financial stability, which proved its
significance in the recent global economic turmoil. The financial reforms we have consistently
pursued have enabled the Philippine financial system to remain resilient amidst the global
financial storm. In fact, the country's financial system has substantially improved as indicated
by the uptrend in total assets, the rise in bank capital ratios, improvement in bank profitability
and better non-performing loan ratios. The promotion of good governance practices, steady
capitalization build-up, and continuing reforms generated positive results for the banking
sector.
We are also pleased to report that we continue to make good progress in integrating our
countrymen into the net of the formal financial system through a program to provide financial
services to the underserved as well as the unserved and unbanked.
In particular, we have made inroads in improving lives through microfinance with an
impressive rise in the number of clients served, in loans granted and in savings generated. In
fact, the country has been recognized as one of the best in the world of microfinance by the
Economist Intelligence Unit. The Philippines is also in a leadership position for mobile money
transfers.
This is not to say that the road ahead will be easy. However, we have learned that
cooperating and working together can do wonders in terms of keeping our economy on
sound and stable footing in the years ahead to improve the lives of Filipinos.
This, we shall continue to do as we pursue our mandate to ensure stable prices through
monetary policies; a sound and stable banking system through appropriate policies and
programs; as well as a safe and reliable payments system that inspires confidence in our
financial system. .
These topics will be discussed in greater detail in the Restrospective Forum that will follow
later.
Your Excellency, ladies and gentlemen, on behalf of my fellow central bankers, I thank you
for joining us today on the inauguration of the Bangko Sentral's new branch office in
Pampanga.
Mabuhay!