potential in this sector. however, kenya ’ s mortgage debt to gdp ratio at about 2. 5 % is still low compared to the international standards such as us market where the ratio is over 70 %. the survey also identified key constraints to the mortgage market in kenya such as low levels of income, access to long term funds, credit risk due to absence of historical information, relatively high interest rates, difficulties with property registration and high incidental costs of borrowing. however, various initiatives are under way to tackle these obstacles. these initiatives include issuance of corporate / housing bonds by institutions with the aim of mobilizing long term resources to match the long - term nature of mortgages and the roll - out of the credit information sharing mechanism to enable financial institutions enhance their credit risk management processes. ladies and gentlemen, kenya has seen rapid urbanization over the last decade with the proportion of the kenyan population living in urban areas forecast to reach 60 % by the year 2030 from about 20 % in 2005. expanding cities are good for productivity and growth. bis central bankers ’ speeches however, the kenyan housing sector is currently characterized by inadequacy of affordable and decent housing and low - level of urban home ownership. despite the challenges, the housing sector plays a critical role in the achievement of key goals envisaged by vision 2030. housing construction, being labour intensive and having strong linkages with other sectors of the economy remains one of the principal levers for creating jobs and driving economic activity. mortgage market development will be required to support the expanding cities with the accompanying productivity gains ; but also has to be accompanied by infrastructure to decongest the cities and create more space for housing. ladies and gentlemen, the central bank of kenya in partnership with the banking sector is currently focusing on initiatives aimed at reducing costs of doing business for financial institutions with the main aim of bringing down costs of financial services. in addition to developing innovative products, the other major initiative towards cost reduction and financial inclusion has been the introduction of agent banking. the cbk has so far licensed eleven banks to carry out agent banking business and approved 10, 335 specific agents since the roll out in may 2010. the rollout of the agent banking model is mainly aimed at addressing the challenges of high transaction costs arising from the lack of proximity to financial services and putting up brick and mortar branches where they may not be economical in all the corners where customers are to be found. i am delighted to note that housing finance has also obtained approval for agent

are restructured or given relief ; and reducing the 5 - percent general loan - loss provision to 1 percent for restructured loans of borrowers in the affected areas. for all rediscounting banks granting of a 60 - day grace period to settle the outstanding rediscounting obligations as of 8 november 2013 with the bsp of all rediscounting banks in the affected areas ; and allowing banks to restructure with the bsp, on a case - to - case basis, the outstanding rediscounted loans of borrowers affected by the calamity. for quite a few other reasons, besides the calamities, 2013 has been described as a year of challenges, due to : bis central bankers ’ speeches 1. failing to reach a consensus on a fiscal legislation, the us government shut down for several days. 2. eurozone recovery remained weak and uneven across the member - countries. 3. china had to deal with growing shadow banking and rapid credit growth. 4. market anticipation of the fed ’ s policies added uncertainty in the financial markets and led to greater volatility of capital flows. nonetheless, the philippine economy was able to ride out turbulence in the global financial markets due to significant sources of strength. notwithstanding the slowdown in global economic growth, the philippine economy continued to have vibrant growth. for the first three quarters, gdp increased by 7. 4 percent, higher than the 6. 7 percent in the same period in 2012. growth was boosted by the strong performance of services, manufacturing and construction. on the expenditure side growth came mainly from consumer and public spending buttressed by increased investments in fixed capital ; exports contributed in the third quarter. this was supported by a benign inflation environment. the full - year 2013 average inflation rate of 3. 0 percent was at the low end of the government ’ s inflation target range of 3 – 5 percent for 2013. this is the fifth consecutive year that the country has been able to keep inflation within the government ’ s target inflation range. moreover, the philippines has substantial cushions to ride out potential turbulence in the global financial markets : our gross international reserves reached us $ 83. 7 billion as of end - december 2013. – can adequately cover 12. 1 months ’ worth of imports of goods and payments of services and income – equivalent to 8. 4 times the country ’ s short - term external debt based on original maturity and 5. 8 times based on residual maturity we enjoy a current account surplus owing to