amando m tetangco, jr : launch of the strengthening program for rural banks ( sprb ) keynote message by mr amando m tetangco, jr, governor of bangko sentral ng pilipinas ( the central bank of the philippines ), to the philippine deposit insurance corporation ( pdic ), makati city, 8 august 2010. * * * pdic president jose nograles, members of the pdic board, ms. cora miller and other officers of the rural bankers association of the philippines ( rbap ), fellow workers in government, distinguished guests, friends from media, ladies and gentlemen, good morning to all of you. first, let me thank you for inviting me to deliver a message in this milestone event – the launching of the strengthening program for rural banks ( sprb ). it is indeed a pleasure for me to affirm today the bsp ’ s commitment, support and partnership with the pdic and the rural banking industry in this important undertaking. rural banks are, what i often refer to as, the “ natural frontliners ” in our national program to broaden and deepen the reach of responsible … and empowering … financial services to local communities. it is therefore incumbent upon the regulators to ensure that the strength and viability of this critical segment of our banking system is sustained, particularly during these challenging times that we face. the sprb is specifically expected to achieve this goal of creating a stronger rural banking system as it promotes mergers and consolidations between or among rural banks and eligible strategic third party investors ( stpis ) under a specific set of guidelines. there are two prongs to the sprb – one, the capital augmentation component, and two, the regulatory relief package. the capital augmentation and direct loan component is to be made available through financial assistance from the pdic. to flesh out the regulatory relief package, the monetary board approved a set of incentives that include the conversion and opening / relocation of head offices, branches and extension offices, the waiver of penalties and other incentives pertaining to rediscounting and emergency loans. in addition to the financial strengthening of the resulting entities, the grant of these incentives is expected to allow such entities to achieve economies of scale, attract more skills, and better manage their liabilities. furthermore, through mergers and consolidations, the resulting banks will achieve higher capitalization, which would then enable them to diversify their portfolios to reduce risk, fund growth

. the implementation of the revised risk - based capital framework for banks was also deferred from end - 2021 to end - 2022 - the period of relief on the reporting of past due and non - performing loans of borrowers affected by the pandemic was also extended to 31 december 2021 from the original timeline of 8 march 2021 subject to reporting to the bsp. - these policy issuances reinforce earlier pronouncements of the bsp that relax the know - yourcustomer requirements for retail clients to facilitate their access to formal financing channels. given a manageable inflation path, the bsp has kept the key policy interest rate at 2. 0 percent in its latest monetary board meeting. the bsp ’ s policy and liquidity - easing measures have injected into the financial system a total liquidity equivalent to around 13 percent of the country ’ s full year nominal gross domestic product for 2020 as of november 11, 2021. moving forward, the bsp ’ s actions and policy thrusts will continue to be anchored on its core mandates of promoting price and financial stability. towards this end, the bsp will continue to pursue appropriate policy actions responsive to the needs of the time. on monetary policy : the bsp will remain vigilant over the current inflation dynamics to ensure that the monetary policy stance continues to support economic recovery to the extent that the inflation outlook would allow. it will carefully scan the operating environment with a forwardlooking perspective to move in a pre - emptive fashion to address any risks to our price stability mandate. on the financial sector : the bsp will intensify its monitoring and surveillance over its supervised institutions to ensure that they remain resilient to emerging risks and continue to be sound, stable, and inclusive, particularly through the pursuit of enhanced digitization. finally, on the external sector : the bsp will remain supportive of policies that will help strengthen the economy ’ s resilience to external shocks, including that of maintaining a market - determined exchange rate, keeping a comfortable level of reserves, and keeping the country ’ s external debt manageable. more recently, the country has managed to successfully reduce the number of covid - 19 cases. as of the other day, the philippines logged 425 new covid - 19 cases. this is the lowest since july 2020. considering the recent economic developments and significant improvement in vaccine rollout, we are optimistic that there is sufficient support for the country ’ s recovery this year and in the near term.