has been implementing an integrated economic and financial learning program that covers different segments of our society – from students to young adults to overseas filipinos and their families to teachers and parents as well as the unbanked and the underbanked. our ultimate goal is to make people part of our financial system while giving them protection. in other words, we want to develop an inclusive financial system that will generate inclusive growth through financial education and protection. in this connection, i am pleased to report that the development of the philippine microfinance sector is one success story in our continuing efforts to develop a more inclusive financial system. in fact, the philippines has been cited for the fourth consecutive year for having the world ’ s best regulatory environment in promoting microfinance. millions of filipino microentrepreneurs and their families have been liberated from poverty through microfinance which gives access to credit without collateral. as of june 2012, banks have an outstanding microfinance loan portfolio of p 7. 7 billion and an equally impressive savings portfolio of p4. 3 billion from microentrepreneurs. bis central bankers ’ speeches indeed, the success of many microentrepreneurs is proof of the empowering benefits of gaining access to financial services. this is the reason why we are optimistic about the impact of having lessons on entrepreneurship taught to our elementary students. using language and concepts that are easy for children to understand, the bangko sentral and the department of education produced teaching guides to instill in children an understanding and consciousness of financial issues. this is at the heart of the bsp - depeds finance education program. the lessons range from telling the difference between needs and wants to undertaking income - generating ventures to the concept of inventory to acquiring the qualities of a successful entrepreneur. all these with the aim to hone their financial decision - making skills that will serve them well into adulthood. ladies and gentlemen. in this journey, we have met many challenges ; but we also gained partners along the way. one of our partners was the learning section of the local newspaper philippine daily inquirer. supported by citi and the bangko sentral, it published a six - week series designed for high school students : “ money matters for teens : you can bank on it ”. it eventually earned the top prize from the world association of newspapers for “ excellence in efforts to engage the youth ”. another partner is the bankers institute of the philippines which conducts personal finance management lectures for teachers and parents

report to the congress. ben s. bernanke ( 2012 ), “ semiannual monetary policy report to the congress, ” statement before the committee on financial services, u. s. house of representatives, february 29. bis central bankers ’ speeches ( including, potentially, the flexibility to recapitalize banks directly rather than through loans to sovereigns ), and movement toward unified supervision of euro - area banks. even with these announcements, however, europe ’ s financial markets and economy remain under significant stress, with spillover effects on financial and economic conditions in the rest of the world, including the united states. moreover, the possibility that the situation in europe will worsen further remains a significant risk to the outlook. the federal reserve remains in close communication with our european counterparts. although the politics are complex, we believe that the european authorities have both strong incentives and sufficient resources to resolve the crisis. at the same time, we have been focusing on improving the resilience of our financial system to severe shocks, including those that might emanate from europe. the capital and liquidity positions of u. s. banking institutions have improved substantially in recent years, and we have been working with u. s. financial firms to ensure they are taking steps to manage the risks associated with their exposures to europe. that said, european developments that resulted in a significant disruption in global financial markets would inevitably pose significant challenges for our financial system and our economy. the second important risk to our recovery, as i mentioned, is the domestic fiscal situation. as is well known, u. s. fiscal policies are on an unsustainable path, and the development of a credible medium - term plan for controlling deficits should be a high priority. at the same time, fiscal decisions should take into account the fragility of the recovery. that recovery could be endangered by the confluence of tax increases and spending reductions that will take effect early next year if no legislative action is taken. the congressional budget office has estimated that, if the full range of tax increases and spending cuts were allowed to take effect – a scenario widely referred to as the fiscal cliff – a shallow recession would occur early next year and about 1 – 1 / 4 million fewer jobs would be created in 2013. 3 these estimates do not incorporate the additional negative effects likely to result from public uncertainty about how these matters will be resolved. as you recall, market volatility spiked and confidence fell last summer, in part as a result