with the dynamism that has characterized this industry in the last decade. together, you have achieved much ; but you should not rest on your laurels. we still have a long way to go in terms of reaching out to many more of our entrepreneurial poor. the challenge for rural banks, therefore, that are at the forefront of our microfinance movement, is to further widen and deepen the reach of microfinance to liberate our industrial entrepreneurial poor from poverty. this challenge can be surmounted by strong and vibrant banks that are committed to continuously upgrade their capacity, uphold performance standards, and adhere to best practices at all times. key areas of governance, efficiency, risk management, sustainability and quality of operations should be continuously developed and strengthened. this should lead to sound and well - managed institutions that can take advantage of market opportunities while adequately managing associated risks. in this regard, mabs banks seem well positioned to take on this challenge. anchored firmly on your commitment to sustainable microfinance, we have seen how your policy of zero tolerance to delinquency, emphasis on adequate internal controls and investments in systems and human capacities have resulted in positive gains for your member banks. on the part of the bsp, we will continue to look at ways in which banks can have a wider scope for their microfinance operations. we will remain responsive to the changing demands of the industry by maintaining a positive enabling policy and regulatory environment for microfinance. in addition, we will continue with our major reforms toward a more robust financial system and in fostering greater competition aligned with international standards within our banking sector. our regulations will continue to focus on critical areas of strengthening board and institutional governance, improving bank ’ s balance sheets and upgrading risk management systems. we at the bangko sentral look forward to continuously working with rbap to achieve our common goal of local economic development by creating opportunities for entrepreneurship, nourishing local enterprises and building prosperity in the countryside through microfinance. thank you all and good morning. mabuhay ang microfinance!

also capitalizing on proven technologies and methodologies of microfinance to conceptualize, design and deliver other types of financial products. one example of such product is the micro - agri product, or map, which was designed and pioneered by the mabs member banks present here today. you recognized the possibility of combining the best practices of microfinance with the salient features of agricultural finance, to develop a product that is responsive to the needs of the agriculture sector, specifically the poor farming households. the bangko sentral supported this innovation and, after a thorough product evaluation, allowed microagri loans to be classified as microfinance loans. in so doing, micro - agri loans today enjoy the same benefits as microfinance loans … including no collateral requirements, cash flow and character based lending, small and frequent amortizations, as well as simple documentary requirements. through map, therefore, we have addressed the hurdle typically faced by small farmers when accessing financial services to grow their production and expand their economic activities. advances in technology are also providing new vehicles for the delivery of microfinance services. the use of mobile phones in select microfinance transactions is a specific example. once again, our rural banks are at the forefront of this undertaking, developing a revolutionary solution for low value payments that characterize microfinance loans, through linkage with electronic cash platforms of telecommunication companies. in fact, as of end march 2007, there were already 43 rural and cooperative rural banks offering electronic banking services particularly mobile phone banking. this lowers transaction costs, increases productivity, minimizes cash - on - hand risk, and increases over all accessibility of financial services. in a country like ours where mobile phone usage is one of the highest in the world relative to population, the potential for revolutionizing electronic banking in the countryside could be dramatically significant. in fact, a concept paper of the mabs and globe telecom outlining the expansion and rollout of mobile banking applications to microfinance clients of mabs participating banks has been selected for support under the consultative group to assist the poor technology program. the president of the global development program at the bill and melinda gates foundation said that by “ … supporting pilots with new technologies that have the power to dramatically change the business model of delivering financial services, we can help expand access to financial services for hundreds of millions of poor people. ” as proposed, the mobile phone banking applications will convert mobile phones into “ virtual wallets ” for receiving and paying loans,