’ s banking sector outlook survey for the first semester of 2019, forecast double - digit growth in assets, loans, deposits and net income for the next two years. they also project capital and liquidity ratios to be maintained well beyond bsp requirements. these, among other findings, highlight the bullishness in the growth of the economy and the banking system despite global uncertainties. strategy - wise, the bankers prioritize growing their business by expanding their client base, investing in technology, and developing new products. they also intend to optimize the use of technology in their operations and customer relations to better serve the public and at the same time, achieve strategic efficiencies in their operations. amid domestic and global uncertainties, the banks plan to reach their growth objectives by 3 / 7 bis central bankers'speeches developing new capabilities to cope with the competition and the digital revolution. they also intend to expand market reach across geographical and digital frontiers while leveraging on existing client relationships. the bsp ’ s strategic reforms in the past decades have been aimed at ensuring the safety, soundness and resilience of the banking system. specifically, these reforms are being pursued to ( 1 ) strengthen risk governance within banks ; leverage on technology in finance and the use of artificial intelligence, which encourages digital innovations to flourish while ensuring effective management of risks, including protection of consumers ; ( 3 ) achieve greater and broader access to financial services to enable most filipinos to benefit from the growing economy and banking system ; ( 4 ) uphold the integrity of financial system and safeguard the interest of the public ; and ( 5 ) accelerate capital market reforms, including foreign exchange initiatives. the amendment of the bsp charter in february 2019 provided the bsp with, among others, a strengthened mandate to promote financial stability in addition to its existing monetary stability function. the amended charter also strengthened bsp supervisory function over money service and credit granting businesses and payment system operators. the amended charter and the national payment systems act provide a solid legal mandate to the bsp over the payment systems. these put the bsp in a strategic position to address potential risks arising from the interconnectedness of banks and these financial entities. moreover, the new bsp charter embodies a package of reforms that will further align its operations with global best practices and enhances its capacity for crafting proactive policies amid rising interlinkages in the financial markets and the broader economy. the bsp envisions itself as a world - class monetary authority

and primary financial system supervisor that supports a strong economy and promotes a high quality of life for all filipinos. the dynamism of the economy and the strength of the banking system do not mean much if their benefits are not felt by most filipinos. thus, the bsp continues to advance its financial inclusion agenda with digital innovations as a catalyst and strategic enabler. digital financial inclusion refers to digital access and use of formal financial services by the unserved and underserved population. facilitating digital access means expanding the delivery of basic financial services through mobile phones, cards or the internet. such services should be suited to the customers ’ needs and delivered responsibly, at a cost affordable to customers and sustainable for providers. accordingly, the bsp has been gearing up for the development of a digital finance ecosystem that facilitates diversity of players catering to the various needs of the public, particularly the lowincome and financially unserved and underserved segments. such an ecosystem is built on three pillars : the first pillar deals with democratized access to a transaction account wherein every person is able to open an account and use digital financial services. to realize this, the bsp encourages banks to offer basic deposit accounts ( bda ) which meet the need of the unbanked for a lowcost, no - frills account. a basic deposit account features a low opening amount capped at p100, no maintaining balance, no dormancy charges, and simplified identification requirements. more importantly, bsp rules for validating client identity have been eased further by allowing the acceptance of the national id for the client on - boarding process. the bsp has also allowed covered institutions to implement reduced know - your - customer ( kyc ) rules for certain low - risk accounts and use technology for face - to - face contact requirements. the second pillar of the digital financial ecosystem refers to the establishment of an expansive network of low - cost touch points to serve the country ’ s financial intermediation needs. 4 / 7 bis central bankers'speeches notwithstanding the continuing growth of their offices nationwide, banks and other bspsupervised financial institutions ( bsfis ) are hard - pressed to establish physical presence in every location due to the archipelagic geography of our country. thus, the bsp has allowed banks to serve their clients through ubiquitous retail outlets which act as cash agents. these cash agents accept and disburse cash for, and on behalf of, the bank.