of the organization. • risk managers must address corporate governance issues and contribute to improved corporate governance. the increased anxiety among shareholders due to the celebrated cases of accounting scandals and corporate bankruptcies have highlighted the need for good corporate governance. corporate governance has become an issue for a growing number of risk managers who are now given an active role in managing corporate governance standards. risk managers are therefore expected to address corporate governance issues and contribute to improved corporate governance to prevent losses and enhance long - term sustainability of the organization. • risk profession must embrace good business ethics. allow me to tackle this subject by way of enron ’ s experience with risk management. enron maintained a risk management function with capable employees. lines of reporting were reasonably independent in theory, but less so in practice. the group ’ s mark - to - market valuations were subject to adjustment by management and in this context, the mark - to - market accounting became a mark - to - model accounting. the traders who were performing the trades, too, had considerable influence on how the deals were marked - to - model. with their bonuses depending upon the profitability of the deals, there was an unaddressed conflict of interest. trading businesses were generating considerable profits, but much of these were dubious mark - to - model profits. enron maintained a fluid workforce. employees were constantly on the lookout for their internal transfer. those who rotated through risk management were no different. a trader or structurer whose deal a manager scrutinized one day might be in a position to offer that risk manager a new position the next. astute risk managers were careful not to burn bridges. risk managers knew that they would suffer if they blocked deals or did not support the favorable management - approved mark - to - model valuations. even worse, risk managers were subject to enron ’ “ rank and yank ” system of performance review. under that system, anyone could contribute feedback on anyone, and the consequences of a bad review were high. risk managers who blocked deals could expect to suffer in “ rank and yank ”. risk management, thus, became little more than a rubber stamp and a stepping stone for employees moving around the company. the enron ’ s case clearly describes the importance of ethics in risk management profession and the consequences of the lack of it. a code of ethics which sets forth a discipline of moral duty and conduct in support of the demanding standards of risk management profession must necessarily be in place. at the minimum, the code of ethics should

amando m tetangco, jr : prospects and challenges in 2010 – the bond market in the context of the philippine economy? speech by mr amando m tetangco, jr, governor of the central bank of the philippines ( bangko sentral ng pilipinas ), at the bloomberg conference " gearing for 2010. ensuring profitability. containing risk ”, makati, 4 november 2009. * * * a few days ago, i had the occasion to speak before an international body of asian bankers. there, i shared my views about the future of the regional banking market and specifically raised product and policy issues that confront asia today. these are the concerns that arise if we are to move forward as a banking hub underpinned by the region ’ s vast economic potential. i join you this afternoon to focus in particular on the philippine situation. instead of providing you with the usual parameters that come with a macro prognosis, allow me instead to discuss the bond market in the context of our broad macro - financial situation. this would be our natural recourse given the inherent relationship between interest rates and fixed - income valuation on one hand and between economic activity and capital - raising on the other. when structure translates into operations to talk about the philippine bond market necessarily means talking about the philippine government securities ( gs ) market. in addition, it is probably not much of an exaggeration to argue that the local bond market is inherently linked to fiscal policy. over the last 5 decades, the national government has found itself in a budget deficit position, with the exception of 5 fiscal years. the ng funds the deficit principally by the issuance of domestic gs. of course, as the country ’ s macroeconomic fundamentals improved, the ng has also been able to tap the international capital market for portion of the budgetary requirement. nevertheless, domestic funding remains the primary funding source to a ratio of more than two - thirds of total borrowing mix. relative to the size of the economy, outstanding gs accounted for about one - third of nominal gdp as of end 2008. this basic structure translates into a challenging operating framework. to be sure, the national government has every interest to bring down its cost of borrowing. yet in the same token, it is also the most active borrower in the market. one added feature that can readily be seen from the data of the btr is that gs issues thru adaps have been predominantly in the form of treasury bills, accounting for 58 % on