benjamin e diokno : the importance of transaction accounts for employee closing remarks by mr benjamin e diokno, governor of bangko sentral ng pilipinas ( bsp, the central bank of the philippines ), at the financial inclusion forum for the labor sector, manila, 18 november 2019. * * * director bacay and officials from the department of labor and employment ( dole ), leaders and convenors of the various tripartite industrial peace councils ( tipcs ), representatives of associations of informal workers and kasambahays, our partners from digital financial service providers, my colleagues from the bsp, dear friends from the labor and employment sector, ladies and gentlemen, a pleasant day to all of you. i trust that this morning ’ s presentations and discussions were informative and productive. to start, we gave everyone an overview of bsp ’ s financial inclusion agenda and digital payments initiatives to put in context our call to promote the use of transaction accounts for payments of salaries. our speakers from the financial service providers also shared practical and actionable ideas on how their products can meet the needs of both wage earners and their employers. i hope these presentations have not only armed you with knowledge, but also inspired you to help become our partners in financial inclusion, particularly through the use of transaction accounts for payment of wages and salaries. nonetheless, allow me to drive home a few more insights on financial inclusion and digital payments. digitalization is rapidly and significantly transforming the way we do things in so many aspects of our lives. we are now able to shop, book a vacation adventure, get a cab, sell goods, watch a movie, wherever and whenever, without having to leave the house and stepping into a physical store. the mobile phone has become such a powerful tool, an almost all - in - one instant access to any type of service one might need. based on the september 2019 global webindex report, there are more than 69 million internet users aged 16 – 64 years old in the philippines. of this number, 91 % searched online for a product and 62 % made an online purchase via a mobile phone. from the same study, 67 % of filipinos have an active social media account. the digital life is upon us, and we can harness this to make sure internet access and mobile phone ownership do not only lead to better social connections and convenient shopping, but also and more importantly, to greater ability for all filipinos to use welfare - enhancing financial

? i think that it can be a substantial sum. what kind of return are we getting from these savings? what we perhaps need to strengthen is our investment side of those savings. and this is in my view where the capital market can help out. it can bring us closer to other forms of investment. i also note that most of the provincial companies are engaged in the building and rental of office complexes. funding is mainly through bank long term loans. loan repayments are made from rental income and contributions. again, the capital market can provide a viable option to funding these projects. financial performance let me end with three related issues on investment : • the first is the concept of the real cost of capital. provincial companies fund a lot of investment through “ soli ” which is given free of interest. if we had borrowed these funds what would be our total cost of capital? • second, records from the registrar of company ’ s office revealed very little information on the financial records of provincial companies. is governance an issue? we all know that financial management and accountability are extremely important to business and i see that you will be addressing these issues during the workshop. • third, what is the shareholder ’ s return on these investments? • lastly, can we learn from the past? i think we can and we should. the recent offering of the yatu lau company limited is very interesting. i will follow the current public float of $ 1. 5 million with interest and wish the company every success. i note that the company has put in place sound governance structures to ensure that the business of the company is separated from the business of the provincial council concluding remarks finally, i would like to sincerely thank mrs. mereia volavola for her kind invitation. i also wish to thank all the presenters who have given up their valuable time from their busy schedules to share their knowledge with the participants today. official opening i now have much pleasure in declaring this workshop for provincial and investment companies “ capital markets – growing your company ” open. thank you.