is less vulnerable to global economic shocks. ladies and gentlemen. last year our economy posted the best gdp growth in 31 year. one of the reasons for this is strong investor confidence in our country, as a viable emerging economy. this was coupled with the 2. 8 average inflation rate in 2007, which was the lowest in 21 years. other indicators likewise exhibited stronger economic positions such as the country ’ s balance of payments, which posted a record surplus of usd 8. 6 billion in 2007 and our all - time high level of international reserves. as for the banking sector, it remains fundamentally sound with the average capital level well above the minimum regulatory requirement and the npl ratio that is now almost back to the 1997 pre - crisis level of around 4. 0 percent. the rcbc group in particular, has shown marked improvement in performance as it posted a net income for the year ended 2007 which was 50 percent better than the previous year ’ s level. further, we take the bank ’ s recent issuance of p7 billion worth of unsecured subordinated debt as a sign of bank ’ s commitment to further strengthen its capital base as it assumes new risk exposures. rcbc ’ s sme lending program is anchored on the theme “ banking on emerging corporates. ” this signals the belief and confidence of rcbc ’ s leadership in the future of smes to become growth drivers of the philippine economy. i believe you are on the right track. i hope this will steer the tempo of competition in the banking industry as it opens diversification of possible sources of income for banks. indeed, the challenge of setting a footprint on sme lending is a milestone rcbc and other banks should take, as its contribution in providing a strong foundation for sustained and broad - based economic growth for our country. again, my congratulations to rcbc. mabuhay!

conditions and interest rates that can reach over 1, 000 percent a year. with the csf providing guarantees to banks for loans extended to their coop members, msmes gain access to bank loans at much lower interest rates. as monitored by the bangko sentral ng pilipinas, loans granted under the csf program range from 8 – 12 % a year, a fraction of the cost of borrowing from informal lenders! this is the reason why the bsp has been working on promoting financial inclusion across the country for over ten years now. in july this year, the bsp and 12 other government agencies launched the national strategy for financial inclusion ( or nsfi ). our objective is to avoid duplication and to ensure optimum results from our collective efforts and deployment of resources in extending the reach of our financial system to the unserved and the underserved. this milestone event was also highlighted by the visit of queen maxima of the netherlands who attended the launching with a commitment of assistance and partnership not only from the netherlands, but also from the united nations, in her capacity as the designated un secretary general ’ s special advocate for inclusive finance for development. as described by queen maxima, “ the philippines should be the voice on financial inclusion. ” indeed, our bis central bankers ’ speeches financial inclusion program is considered an international best practice model. through the nsfi, we envision a regionally - responsive, development - oriented and inclusive financial system that provides for the evolving needs of a diverse filipino public. one of the priority areas of concern in the nsfi is access to credit, which is being addressed through this csf program. our survey early this year indicated that about 47 percent of filipino adults borrow money and most of them access loans from informal sources such as family members and informal lenders. only a few obtained credit from formal institutions such as lending / financing companies ( 12 % ), cooperatives ( 10. 5 % ), microfinance non - government organizations ( ngos ) ( 9. 9 % ), and banks ( 4. 4 % ). nevertheless, more than 85 % of respondents indicate that they want to access financial services from formal financial institutions. one restrictive consideration in borrowing money is the lack of collaterals. this can now be addressed through the credit surety fund, which serves as an alternative security in place of conventional collaterals. you will be pleased to know that our csf program is on the agenda of the apec summit. during the