provide financing needs in the areas of agriculture and housing, among others. in the philippines, practitioners have developed the micro - agri product and more recently the breakthrough housing microfinance product which the bangko sentral recognizes as variations of a microfinance loan. indeed, we continue to innovate because the financing needs of microfinance clients go beyond simple business loans. with more appropriately designed loan products, microfinance institutions are now able to respond to the varied needs of their clients, diversify their portfolios, and reduce the risk of business loans applied to agriculture or housing. parallel to the development of products offered by microfinance institutions, significant changes are also taking place in their delivery channels. microfinance institutions are increasingly recognizing how information and communication technology can provide revolutionary channels to better serve existing clients or an opportunity to reach new ones. these new channels – such as mobile phones, automated teller machines ( atms ) and point of sale ( pos ) card readers – have also brought with them significant improvements in efficiency and convenience, while lowering costs for both the microfinance institutions and their clients. in the philippines, for instance, rural banks have tied up with mobile phone companies to facilitate microfinance loan payments, deposits, and withdrawals through a simple sms or text message. in other words, the microfinance landscape in our country continues to evolve … in step with client needs and innovations in technology and the regulatory framework. the challenge before us is to further broaden and deepen the reach of microfinance in the philippines. at the bangko sentral, we accept this challenge and commit to uphold an enabling policy and regulatory environment that will allow microfinance to flourish further. we will continue to monitor the many developments and innovations taking place in the world of microfinance so that we can maximize the benefits we can derive from it. to strengthen our capacity in this regard, we have organized a special unit which we call inclusive finance advocacy, to explore and facilitate the development of new options to improve and increase access to financial services of our people. we have also created a microsme finance specialist group in our supervision and examination sector for banks with significant exposure to micro and sme lending. this group has been trained on riskbased supervision and the peculiarities of lending to the msme sector. i should add that these initiatives of the bangko sentral toward broader financial inclusion will continue to be guided by a high - level microfinance /

a body of recent research has suggested that global interconnectedness may not have enhanced the shock - absorbing role of floating exchange rates, but rather eroded it, or at least modified it in many ways. if this is confirmed, we may have to modify the prior that under flexible exchange rates, economies become more resilient, when each of them becomes more open. and finally, there is a paradox of international financial integration : as raghu rajan famously suggested, for all its theoretical appeal, financial development may have “ made the world riskier ”. 1 academics have questioned the resource allocation and risk - sharing benefits of cross - border capital flows ; capital controls, or as recently dubbed capital flow management measures, are once again part of the policy discussion ; and financial deglobalisation, some indicators say, may be already under way. can we let this happen with a light heart? or can we shape financial regulation and other policies so as to keep reaping the benefits of global financial integration? the way in which we address these open issues will condition the resilience of the global economic system, i. e. its capacity to return to equilibrium without policy intervention. this is of key importance for central bankers. if we ignore these issues, there is a risk that monetary policies may become ineffective, overburdened, and / or collectively trapped in suboptimal equilibria. although my remarks today are focused on international adjustment, the challenges faced by the euro area – as a “ microcosm ” of the global economy – can provide useful insights. global growth : the fallacy of composition my first point is motivated by the ongoing discussions about economic policies that can incentivise sustainable growth globally. this matters for central banks locally because monetary policy cannot do all the heavy lifting of stabilising our economies in place of other policies ; and it matters globally, to avoid low global growth encouraging central banks to adopt beggar - thy - neighbour policies. see rajan, r. ( 2005 ), “ has financial development made the world riskier? ” nber working papers, 11728. bis central bankers ’ speeches in principle, the process of opening global markets – or globalisation – should make global growth more resilient by allowing policymakers around the world to factor in external demand when designing their growth strategies. if global business cycles are not fully synchronised, external demand acts as an automatic stabiliser – economies in downswings can