amando m tetangco, jr : rbap - mabs – providing wider and deeper access to microfinance speech by mr amando m tetangco, jr, governor of the central bank of the philippines ( bangko sentral ng pilipinas ), at the celebration of the rural banking industry ’ s 10 years of success in microfinance under the rbap ’ s mabs program, manila 13 june 2007. * * * hon. secretary cerge remonde, ambassador kristie kenney, general william hotchkiss, members of the rural bankers association of the philippines, fellow central bankers, special guests, good morning. on behalf of the bangko sentral ng pilipinas, i congratulate the rural banks, the usaid, and other enabling institutions represented here today as we celebrate ten years of success in providing microfinance services under the microenterprise access to banking services program. indeed, the rbap - mabs partnership is a successful empowering program that continues to bring much needed financial services to clients in the countryside. for a country like ours where roughly 99 % of total enterprises are micro, small and medium enterprises or msmes, which in turn employ about 70 % of our workforce, a successful program such as mabs is bound to have a significant impact. beginning with the first loan disbursed by the rural bank of sto. tomas ten years ago, mabs banks have since disbursed more than a million loans to over 350, 000 borrowers, spurring the growth and development microenterprises and, in the process, transforming lives and communities for the better. surely, we should celebrate milestones such as this. at the same time, this ten - year milestone compels us to assess how we can deliver appropriate microfinance services in an even better and more cost - efficient manner to more of our country ’ s entrepreneurial poor. fortunately, recent developments in the industry are opening new opportunities and presenting us with interesting possibilities that can lead to revolutionary ways of providing better microfinance services. first among these developments is the changing face of microfinance itself. gone are the days when microfinance was synonymous only to microcredit or small loans. today, microfinance institutions are providing a wide range of financial services to their clients such as savings, remittances, transfers and, increasingly, micro - insurance. in addition, microfinance institutions are

corporate governance under circular 749. we want banks to put in place a compliance system that is best suited to their needs. while the circular establishes the senior role of the chief compliance officer, it is the compliance system that is truly the central feature of the policy direction. we are not interested in citing one - off deviations ; rather, we want to nurture a culture of compliance among our banks. this dovetails with the revised corporate governance framework … as approved recently by the monetary board. as you know, corporate governance is about managing the potential conflicts of interest that will invariably arise. the board of directors, board - level committees … as well as senior management … all have distinct roles to play in managing the conflicts of interest between handling public funds and deploying the same at a margin. independent directors, in particular, are increasingly critical components of a check and balance system that can oversee any breaches in agreed protocols … and maintain an appropriate system of compensation and rewards. at this point, i also wish to cite the valuable contribution of some members of the ctb to the bangko sentral ’ s stress testing program. by participating in this exercise, you provide us with a holistic view of potential system - wide effects from extreme events. we understand that tests – especially those conducted by regulators – can be daunting exercises. however, the gains we stand to make … are considerable. we look forward therefore to increased participation of more thrift banks in due course. ladies and gentlemen. the basel framework, the new circulars on compliance and governance, … and the stress tests …. will serve as catalysts for change in your banks. certainly, change is not easy ; on the other hand, standing still is not an option. we either innovate … or stagnate. today, in your convention, i hope you will maximize the opportunities available to you to identify possible areas for improvement, … for streamlining, … for upgrading, … and for innovation. as i look around, i see many familiar faces. to me, this is a welcome sight : it tells me that the industry is in capable hands. at the same time, i also see new faces who should bring fresh perspectives to the sector. this mix of seasoned and fresh bankers is bound to keep the thrift bis central bankers ’ speeches banking sector innovative, exciting and dynamic. yes, innovative, exciting and dynamic – the opposite of complacent. indeed, there should be no room for com