so far and the ample policy space these provide us, we are not immune to the continuing volatilities in the external front. the risks that we are currently monitoring closely include the following : 1. intensification of the euro - area debt crisis. just when we thought the european authorities are on the way to a resolution, the problem in cyprus crops up. 2. any further delay in the resolution of fiscal issues in the us. bis central bankers ’ speeches 3. continued surge in capital flows to the emes, including the philippines, resulting from the continued low interest rates and weak economic prospects in europe and the us. friends, let me assure you that the bsp stands ready to pursue policy measures to deal with these downside risks from external sources. but the bsp and the government cannot do this alone. the government needs the support of the private sector of an organization such as this federation. ffcccii and the government : forging stronger ties toward sustaining growth momentum how can the ffcccii help? just as i have mentioned four major sustainability factors that support economic growth in the country, let me mention four key areas where the members of your federation can help in sustaining the momentum of high growth - low inflation. 1. participation in the infrastructure program of the government, particularly the public - private partnership ( ppp ). given the relatively wide scope of industry sectors that ffcccii members belong to, the ffcccii could encourage more of its members to engage with the government in pursuing vital infrastructure projects for the country. enhanced infrastructure would boost the country ’ s business climate, which in turn would help generate more jobs. more jobs mean improved spending capacity for more filipinos which would lead to higher consumption. indeed, a win - win situation for both the private and the public sectors. 2. investments in the export sector. there have been concerns that the philippines may be over - reliant on remittances from overseas filipinos in terms of financing its foreign exchange needs. one of the strategies that is needed for this country to promote a sustainable external position is through increasing investments in the export sector and enhancing competitiveness as well as innovativeness in this sector. given the widely diversified and geographically dispersed profile of ffcccii members, the federation could definitely encourage more of its members to invest in developing new export - viable products. 3. development of a strong industrial base. another project that the ffcccii could further promote is the

structural components of the islamic financial system, comprising the islamic banking industry, the takaful industry and the islamic money and capital markets. the intra - dependency of these key components creates the enabling environment for the islamic financial system to effectively perform its role as an efficient conduit for mobilizing resources and channeling the funds to finance productive economic activity. the absence of any particular component could reduce the effectiveness and efficiency and thus affect the viability and sustainability of the system. while the islamic banking system has an important role in mobilizing deposits and providing financing, the islamic capital market has an equally important role in providing a stable source of long - term funds for financing large investments and development projects as well as for capital and business expansion. the development of the islamic capital market not only allows for a more balanced allocation of financial and economic resources within an economy but more importantly, ensures greater diversification of risks within the islamic financial system. this enhances the resilience and robustness of the islamic financial system to withstand financial shocks and contributes to the overall stability of the islamic financial system. in terms of the development of our islamic financial system, as at june 2004, the assets mobilized by the islamic banking sector have increased to rm89. 1 billion, accounting for a market share of about 10 % of the banking system. at the same time, deposits have also increased to rm64 billion, constituting a market share of 10. 4 % while financing mobilized amounted to rm54 billion to garner 11 % of the market share. product offerings have also increased in sophistication from the deposit products to hybrid products that are able to enhance returns to depositors. a further advancement was made with the introduction of the islamic variable rate financing mechanism that provides an alternative to the fixed - rate financing. this will assist the islamic banking institutions in mitigating part of the risks emanating from asset and liability mismatches. the islamic capital market, in particular, the islamic debt market, has also experienced rapid growth since its emergence in the 1990s. the issuance of islamic bonds has expanded steadily at an average growth rate of 33. 7 % since 1995. in 2003, the total funds raised via the issuance of islamic bonds amounted to rm8. 1 billion, constituting 19 % of the total funds raised in the bond market. new innovative islamic financial instruments such as islamic asset - backed securities have also emerged and the financial structures underlying islamic securities have become more diversified. the number of sha