nestor a espenilla, jr : going back to basics speech by mr nestor a espenilla, jr, governor of bangko sentral ng pilipinas ( bsp, the central bank of the philippines ), at the 2018 mcpi annual conference, manila, 26 july 2018. * * * honorable sec chair emilio benito aquino, citibank philippine country head aftab ahmed, mcpi chair fr jose victor lobrigo, fellow microfinance stakeholders, distinguished guests, ladies and gentlemen, it is a pleasure to be with you today for the 2018 mcpi annual conference and the launch of the 16th citi microentrepreneurship awards. as we gather here today, the digital revolution is fundamentally reshaping the financial inclusion landscape and traditional financial value chains. rapid digital innovations in financial technologies have led to the emergence of new market players and more dynamic business models. given this backdrop, what does your theme “ going back to basics ” mean to the philippine microfinance industry? keeping things simple it can be a lot of things. “ going back to basics ” can be about mfis fully embracing and welcoming this new operational reality. after all, you were once the original “ disruptors ” in the delivery of microfinancial services more than 20 years ago! you had pioneered the bold and novel idea that challenged mainstream thinking – that the poor could be as creditworthy as the rich. “ going back to basics ” can also mean stepping back in order to further strengthen foundations – returning and reinforcing your core values and fundamental objectives. to revisit what has made microfinance work in the first place … to what made it stand the test of time. going back to basics can also be about keeping things … simple. and with this i mean having, first, integrity – by conducting all our dealings fairly and honestly. mark twain wrote, “ if you tell the truth, you don ’ t have to remember anything ”. integrity is doing what is right. we should ensure that all transactions with our customers and other stakeholders are open, transparent, fair and ethical. second, having a sound corporate governance. this leads to achievement of our organization ’ s fundamental goals and objectives and attainment of long - term sustainability. sound corporate governance is not just about simply conforming to the basic tenets of transparency and accountability. it is about instituting a culture that drives and creates value for our businesses and clients by safeguarding the interests of our stakeholders

time, increasingly less constrained by the limits of physical bulk. more recently, we have found ways to unbundle the particular characteristics of each good and service to maximize its value to each individual. that striving to expand the options for satisfying the particular needs of individuals has resulted in a shift toward value created through the exploitation of ideas and concepts and away from the more straightforward utilization of physical resources and manual labor. the new thrust has led to structural changes in the way that we organize the production and the distribution of goods and services. it has increased the demand for, and the compensation of, workers who have the ability to create, analyze, and transform information and to interact effectively with others. most important, it has accorded particularly high value to the application of advanced computer and telecommunications technologies to the generation of economic wealth. at the same time, however, the consequences of technological advances and their implications for the creation of wealth have become increasingly unpredictable. we have found that we cannot forecast with any precision which particular technology or synergies of technologies will add significantly to our knowledge and to our ability to gain from that knowledge. even if future technological change were to occur at a steady rate, variations in our capacity to absorb and apply advances would likely lead to an uneven rate of increase - over time and across individuals - in returns to expanded investment in knowledge : supplies of appropriately skilled workers can vary. in some cases, the initial choices in the exploitation of advances may turn out to be sub - optimal. in other cases, the full potential of advances may be realized only after extensive improvements or after complementary innovations in other fields of science. as we consider the causes and consequences of inequality, we should also be mindful that, over time, the relationship of economic growth, increases in standards of living, and the distribution of wealth has evolved differently in various political and institutional settings. thus, generalizations about the past and the future may be hard to make, particularly in the current dynamic and uncertain environment of economic change. we need to ask, for example, whether we should be concerned with the degree of income inequality if all groups are experiencing relatively rapid gains in their real incomes, though those rates of gain may differ. and, we cannot ignore what is happening to the level of average income while looking at trends in the distribution. in this regard, our goal as central bankers should be clear : we must pursue monetary conditions in which stable prices contribute to maximizing sustainable long - run growth. such disciplined policies will