without relying only on the collaterals pledged against the credit. we have also streamlined the minimum capital requirement for banks so that it is tiered with the extent of their branch network. at the same time, liberalization of bank branching was undertaken so that banks can better make the business decision of how and where they wish to serve their target constituents. to round this out, we have likewise pursued the longstanding objective of developing our capital markets. recent amendments to our regulations address gaps, particularly in arriving at market rates for purposes of marking - to - market. these new interest rate benchmarking regulations should make pricing of bonds for capital build - up more transparent. all of these are done with the objective of making the regulatory environment more open to the business decisions of service and product providers. they broaden what can be achieved within the banking industry without unduly compromising the regulatory oversight for risks and conflicts of interest. this dovetails with the second facet of how we strike the balance between prudential limits and banks ’ decision - making ability. this is – liberalized access to the banking market. it is critical that our market is “ financially inclusive ” given the structure of the philippine archipelago. this means that access, products and policy have to generate the desired synergies so that we can equally respond to the needs of those traditionally underserved or underbanked. this is a key advocacy of the bsp, for which we could easily devote another forum. even if i limit myself today to the traditional banking market, so much has already happened of late. with the enactment of republic act 10641, we have increased the ownership ceiling of foreign banks to 100 percent from 60 percent, liberalized branching requirements and allowed foreign banks to participate in foreclosure proceedings of real estate properties. with capital infusion and market presence, the expectation is that the law would bolster the local banking industry through greater competition, and the benefits from the transfer of skills and technology. this liberalization of the entry of foreign financial institutions positions us well for the asean banking integration framework. but more than just abif, we have pursued and supported these legislative initiatives because a competitive globally - oriented banking industry is an essential portal for foreign investments. this, in turn, feeds off the investment grade rating we have obtained from international credit rating agencies. bis central bankers ’ speeches while liberalization has its advantages, we recognize that there may be potential issues such as the relaxation of credit standards in the pursuit of

the final stretch of the year in compensating for the recovery by civil servants of their extra payroll should also be recalled. let me now discuss the main items of the budget for 2014. since my appearance in parliament in early october, the overall information available on general government budgetary programming for 2014 has increased. this is most notably the case with the so - called 2014 budgetary plan, devised by the government in compliance with its reporting obligations to the european commission, derived from the legislative package on budgetary oversight approved last may. the plan includes information on overall general government revenue and expenditure for 2014, based on the draft budgets not only for central government and the social security system, as was habitually the case, but also for the regional governments. this information is necessary for making a proper assessment of the budget projection in spain, given the high degree of decentralisation of our public sector : in 2012, central government was responsible for 27 % of total consolidated public spending ; the social security system for 32 % ; the regional governments for 30 % ; and local government for 11 %. as i indicated here a year ago, this budget plan marks an important step forward : over time, this document is destined to play a key role in the overall programming of total public spending, with the dual aim of making the budgets of the different tiers of government consistent and offering this information in an accessible and transparent fashion to the public at large, analysts and institutions. the macroeconomic figures accompanying the 2014 budget project real gdp growth of 0. 7 %, as a result of the positive 1. 2 pp contribution of the external sector, offset in part by the negative contribution of national demand. these forecasts are prudent and in line with the above - mentioned central growth scenario and, broadly, with what may be inferred from the consensus reached by analysts. the deficit targets for 2014 are well - known and match those approved by the european council last july. the overall general government deficit should stand at 5. 8 % of gdp, 0. 7 pp down on the forecast for 2013. in terms of agents, an improvement of 0. 3 pp of gdp is considered for social security funds and the regional governments, to 1. 1 % and 1 %, respectively, while central government might post a deficit of 3. 7 % of gdp, compared with the figure of 3. 8 % projected for 2013 ; local government should run a balanced budget. the target for 2014 entails an improvement in