amando m tetangco, jr : accounting reforms towards good corporate governance speech by mr amando m tetangco, jr, governor of the central bank of the philippines, at the 3rd asian accounting firms ( asnaf ) conference, makati city, 11 november 2005. * * * distinguished guests, ladies and gentlemen, good morning. i am deeply honored to be part of this gathering of accounting experts from the asia pacific region. i understand there are also delegates from europe, particularly france and belgium. i wish to join asnaf chair cherry bernaldo in welcoming all of you to manila. this is a rare opportunity to be with the movers in the profession who are at the forefront of the crusade of coping with the accounting evolution happening globally. to the men and women who continue to heed the call to serve in this noble undertaking, we salute you. the accounting profession has truly evolved into a vital catalyst of global convergence particularly with the adoption of the international financial reporting standards ( ifrs ). the twin objectives of the new standards of promoting transparency and comparability in financial reporting transcends all regional boundaries and redounds to a greater cause of enhanced corporate governance and oversight. the philippines believes in the cause of adopting uniform accounting standards across the globe. we have expressed an unyielding commitment to the international community that these standards will be implemented in the country for the year 2005 and the bangko sentral ng pilipinas is spearheading its adoption in the financial industry. let me share with you our valuable experiences in adopting the standards in the financial industry. adoption of ifrs in the financial industry – the philippine experience it is fitting to say that the new accounting standards are a phenomenon. the changes infiltrated the backbone of financial reporting, which affected the way transactions are recorded and reported. the old school ’ s concept of conservatism and materiality were overshadowed with new thoughts on fair valuation and substance over form. the new accounting standards modified our paradigm in evaluating the financial position and performance of institutions. in addition to the already difficult task of adopting the standards, the bsp also has to contend with the difference in perspective between the principles of ifrs and the regulatory bodies. a popular example of which is the concept of loan provisioning wherein the ifrs provides losses on financial assets based on an incurred loss concept while the regulators provide losses based on incurred and expected loss concepts. another contentious provision of the standards is the fair value option, which

* national cbd market % % * excluding hobart and darwin source : jll research the residential market is also a mixed picture. our biggest cities have been more affected than others by the slowdown in population growth. they have also been more directly affected by the virus. as a result, prices in sydney and melbourne have fallen over recent months, while they have risen in most other cities. it is also noteworthy that in some states, the markets in our regional towns and cities have been stronger than those in the capital cities. for example, while prices have fallen in sydney they have increased in regional nsw ( graph 6 ). many regional centres have been less affected by the virus and some are experiencing increased demand as people work remotely and look for property outside the big cities. graph 6 housing price growth six - month - ended annualised % % new south wales capital city regional - 10 % - 10 % victoria - 10 - 10 - 20 - 20 sources : corelogic ; rba within the capital cities, the markets for houses and apartments are also performing quite differently. in most cities – especially sydney and melbourne – rents for apartments are falling, while rents for houses are generally rising ( graph 7 ). the apartment markets are more affected by the lower population growth and fewer foreign students and by young adults staying at home with their parents. there has also been an increase in demand for houses as people work from home. graph 7 advertised rents growth six - month - ended annualised % houses sydney % melbourne - 10 - 10 apartments and townhouses brisbane % % perth - 10 - 10 - 20 - 20 sources : corelogic ; rba as i said, it is a complex picture and the full effects of the pandemic will take time to be evident in our property market. to date, the demand from investors in residential property has been subdued, but it is possible that low interest rates will change this. this is one of the many areas that we will be watching carefully in the period ahead. attitudes to risk the fourth area where the pandemic is likely to leave a mark is on our attitude to risk. while it is not possible to be definitive here, i expect that for a time, people will be more cautious in their borrowing and spending decisions. as we all know, 2020 has been a sobering year. given this, it is probable that some people will want bigger buffers in future in case things go wrong. they might also be less inclined to lever up and be more cautious