amando m tetangco, jr : improving financial literacy and increasing financial inclusion to sustain economic growth speech by mr amando m tetangco, jr, governor of bangko sentral ng pilipinas ( bsp, the central bank of the philippines ), at the sharephil ’ s ( shareholders ’ association of the philippines ) 7th general membership meeting and forum on “ improving financial literacy and increasing financial inclusion to sustain economic growth ”, manila, 5 november 2014. * * * i am delighted to join you for your 7th general membership meeting. for this afternoon, i have been asked to speak on improving financial literacy and increasing financial inclusion. these are critical advocacies of the bsp and i would be more than happy to share my thoughts on these intertwined issues and how these could translate to sustaining economic growth. but before i get to this topic, let me also express how much i truly welcome the efforts of sharephil in making the investing public aware of their rights, duties and responsibilities as stockholders of corporations and institutions. one cannot overemphasize how valuable this agenda is. after all, the rights to information, to speak and be heard, and for redress are inherent rights of all shareholders – whether majority or minority. this agenda therefore makes inclusiveness, or more specifically, financial inclusiveness, a desired public good. challenge of execution economics tells us that public goods are socially desirable outcomes for which private funding is limited. as such, the real challenge to the public good that is “ financial inclusion ” must certainly be one of execution. financial inclusion is a key advocacy of the bsp as it is complementary to our mandate of maintaining price and financial stability. financial inclusion carries with it the potential to equalize opportunities across segments of society and reduce the economy ’ s vulnerability to financial distress. in the bsp, we define our financial inclusion agenda around a three - pronged framework – access to financial products and services, financial education and literacy, and financial consumer protection. each of these has a distinct contribution to achieving our objective just as each one is inherently intertwined with the others. the actual execution of our financial inclusion agenda can be likened to that of a ladder. broadening access to financial products and services : at the first level / step, we would want to bring in more savers into the formal financial system. this is financial access. we achieve this principally by strengthening the banking / financial regulatory framework. this includes our efforts in terms of

well informed in economics and finance is a more effective partner of the bsp in maintaining the effectiveness of monetary policy as well as in ensuring a stronger and safer banking and payments system. at the same time, a knowledgeable citizenry is able to contribute more meaningfully to economic development and benefit better from the opportunities that development brings ”. extending the scope of financial consumer protection at each of the steps, the bsp recognizes that risks and opportunities can transfer between the consumers of and the providers of financial services – between the borrower or investor and the financial intermediary. therefore part of our framework is to ensure that financial consumers are amply protected. to walk this talk, the monetary board approved earlier the adoption of the financial consumer protection ( fcp ) framework to institutionalize consumer protection as an integral component of banking supervision in the country. the new framework has been crafted based on the fundamental tenets of consumer empowerment, market conduct and collective responsibility. the framework reflects the bsp ’ s own commitment to ensure that bsp - supervised financial institutions develop a culture of fair and responsible dealings while continually protecting the welfare of financial consumers. our fcp framework embodies five consumer protection standards of which ( 1 ) fair treatment and ( 2 ) disclosure and transparency are consistent with the core values of sharephil. we hold our covered institutions to a standard of market conduct which similarly aligns to your vision of accountability. and certainly not the least, financial education is another of the five standards which aligns with the investor education initiative of the current leadership of sharephil. translating financial inclusion to economic growth i hope i have been able to illustrate to you that the bsp framework on financial inclusion is a holistic process that goes beyond providing information. but we do not kid ourselves. we realize that it is, as the oecd principles of financial literacy say, “ a lifelong, on - going, and continuous process that needs to take account of the increased complexity of markets, varying needs at different life stages, and increasingly complex information ”. one should not be surprised then that the changes may seem “ incremental ” in nature. this does not suggest that the process is not taking hold. instead, it does show that the change is taking shape and that these small changes may have much larger effects than we can immediately see. more broadly, we would like to see this financial ladder get wider as more of our citizenry are able to hop on … and reach greater heights as the resulting economic