a regulatory environment that allows digital transformations to thrive. at the same time, we are mindful of attendant risks and any unintended consequences that technological innovations may bring, especially when it comes to consumer and data protection. because of this, a deliberate part of our strategy is to further deepen our financial education and consumer protection initiatives. this balanced regulatory approach is anchored on the core principles of risk - based, proportionate and fair regulation ; active multi - stakeholder collaboration ; and, consumer protection. these principles are pragmatically implemented through our flexible “ test and learn ” approach in dealing with increasing digital transformations in the financial system. this provides an opportunity for fintechs to participate in the financial system thru collaborations with banks and other financial industry players to achieve greater scale, within the regulatory environment established by the bsp. in addition, we are likewise coordinating and cooperating with other domestic and foreign regulators for possible information sharing and referral system especially focused on fintech firms. the ultimate objective of our regulatory approach to digital transformation is to be aware of risks and employ mitigating actions as needed, but only in a manner that also allows benefits leveraging on these innovations. in the last three years, the bsp has been preparing the groundwork for an expanded digital finance ecosystem, one marked by diversity of players responding to the varying needs of businesses and individuals, especially those that have been traditionally unserved. we issued rules to open up the electronic payment rails to more players, ( cir. 980 and 1000 ) ; provided guidelines on virtual currency exchanges as an emerging alternative remittance business model ( cir. 942 and 944 ) ; allowed banks to exponentially expand reach by tapping ubiquitous retail outlets as cash agents ( cir. 940 ) ; and provided greater clarity on customer onboarding for low - risk clients who need formal financial services but lack conventional 2 / 4 bis central bankers'speeches identification documentation ( cir. 950 and 1022 ). bsp legislative advocacies bearing fruit while these issuances have helped create an enabling environment for innovations to flourish, bsp recognizes that ushering the country to a new era of digital transformation and inclusive growth requires new regulatory tools. with the commitment and perseverance of my predecessors as well as the support of our lawmakers and the national government, our legislative advocacies have borne fruit with the passage of the landmark laws for the financial system. in october 2018, republic act ( ra )

depositing and withdrawing money, sending and receiving remittances, purchasing and selling goods and services and making bills payments. the mabs - globe telecom proposal was one of nine selected from more than 70 projects submitted from 38 countries. nevertheless, even as the bangko sentral is responsive to these new developments and technological innovations, it continues to ensure that attendant risks are properly managed. thus, the bangko sentral has set in place the necessary regulations and procedures that cover electronic banking risk management, security procedures, internal controls, anti money laundering regulations, know your client requirements, as well as consumer protection. we have even created, within our supervision and examination sector, a core information technology supervisory group ( citsg ) to keep abreast with the latest developments in electronic banking. in parallel with the bsp ’ s liberalized branching regime, these technological innovations should enable banks to widen and deepen its reach to unserved and underserved bank clients in both rural areas and urban centers. there are other products using microfinance methodologies and technologies that are gaining interest. in our case, we at the bangko sentral ng pilipinas are reviewing the provision of housing microfinance, which can boost the financing needs of the low cost housing sector. finally, we recognize the increasing participation of large commercial players in the microfinance industry. we are seeing commercial banks and social investors providing loans, equity or assistance to retail microfinance institutions. these new linkages and partnerships should lead to a wider range of products, broader distributions systems, development of local currency capability and ability to hedge foreign currency by mfis, local capital market development for microfinance, and finally put microfinance in the economic mainstream. at the bsp, we are looking at various ways through which these partnerships can be fortified. we have conducted networking meetings between commercial banks and retail institutions ; we have also responded positively to requests from various interested parties to learn more about the intricacies of microfinance operations. and late last month, we issued circular 570 which recognizes microfinance loans of commercial banks to non - bank microfinance institutions as alternative compliance to the mandatory credit allocation of 6 % to small enterprises. this is an important incentive for banks to provide more wholesale loans that will increase the microfinance operations of retail institutions. indeed, exciting developments are happening in the microfinance sector. i am pleased to note in particular that mabs banks have kept in step