that tbs are supposed to : “ promote economic development, and expand industrial and agricultural growth. at the same time, tbs should place within easy reach of the people the medium to long - term credit facilities to businesses engaged in agriculture, services, industry, and housing at reasonable cost. ” parsing through this mandate, it talks simply of lending term funds to various economic sectors, whether in the agriculture, industry or services sector. one can argue that this is true of any bank, whether universal, commercial, thrift, rural or coop banks. if this is the case then, the distinctive feature of thrift banking as provided by law is that of mortgage financing. taking a more general view, the niche of philippine thrift banking is consumer finance and msmes. by targeting specifically these markets, tbs should have a better sense of the amount of risk capital that is needed for a projected level of risk exposure. it also allows for more focused consideration via specific regulatory issuances. in circular 855, for example, the bsp talks of underwriting credit without being locked into specific forms of collateral. our periodic stress tests have a specific section on consumer finance vulnerabilities while the recent introduction of rest sets our own framework on the credit risks of real estate exposures. consumer protection issues – redress mechanisms, financial literacy initiatives and outright better disclosures – are equally relevant. our circular 857 provides the minimum standards of conduct we expect from market players while setting the framework for a periodic review and complaints handling. these are all critical as you consider your niche. but asean integration is certainly another key consideration. the asean banking integration framework or abif was formally launched only a couple of weeks ago. this means that we now enter the phase of administering the guidelines so that bis central bankers ’ speeches qualified asean banks ( qabs ) can operate within the region in the next couple of years. there will be other occasions where we can fully elucidate the details and operation of abif. but central to the framework is the idea of developing asean for asean for which consumer finance appears to be a key facet. about a tenth of the world ’ s population resides in asean. while the global life expectancy rates have increased from 66 years old in 1990 to 71 years old in 2012, asean has extended this to 73 years old on average. with 30 to 35 percent of asean population at or younger than 15 years old, this extra 2 years becomes even more material over the next few

amando m tetangco, jr : strategic challenges ahead for banking and for thrift banks speech by mr amando m tetangco, jr, governor of bangko sentral ng pilipinas ( bsp, the central bank of the philippines ), at the 2015 annual convention of the chamber of thrift banks, makati, 7 april 2015. * * * a growing economy and a steady banking industry the philippine economic story remains one of growth. the macroeconomy has had 64 consecutive quarters of expansion which has been achieved while keeping prices stable. on the external front, we have been able to sustain current account surpluses for more than a decade due to strong structural flows from remittances and bpo receipts. as a result, our gir has increased to usd 81. 3 billion as of end - february 2015. buoyed by investors ’ confidence on the country ’ s sound macroeconomic fundamentals, the philippines attracted a record - high of usd 6. 2 billion last year in foreign direct investments. the success of the philippines thankfully has not gone unnoticed. we cherish the investment grade status bestowed by international credit rating agencies because it opens opportunities for the country as an investment destination. this is one major reason why we pushed for what later became republic act 10641 and we are now seeing the strong interest of foreign banks to enter into our market. they serve as potential catalyst of more investments from their home countries. alongside the favorable macroeconomic environment has been the expansion of the banking industry. the numbers do change but we have seen the resources 1 of the philippine banking industry grow at a steady pace due to the continuous increase in deposits from the public. this build up in deposits is critical in two respects. first, it reaffirms the confidence of the public to entrust their savings into the banking system and also shows the improved economic condition of the population that eventually translates into saving. the second reason is that it of course fuels the availability of more loanable funds and we have noted that the increased credit exposures have been without deterioration in asset quality. re - positioning thrift banking in a changed environment all the positive developments have certainly put us in a good position. they provide us the momentum to move forward but they will not necessarily guarantee further success. markets are constantly in a flux and the strengths of the past need to be further enhanced to meet the challenges of the future. this is why we continuously amend and upgrade our regulatory environment. the bs