insurance commission ( ic ) • national economic and development authority ( neda ) • philippine deposit insurance corporation ( pdic ) • philippine statistics authority ( psa ) and • securities and exchange commission ( sec ) these agencies are involved, directly or indirectly, in promoting an inclusive financial system and in serving unserved and underserved markets. as participants in the nsfi crafting process, these agencies commit to pursue financial inclusion alongside their respective mandates. the bsp, as initiator of this process, is committed to make the nsfi a living, relevant and useful document for all stakeholders. our commitment to financial inclusion began as early as year 2000 when we mainstreamed microfinance as a banking activity. since then, we have been fine - tuning policies and regulations to enable our supervised institutions to serve unconventional markets such as low - income households and microentrepreneurs. experience taught us that such markets, like regular consumers, can be provided with suitable financial products and services by regular financial institutions. hence in 2007, we bis central bankers ’ speeches progressed our advocacy from microfinance to financial inclusion. the bsp was among the first central banks to create a unit dedicated to promoting financial inclusion. our agenda has since expanded because of the conviction that financial inclusion, when done right, supports the bsp ’ s primary mandates of price and financial system stability. we have also put equal focus on consumer protection and financial education. in 2012, the bsp institutionalized financial inclusion as a corporate objective with the creation of the inclusive finance steering committee ( ifsc ), which i chair. this committee serves as a seamless mechanism for internal coordination and synergy of various inclusionrelated initiatives that are being implemented by different operating units. these initiatives revolve around the same four areas that the nsfi focuses on. to institutions therefore who wish to support or promote financial inclusion, the nsfi serves as guide – the sonar or gps that ensures policy cohesion and coordination, and prevents duplication of initiatives. sceptics may think that our nsfi is merely another document. we believe nsfi will work thru the implementation of tactical plans that form the acronym smart : specific, measureable, achievable, realistic and time - bound. as per our timeline, by july this year, the heads of the agencies represented here today will sign a memorandum of understanding as a formal commitment to the nsfi objectives, principles and tactical plans. ladies and gentlemen. we realize that the 13

will be introduced for leverage, liquidity, the handling of market risks that lead to credit risks, the treatment of securitization and inter - financial exposures, and mitigating counterparty risks, among others. beyond the basel accord, the distinction between otc and exchange - traded derivatives is effectively being removed to ensure price transparency and improved governance. payment systems are now governed by new principles set for providers of so - called financial market infrastructures ( fmis ) while the use or non - use of these fmis by market players will have consequences. there are many other reform initiatives that could be cited. at the end of the day though, all of these are geared to the common purpose of achieving financial stability. we will have every opportunity to discuss how high to set the prudential bar but the principles behind the change in the global standards are difficult to ignore. capital market development : moving beyond the usual rhetoric apart from the global initiatives, we do have our own set of concerns. capital market development has been in and out of vogue through the years. however, many unresolved issues remain and this is our second major challenge. the capital market blueprint prepared under the auspices of the securities and exchange commission headed by chairperson herbosa is the take - off point. i urge the stakeholders to look carefully at the blueprint and commit to the deliverables within their purview. from the perspective of the bsp, a few specific issues are most critical. who will disagree with the proposition that benchmarks are central to our market and its operations? whether it is to price a new issue or value / re - value an existing exposure, the role of benchmark rates simply cannot be over - stated. despite many initiatives and formulations, we remain well - short of a viable yield curve that properly reflects credit and bis central bankers ’ speeches liquidity risks. we have all heard of ois, implied zero rates and single price as the latest round of initiatives towards an acceptable yield curve. we look forward to having these initiatives come to fruition, hopefully by end - year. the role of clearing entities and similar dis - interested 3rd parties will also be critical. a part of this goes back to the issue of valuation. at this juncture, we do need to think about the broader policy framework for our market infrastructure. to execute our capital market agenda, these are the areas that need to move beyond rhetoric. taking the challenges forward ladies and gentlemen, the past