many analysts, the domestic demand in emerging markets holds up. this situation could result in the country maintaining or even increasing the level of our exports to these markets. such could thus prop up the overall exports. remittances is a second important channel through which a slowdown in the us economy could impact on the domestic economy. latest data show that 1 / 3 of our land - based overseas filipinos are in the us. the diversification in deployment in terms of destination and quality of skills could, however, temper any slowdown in remittances. let me now turn to the third major risk that we face : the rise in global food and energy prices. food prices have gone up as a result of strong demand from china, india, and other emerging market economies that are experiencing rising incomes. poor harvests due to adverse weather conditions and increased biofuel production have also ratcheted demand for certain related food items. furthermore, just recently we saw oil price breach the $ 100 - a - barrel level. geopolitical tensions in the middle east, refinery bottlenecks, speculative activity, the weak us dollar, and the continued strong demand for crude oil all exerted an upward pressure on global oil prices. however, as global growth slows, we may see commodity price volatilities abate in the second half of the year. with these risks that i have just described being primarily global and largely not directly within our control, why do we believe that the philippine economy will be able to ride out these patches? the short answer is we have built up domestic buffers. what are these? one, we have built up buffers in our domestic financial system. the philippine banking system ’ s asset base has grown steadily over the last 6 - 7 years. the overall asset quality of banks continued to improve as well, with the npl ratio now moving closer to the pre - crisis level of around 4 percent. banks ’ overall capital adequacy ratio was also maintained well above regulatory and international standards, shored up by the increased issuance of hybrid financial instruments to strengthen their capital base. last year, we rolled out two reform packages aimed at improving the system ’ s ability to manage risks and competitiveness in a more globally integrated market environment – here i refer to the further liberalization of our fx market and the new derivatives circular. amid the heightened risks in the global financial markets last year, the banking sector has showed resilience. two, the

can bis central bankers ’ speeches likewise consider similar standards for auto loans in order to ensure that banks don ’ t end up financing “ lemons ”. we would also like to see the chamber actively contributing towards an equivalent effort for credit card receivables and other modes of consumer financing. business cycles come and go, and therefore it is important that we have the rules of the game squarely in place, so that any market inflection points will not cause instability in the market. as market opportunities expand, we need to also work together so we can maintain strong credit discipline and avoid imprudent lending and investments. ladies and gentlemen. we are an economy of 96 million filipinos spread over 7, 101 islands. it stands to reason that consumer - related financing, your bread and butter, will be a major factor in the economy. hence, the bsp ’ s push to improve credit underwriting standards for consumer loans. but in parallel with this, we believe thrift banks should also actively participate in the culture and practice of financial education and consumer protection. these are not just fancy buzz words. in fact, in the bsp, we take these twin advocacies seriously. through our economic and financial learning centers ( eflcs ) in our head office and 21 regional offices and branches, we undertake outreaches to raise the awareness of the financial consumer so that each of them can make informed saving and investment choices. the bsp has partnered with the chamber on some of these programs and we look forward to engaging the chamber even more. we would also like to see individual members of the chamber embark on your own literacy programs. as a complement, we have created a specialized department in bsp called the financial consumer affairs group ( fcag ). it is set up as a clearing hub for complaints and as a redress mechanism so that those who have clearly been victimized through no fault of their own do not have to suffer the added penalty of delayed attention. furthermore, the bsp is in the early stages of formalizing specific standards for consumer protection, including how banks should handle consumer complaints. this move is aimed at elevating consumer protection to a stature of a core bank function, and not simply an ancillary advocacy. let me now leave the world of real estate and consumer finance. and turn to another sector that the chamber is well - equipped to support. here i mean the world of micro, small and medium enterprises. the philippines is traditionally an msme