2015 show that there are 524 rural banks with a network of 2, 086 branches and other offices. rural banks are present in 59 % of the country ’ s 1, 634 cities and municipalities, which is more than double the reach of universal and commercial banks ( 23 % ) and thrift banks ( 28 % ). while bigger banks are concentrating in highly urbanized and densely populated regions such as ncr, calabarzon and central luzon, rural banks are thriving in regions where there is less access to financial services. for instance, cordillera, cagayan valley, mimaropa, and caraga are among the regions where there are more rural banks than other bank types. noteworthy to mention is that rural banks are the frontrunners in the establishment of microbanking offices ( mbos ), which enable banks to set up presence in areas where it is not economically feasible to establish a full blown branch. out of 540 operating mbos, 78 % are owned by rural banks. these mbos are present in 338 municipalities, of which bis central bankers ’ speeches 66 municipalities are served by mbos alone. looking at previously unbanked municipalities which gained banking presence, most of them are now enjoying banking services because of mbos. the numbers that i have presented just show that rural banks are truly more accessible in the countryside. you are still in areas where other players are not. take advantage of this position to strengthen your foothold so that you will be more resilient when competitors come. while you already have a wide presence, there are also still untapped opportunities in terms of unbanked municipalities whose level of economic activity is not necessarily low. for instance, 15 % of unbanked areas are 1st to 2nd class municipalities. these areas will surely benefit from financial intermediation to sustain local economic growth and boost consumption and productivity. admittedly though, some of you may be already satisfied with the current market that you are serving. if geographical expansion is not part of your game plan, you can always improve your products and services in terms of design and delivery. as rural banks, what sets you apart from bigger banks is that you are more relationships driven. you have an intimate knowledge of the local economy and close ties with the community. use this to be more responsive to the needs of customers as well as to market trends. you can also introduce improvements in your operations. according to our national baseline survey on financial inclusion, more than 50 %

of adults who have transacted with banks are just “ somewhat satisfied ” with their transactions. the average waiting time before being served in a bank is 33 minutes which is twice the waiting time in pawnshops and e - money agents. there is certainly room for you to improve the quality of your services in order to enhance customer experience and satisfaction. they say that technology is changing the way banks do their business. some do not have to ever set foot in a bank branch if they have a fully enabled smart phone. emergence of financial technology companies or “ fintechs ” are also dramatically changing the delivery of financial services in payments and even in the underwriting of credit. while you can use these technologies to your advantage – to improve your efficiencies and value proposition – i believe that the value of person - to - person contact will never fully go away. for instance, if you call a customer service hotline, isn ’ t it that you still prefer to talk to someone rather than hear default call answers from the other end of the line? the point is, even in the face of technology, you can still build on your strength – which is the relationship that you have established with your community. it is possible for technology to enhance relationships rather than replace them. if you are able to effectively nurture the confluence between the two, you will be able to not only increase but also cement your customer base. finally, to be better positioned to serve your clients, always keep in mind that only sound and well - managed institutions can take advantage of new opportunities and have scope for more innovations. promoting financial inclusion should not be at the expense of safety and soundness of operations. this is the reason why the bsp always emphasizes the importance of strengthening your bank ’ s governance structure and institutional capacity, and continuously upholding best practices and performance standards. enabling regulatory environment on the part of the bsp, not only as your regulator but also your partner, we remain committed in providing an enabling regulatory environment that will support rural banks in overcoming emerging challenges and provide you with various opportunities to be more responsive to the markets that you would like to serve. our regulations allow you to partner with non - banks to offer new products and adopt new channels and technology. many of you have already benefitted from establishing partnerships bis central bankers ’ speeches with institutions that can assist you in the delivery of services which before were not offered by rural banks. for example, 39 rural banks have been given the authority to cross