nestor a espenilla, jr : truths in lending speech by mr nestor a espenilla, jr, governor of bangko sentral ng pilipinas ( bsp, the central bank of the philippines ), at the general membership meeting and induction of officers of the philippine finance association, inc. ( pfai ) makati city, 22 august 2017. * * * philippine finance association, inc. ( pfai ) president, mr. agerico verzola ; executive director, mr. romeo dela rosa ; outgoing and incoming pfai officers ; members ; esteemed guests ; ladies and gentlemen, good afternoon. since 1962, pfai has been instrumental in shaping the landscape for financing and leasing industries. we in the bangko sentral recognise your crucial role in economic development. i congratulate pfai in my own capacity as governor of the bsp and also on behalf of the monetary board, bsp officers and staff. i thank you also for the opportunity and privilege to keynote today ’ s general membership meeting and induction of officers. borrowers and lenders shakespeare famously warns, “ neither a borrower nor a lender be ”. through the hamlet character polonius, the celebrated bard of avon gives the didactic rationale, “ for loan oft loses both itself and friend ( adding that ) borrowing dulls the edge of husbandry. ” what a pronouncement! without subtracting from the literary genius of england ’ s greatest playwright and without discounting ( but also without delving into ) the moral risks involved in lending and borrowing from friends, we can now acknowledge how the conditions for armslength financing have changed dramatically and have improved since the 17th century. in fact, it is interesting that ninety - one ( 91 ) years after hamlet was published, the bank of england was founded in 1694, rationalising and influencing the nature and narrative of financing both in europe and the world. confident of the benefits of prudent borrowing and lending we those in this room – the pfai the bangko sentral ng pilipinas and other players in the industry, laud the practices ’ crucial and indispensable role in national development. we know the push that responsible financing can give to businesses to industries even sharpening and making more efficient — ( to the surprise of elizabethan playwrights ) — the edge of husbandry! five truths in lending important to the philippine financing and leasing industry

, in other words, even just from the point of view of our standard regulatory approach, we have to make some modifications on how we define credit risk, default risk, and all the financial risks that regulated entities face. so, clearly, the regulatory side has to make more adjustments. climate change – change for the better? 1 / 3 bis - central bankers'speeches now, the other one, of course, is - in many ways - things that reduce our contribution to greenhouse gases could also improve our lives. for instance, the shift to electric tricycles, it is good for us. my sister lives in up village, and she complains that the tricycles wake her up. i am glad that we are already out of the noisier, two - stroke [ engine ] motorcycles, which also pollute more. so, clearly, many of our responses to climate change are also good for us. of course, they would say, " well, it is going to be more expensive. " but, maybe, that is a short - run point of view. the more we do these things, the greater the scale of the innovations that will happen, and, maybe, the greater the efficiencies. indeed, i remember the times when, the financial incentives needed for wind and solar [ energy ] were just extremely high. now, the technologies have improved to the point where it is getting quite competitive [ with non - renewable energy sources ]. however, [ using ] renewable energy is not without problems. for instance, there are issues meeting peak demand for power. with renewables, power may be available when you do not need it and unavailable when the need arises. obviously, if our ability to store power improves - which it will over time - the sustainable ways of doing these things may actually, in the long run, become the better ways of doing things. in the morning, i try to run as much as i can. what if it is just easier to do more walking to get to where you work? so, you would actually save a lot of time, right? in other words, if you will take a longer and wider view, the things that are consistent with a better planet are also good for everyday life. navigating the ensuing policy issues of course, [ addressing ] the policy questions are harder. we already know that one of the policy questions is [ how we refine our ] regulatory frameworks for assessing riskiness of banks and