amando m tetangco, jr : mainstreaming financial inclusion as a strategic objective speech by mr amando m tetangco, jr, governor of bangko sentral ng pilipinas ( bsp, the central bank of the philippines ), at the bsp - bis research conference of financial inclusion and central banks, cebu, 3 june 2016. * * * good morning everyone. on behalf of the bangko sentral ng pilipinas, i welcome all of you to cebu. this conference, which the bsp is privileged to co - host with the bis, is actually the result of a discussion in the asian consultative council ( acc ) of the bis. it was early 2014 in sydney, if i am not mistaken, when bsp suggested to the acc governors, that a possible area of research for the bis hongkong office ( under the acc process ) could be the relationship between financial inclusion and financial stability. in particular, we suggested that the bis hongkong office investigate whether increased financial inclusion contributes to or detracts from financial stability. necessarily, dr. remolona and his team would also have to determine the possible transmission mechanism for this linkage. that suggestion came at a time when revisions to the g20 financial inclusion action plan ( fiap ) were being undertaken during the australian g20 presidency. by that time also, the united nations had already underpinned the importance of financial inclusion as an imperative in the attainment of a wide range of targets under the sustainable development goals. the unsgsa, her majesty queen maxima of the netherlands, had also by then already conducted intensive meetings on financial inclusion with the standard setting bodies that included the bcbs, cpmi, fatf, iadi and iais. clearly, the once - peripheral issue was then becoming mainstreamed in the global discourse. the bsp experience at that time, we were also trying to better understand this issue for our own policy work in the bsp. you see, by 2014, the bsp already had over a decade of experience with microfinance as a flagship program for poverty alleviation. our efforts started as an advocacy, with the belief that creating an enabling policy and regulatory environment could catalyze market players to see microfinance as a sound and viable undertaking. we endeavored to create a supervisory and regulatory framework that recognized the peculiarities of microfinance while striving to maintain alignment with international standards. such balance allowed the entry of banks

to regulate the new and diverse set of participants more effectively. once this legislation is passed, we will be embarking on a wholesale review of our retail payments regulation to identify any areas where competition, efficiency and safety could be improved. there is also legislation in the making that will provide a licencing regime for non - bank payment service providers and will implement common access requirements for payment systems. these changes will also help to promote competition in the payments system. 4 / 5 bis - central bankers'speeches banknote distribution another issue that i would like to update the committee on is the work that is underway to address challenges in the cash distribution system. as the use of cash for transactions has declined, the economics of cash distribution has come under pressure. this was one of the main factors behind the merger of the two largest cash - in - transit providers last year, which the accc approved subject to a three - year undertaking regarding pricing and service levels. however, linfox armaguard has since indicated that, despite this, its cash distribution business remains unsustainable. the rba places a high priority on the australian community continuing to have good access to cash withdrawal and deposit services. late last year, i convened several discussions with businesses in the industry to consider what more could be done to support access to cash for those who need or want it, and to promote a sustainable model for cash distribution in australia. these discussions are being conducted in line with an interim authorisation from the accc enabling relevant parties to develop and evaluate industry responses to support the viability of wholesale cash distribution and access to retail cash services. they are likely to continue for some months. developing a model for cash distribution that is sustainable in the long term requires addressing complex issues that will take some time to work through. i have encouraged the major participants in the cash distribution system to approach these issues with the public interest in mind. $ 5 banknote redesign project finally, i would also like to update the committee on the work underway to redesign the $ 5 note. last year, we announced that we would be taking the opportunity to feature a new design on the $ 5 note that honours and celebrates the culture and history of first nations peoples. as a first step in determining the design, we will be asking members of the public, over the course of march and april, to share with us what they think should be on our $ 5 banknote to represent first nations culture and history in australia. in recent weeks,