inclusive finance committee. actually, our objective to have a more inclusive financial system is embedded in the other policy initiatives of the bsp. we are continuously working on reforms for a more robust banking sector. we are also working toward increasing the scale and scope of bank operations to support the needs of the market, particularly those in the countryside. what is clear is that banks now have more opportunities to provide a wider range of services and products to their clients on the basis of the following : a liberalized branching regime ; bangko sentral ’ s receptiveness to various product and technological innovations in banking services ; bangko sentral ’ s support to further improve bank efficiencies by allowing, among others, the outsourcing of some functions ; and the expanded range of services and opportunities that qualified rural banks can undertake, such as foreign currency deposit accounts and equity investments in atm networks. through these initiatives, we envision stronger banks with a broader geographical presence providing competitively - priced and well - designed products for all market segments, including the previously unserved. with these in place, i am confident that we will continue to see further innovations toward greater financial inclusion. in this context, i am reminded of bill gates who once said that “ never before in history has innovation offered promise of so much to so many in so short a time ”. it is in this spirit that i ask all of you who are participating in this conference … and other microfinance practitioners as well to continue to take advantage of the opportunities innovations bring, to broaden and sustain the liberating and empowering force of microfinance in improving the lives of our entrepreneurial poor and their families. finally, on behalf of the bangko sentral ng pilipinas, i thank all of you for your continuing support as we move forward to build better lives and a solid bedrock for a stronger economy through microfinance. thank you and i wish you all a fruitful and successful conference. mabuhay ang microfinance!

amando m tetangco, jr : building a stronger economy through microfinance speech by mr amando m tetangco, jr, governor of the central bank of the philippines ( bangko sentral ng pilipinas ), at the conference on microfinance : powering innovations in microfinance, asian development bank, manila, 24 july 2008. * * * microfinance council of the philippines president rolando victoria, adb vice president lawrence greenwood, adb ed marita magpili jimenez, mr. barry hitchcock, other officers of adb, fellow advocates and workers in microfinance, distinguished participants, representatives from the banking community, special guests, good morning. this two - day conference organized around the theme “ powering innovations in microfinance ” is truly a special event. ten years ago, one would not associate the words power and innovations with microfinance in the philippines. while some of today ’ s leading microfinance ngos were already around at that time, microenterprises did not have access to formal financial services and had to resort to informal lenders with very high cost of funds. formal financial institutions were cautious of this market due to high credit risk and transaction costs. what a difference a decade makes! today, microfinance is no longer a mere buzzword but part of the financial mainstream, with 229 banks actively engaged in the sector. as of december 2007, these banks had an outstanding loan portfolio of p6 billion, extended to nearly 800, 000 clients or an average of 7, 500 pesos per borrower. significantly, our microborrowers have also become net savers ; as of end 2007, their combined deposits with banks have reached close to 2 billion pesos. indeed, microfinance has firmly established a track record across our country for nurturing successful microentrepreneurs who have attained financial security for themselves and their families. equally important, microentrepreneurs serve as catalyst for development in their respective communities. what triggered the mainstreaming of microfinance in our country? well, to put it briefly, it resulted from the convergence of the need to find ways to liberate millions of our entrepreneurial poor from the cycle of poverty ; innovations, of course ; and the willingness of key stakeholders to adopt new ways of doing business. i will now share the story of bangko sentral and how we responded to the challenge of mainstreaming microfinance within our financial