decades. in addition, asean saves nearly 31 percent of its gdp. this rate is 11 percentage points higher than the rest of the world. this extra 11 % in saving is not small as it is larger than the gdp of many countries. as time moves forward, asean ’ s young population provides a rich opportunity for increasing demand for financial services. the same population will require financing for consumer requirements in housing, auto loans, credit cards and other personal needs – the very market that the philippine thrift banking industry currently defines as its “ space ”. finally, the msme sector, which accounts for 99. 6 percent of the total number enterprises in the country and more than one - third ( or 35 percent ) of our gdp and employs 65 percent of our workforce, is without a doubt vital to our economy. by positioning yourselves to grow this sector, the dividends will go beyond yourselves. growth in this sector will have significant multiplier effects in generating employment and raising the standard of living of more of our people. by positioning to serve this sector, tbs can be true catalysts of broad - based and sustainable inclusive growth. strategic directions and final thoughts ladies and gentlemen, i started my remarks by stating that ours remains a story of growth. i suggested, however, that we need to be strategic in facing the new normal of banking. banks have to look carefully at the evolving environment, including the reforms, and how they can strategically position themselves in a changing market environment. the banking mindset today and five years hence are not the same as those from a decade ago. banks must adopt the best practice standards, adapt to the changing market conditions, and adjust their strategic mindset accordingly. this strategic landscape of adopt - adapt - adjust is, however, not a game of absolute size but one of relative fit. in other words, finding your niche. you asked me to comment on the state of thrift banking in the philippines. the reality of course is that the industry is a dichotomy. those that are part of a banking group enjoy the scale that the group offers. this route offers a way to create a wider footprint and carves out the consumer finance business line from the u / kb parent to the tb subsidiary / affiliate. for the tbs that are stand - alone, you are effectively much more geared to your community market. the concept of a community can readily be defined more liberally in both product line and counterparty. but the crux is that the discipline of target

amando m tetangco, jr : prospects for and developments in the philippine banking system speech by mr amando m tetangco, jr, governor of bangko sentral ng pilipinas ( bsp, the central bank of the philippines ), at the philippine international banking convention 2015, makati city, 2 october 2015. * * * i am pleased to be joining you again for this philippine international banking convention. for five years now, we have gathered to consider the pressing issues of the time as a way for us to take an inward look at how the philippine banking system is positioned. for today ’ s conference, the organizers have chosen for us to look at the philippine financial system through the lens of asean financial integration. i particularly like the operative word of today ’ s theme – “ transforming ”. the word evokes movement over time, change, reaction, adaptation. in other words – dynamism. this is what really is needed in a time of flux. but perhaps what we need to be reminded of is that our regional operating environment has already been changing even before recent times when asean economic community ( aec ) and asean integration have become more talked about. prospects of an integrated regional financial market the reason possibly why asean integration has become more elevated in public consciousness lately is that the aec will be “ formally ” launched at year - end. but, we should not be misled to believe that end december represents a “ switch - on ” for regional integration. the reality is, even if we count only the aec, integration efforts have been unfolding under an aec blueprint since 2008. the blueprint contains four pillars, 17 core elements, 176 priority actions and 414 targeted measures. based on the most recent scorecard, asean has completed 80. 7 % of its economic integration program ( i. e., 334 out of 414 measures completed as of end 2014 ). for those of us in the financial markets, however, the more critical target is 2020 at which time the asean financial integration framework or afif is expected to be in place. this initiative has many moving parts and perhaps the best way to appreciate it is to understand the underlying philosophy behind an integrated asean. it is actually a rather simple story with a compelling business case. instead of 10 separate economies, a single market provides an enormous base within which consumers and providers can operate. measured by gdp, this single base is significant. in addition, asean has a track record