stable prices. by stable prices we mean inflation that is somewhere between 2. 0 ( percent ) and 4. 0 percent. smooth fluctuation now, how about the peso? these are the changes in the exchange rate since the beginning of the year. and you can see that the peso is in good company. you can see that the peso relative to our peers has been somewhat stronger. it depreciated, as it 1 / 2 bis - central bankers'speeches weakened against the dollar, but so have most of the currencies. and you can see that the peso is even stronger than the swiss franc since the beginning of the year. the swiss franc used to be a safe haven currency. while it is weaker than the malaysian ringgit, and the vietnamese dong, it is much stronger than the indonesian rupiah, the new taiwan dollar, the thai baht, the south korean won, and the japanese yen. and why is this? the strength of the dollar has been because the dollar has become the single most important safe - haven currency. when there are tensions, uncertainties around the world, it makes the dollar stronger. in fact, even when the uncertainty is in the us ( united states ), it makes the dollar stronger. in recent months, it has been about the messaging from the fomc ( federal open market committee ) of the fed. the fed has been saying it is going to be high for longer, and that has weakened most of the other currencies against the us dollar. but so, what? what happens when the dollar gets stronger, or the peso gets weaker is that some inflation comes in because our imports are all mostly invoiced in us dollars. if you look at the chart on the left, you have two bars. the one on the left is about what the effect of peso depreciation is on inflation. it was strong during the period before the shift to inflation targeting in 2002. today, we are reaping the benefits of that shift because ( as the second bar shows ) the effect of the depreciation of the peso on inflation has become weaker. what does that mean in terms of inflation today? if you look at the chart on the right, the red line is what the inflation rate has been. and then the broken blue line, is what inflation would have been had the peso not weakened against the dollar. the difference is actually very modest

microfinance has become a viable proposition for banks. in fact, we can say that microfinance as a medium for financial inclusion, has strengthened the institutional stability of banks by generating reliable business opportunities. this is because the microfinance industry has evolved from a narrow focus on microcredit to a more holistic, sustainable and “ value - adding ” provision of financial services to our target market. for example, 69 of the 183 banks with microcredit operations now hold 1. 7 million microdeposit accounts. in early 2012, there were only 22 such banks. in addition, 86 of these banks have decided to offer microinsurance to their clients. furthermore, 26 of these banks now provide e - banking services, including mobile money – a more cost - efficient transactional platform for both banks and clients. ladies and gentlemen. the availability, accessibility and affordability of these financial products have drawn more microentrepreneurs to do business with banks. from this, we have learned that developing appropriate products and delivery channels enable financial institutions to serve markets that were previously marginalized. this is a solid foundation to build on for our broader financial inclusion program. bis central bankers ’ speeches it appears therefore that in the case of the philippine microfinance sector, we have achieved convergence in the delivery of positive financial results and social performance management. congratulations everyone! the bangko sentral is pleased to contribute to the success of microfinance in our country. we deliberately crafted our regulations to fully support the safe and sound development of microfinance. we believe that financial inclusion, through microfinance, complements our financial stability objectives. thus, our regulatory environment is conducive to expand financial access while preserving financial stability and integrity, deepening financial education, and ensuring consumer protection. congratulations bsp! credit should also be given to our microfinance institutions including banks and ngos who took advantage of this enabling regulatory environment to magnify their outreach. they are the ones directly catalyzing change on the ground – in small businesses, in poor households. finally, i am pleased to share the good news that the survey on financial inclusion conducted by europe - based economist intelligence unit gave the philippines high scores on account of strong leadership, highly capable regulators, optimal credit regulation and effective dispute resolution. overall, the philippines is ranked as the top country in asia, and third in the world, with the most conducive environment for financial inclusion. the eiu notes that