2009 RBAP-MABS NATIONAL ROUNDTABLE CONFERENCE MAY 12-13, 2009 HYATT HOTEL AND CASINO MANILA Outlook and Initiatives for Rural Banks Amidst the Global Financial Crisis Joseph Omar Andaya President, Green Bank of Caraga

Overview of the Crisis The Global Financial Turmoil A once-in-a-century event Contraction of leading economies The Philippine Situation Largely spared for now but will feel effects later on

The Global Financial Turmoil

A once-in-a-century event

Contraction of leading economies

The Philippine Situation

Largely spared for now but will feel effects later on

Sectors Affected i.Export Industry - slowdown in foreign demand leading to collapse of orders ii. Overseas Foreign Workers Remittance - reduction in global manufacturing and services results to net outflow of migration from host countries iii. Tourism Industry

i.Export Industry

- slowdown in foreign demand

leading to collapse of orders

ii. Overseas Foreign Workers Remittance

- reduction in global manufacturing

and services results to net outflow

of migration from host countries

iii. Tourism Industry

Implications for Rural Banks i. Deposit Generation - Reduction of deposits ii. Lending Operations - Depressed business activity will result to smaller appetite for credit iii. Social Unrest and Rising Criminality

i. Deposit Generation

- Reduction of deposits

ii. Lending Operations

- Depressed business activity will

result to smaller appetite for

credit

iii. Social Unrest and Rising Criminality

Lending Operations CI / BI Cash Flow Method of Lending iii. Varied Loan Products for different market segments - Micro Agricultural - Micro Housing - Loans for those former Micro-enterprise customers who have already ‘graduated’

CI / BI

Cash Flow Method of Lending

iii. Varied Loan Products for different market segments

- Micro Agricultural

- Micro Housing

- Loans for those former Micro-enterprise

customers who have already ‘graduated’

iv. Establish delivery channels in underserved geographic areas iiv. Small Claims Court

iv. Establish delivery channels in underserved

geographic areas

iiv. Small Claims Court

Deposits Come up with new Savings Products ii. Establish delivery channels in underserved areas to acquire more customers iii. Tap other sources of funds as safety nets in case of panic withdrawals - loans / credit lines from institutions like the Land Bank and the BSP

Come up with new Savings Products

ii. Establish delivery channels in underserved areas to acquire more customers

iii. Tap other sources of funds as safety nets in case of panic withdrawals

- loans / credit lines from institutions like

the Land Bank and the BSP

Other Financial Products i. Micro-insurance - lessen the impact of shocks on family income - bundled with deposit and loan products would decrease the volatility of deposits and would ensure the repayment of loans

i. Micro-insurance

- lessen the impact of shocks on family

income

- bundled with deposit and loan products

would decrease the volatility of deposits

and would ensure the repayment of loans

THANK YOU

THANK YOU