New speech of iep 54th charter anniversary symposium 1

    To all past Presidents of RBAI, Confederation/Federation Presidents, our  friends  from  media,  our  partners  in  the  industry,  our  sponsors, my  fellow  Rural  Bankers,  friends,  ladies  and  gentlemen,  good morning.  99.2  Million  mobile  subscribers  among  all  mobile  networks  in  the Philippines;  12  Billion  pesos  in  recorded  transactions  in  mobile banking amongst RBAP member banks; a distinct increase in internet usage  with  93  percent  of  the  ABC  market  segments  having  access from  their  own  homes;  the  Philippines  holding  the  title  of  social networking capital of the world with having a penetration of 93.9% in Facebook alone; ranked 8th in the world for twitter usage; By 2015, 500 million and 1 Billion people in Asia will access financial services through  mobile  services  through  the  initiatives  of  mobile  operators to  bank  the  unbanked;  and,  the  steady  growth  in  OFW  remittance year on year!  More  than  ever,  the  Filipino  is  wired  and  has  access.    These  are  the current  realities  and  possibilities  that  present  themselves  as opportunities for the Philippine rural banking industry.  These show that the market has evolved and has become more sophisticated.  Hence, we in the RBAP conceived this year’s 54th Charter Anniversary Symposium theme: “Rural Banking Innovations: the next generation”, to  specifically  address  the  evolutionary  changes  taking  place  in  the Philippine  market.    We  wish  to  show  you  that  the  RBAP  and  its members  have  been  leading  the  way  most  specially  in  the  field  of mobile  banking  where  through  the  efforts  of  the  RBAP‐MABS  team has  made  the  Philippines  a  leading  example  in  financial  inclusion using the mobile phone platform.  In the past months, we have been visited by nations across Asia and Latin America to specifically study the  success  achieved  by  mobile  financial  services  in  the  Philippines and its impact on micro enterprise and micro business.  Fellow rural bankers, we need to realize that banking as we knew it before  has  been  changed  to  a  certain  degree.    We  need  to  embrace the  opportunities  I  mentioned  and  convert  them  into  concrete services that will enhance our relevance to our core markets.  To wit, the  RBRDFI  has  increased  its  trainings  and  seminars  to  enable  our 

 employees to understand the new products that we are rolling out as approved by our regulators.    These  trainings  and  seminars  conducted  with  the  cooperation  of regulators  and  private  sector  partners  are  continuous  and  ensure knowledge  transfer  is  constant  and  updated.    You  only  need  to participate to be able to have these new products in your respective financial markets.  More  than  technology  and  innovations,  I  wish  to  touch  on  the  new generation  of  rural  bankers  taking  over  the  leadership  of  their respective  family  enterprises.    These  new  rural  bankers,  the  next generation, will definitely ensure that rural banking remains relevant.  With  the  new  paradigms  and  their  appreciation  of  the  evolving market and technology, they bring with them vigor and vitality that will invigorate your respective financial institutions.  While Filipinos have been known to be prudent bankers, I believe the infusion of new blood and new ideas will renew our commitment to the communities we serve.  In  a  recent  meeting  with  all  the  confederation  and  federation presidents, I shared with them some data that I will now share with you.  In  the  past  two  years,  our  performance  has  been  of  continued improvement.  Indeed there are some closures, but these are more to mergers  and  consolidations  rather  than  insolvency  and undercapitalization.  As of end of 2010, our CAR as an industry stands at 19% or 9 percentage points higher than what the BSP prescribes or the international standard of 8%.  Rural banks also posted steady profitability  indicators.    Return  on  Equity  (ROE)  was  at  11.7  while Return on Assets (ROA) was at 1.9%, levels that are at par with our commercial bank counterparts.    The  industry’s  total  gross  loan  is  at P100.2  billion  and  deposits  at  P108.9  Billion,  both  an  increase  from the  previous  year  data.    Moreover,  the  NPL  ratio  is  at  8.9%  and continue  to  steadily  decrease  from  the  previous  years.  This  is  by  in large a clear measure of our resolve to improve the performance as well as the image and perception not of just of individual rural banks but  as  a  whole  industry.      We  are  continuing  to  communicate  the good  news  to  the  general  public  by  actively  engaging  the  national press  and  making  sure  that  misperceptions  are  immediately corrected and addressed and our own views aired in an environment of transparency.  

   To  further  allay  your  fears  on  the  recent  spate  of  bank  mergers,  let me  tell  you  that  this  form  of  streamlining  has  brought  in  more benefits for us, pushing us to be more innovative.  This has resulted to  an  expansion  of  non‐traditional  delivery  of  channels.      From  the latest count, there are 187 ATMS deployed by rural and cooperative banks, while 55 banks are offering electronic banking services.    The agricultural front, despite the natural calamities, has been on the upswing.    More  than  ever,  we  remain  essential  in  providing  and extending  financial  assistance  to  our  farmers  who  have  achieved  a bumper  crop  harvest  of  corn  for  the  first  time  in  recent  history. According to Secretary Alcala of the DA, by 2013 the Philippines will be rice sufficient.  This puts us directly in the frontline of sustaining the financial ability of our farmers and ancillary industries in helping them  move  their  businesses  and  agricultural  growth  forward  and upward.    We  can  ably  move  this  on  by  already  providing  micro insurance  products  for  the  farmers  and  small  businesses  that  are dependent on agricultural production.  In fact, together with RBRDFI and MABS, we had started rolling out the training for accreditation to be able to offer micro‐insurance products in our banking offices.  I  also  would  like  to  encourage  the  creation  of  confederation  and federation websites linked to the RBAP website in order to create a national network of rural banks visible globally to all Filipinos.  This helps  promote  each  of  the  rural  banks  in  their  respective  areas  and serves  as  a  GLOBAL  WINDOW  that  our  OFWS  can  view.    One interesting  aspect  that  we  can  explore  connected  to  this  is  by catering  to  the  special  needs  of  many  OFWs,  specifically  on  matters concerning remittances.   While remittance centers are dime a dozen, there  is  still  a  way  for  us,  Rural  Bankers,  to  enter  this  industry  by offering  a  faster  yet  affordable  service  to  our  clients  in  the countryside,  who  are  also  beneficiaries  of  many  OFWs.  And  this  is where the PhilPass Remit System comes in. To give you a bird’s eye view, our strategic role if and when we decide to use this system, is we  can  offer  cheaper,  if  not  the  cheapest  transaction  fees  with  very limited  risk.  In  the  near  future,  upon  your  acceptance  and implementation of PhilPass Remittance facilities as introduced by the BSP, this RBAP and Confed/Fed website network can be a guide for any Filipinos in the country and also including OFW’s living abroad.  

  We have also been actively talking with members of Congress for the amendment of our Charter to allow the infusion of foreign equity and partners for rural banks.  I believe that this will help rural banks raise more capital in the service of progress for our clientele, who are the underserved  and  underbank,  and  is  an  essential  component  as  a catalyst for growth.  The  creation  of  a  Technical  Working  Group  for  Credit  Risk Management  is  another  positive  step  that  we  have  undertaken.    We envision this TWG to,  (1) formulate safety parameters to protect the welfare  of  Rural  Banks  and  (2),  come  up  with  faster  and  efficient procedures in loan packaging and processing.    On a related note, the RBAP  has  continued  its  partnership  with  SBCORP  in  pursuing  their main  objective,  this  time  around  targeting  an  additional  set  of  rural banks  for  accreditation.    One  of  the  aims  of  this  partnership,  just  to brief  you,  is  to  prepare  a  risk‐based  cash  flow  approach  analysis  in packaging  and  evaluating  SME  loan  applicants.    And  finally,  I  am happy  to  inform  all  of  you  that  the  CIC  or  Credit  Information Corporation; a credit bureau for all banking and financial institutions has formally started gaining ground.  Although we are waiting for the full  implementation  of  this  credit  bureau,  it  is  already  gaining momentum  and  receiving  positive  feedback  from  stakeholders.    To further explain the status of CIC we have the President Mr. Balthazar Endriga to discuss this later on.    If there is anything at all that I have noticed in the years I have been involved  in  our  philanthropic  enterprise,  it  is  our  slowness  to embrace  things  that  are  new  to  us.    Charge  this  to  our  so‐called prudence, but now is a time to embrace change for the benefit of our consumers.    I  am  not  talking  about  overhauling  the  whole  bank  or even going into a branding campaign. I am talking about changes and innovations  that  will  definitely  make  an  impact.    These  are  simple steps that will innovate your respective banks.  But more than these, a  new  mindset  that  is  consumer  focused  will  increase  our  banks relevance to our markets and always keep us on the cutting edge of rural banking excellence.    I hope that I have given you an insight on what the possibilities are and the opportunities that can be derived from them.  All we need to be  is  proactive‐  proactive  in  the  development  of  new  products  and 

 services and pro‐active in our appreciation of the knowledge that our market is changing.   With  these,  we  can  move  onwards  and  create  a  global  example  of what a rural bank should be!  We did it with mobile phone banking, so  having  Philippine  rural  banking  as  a  global  example  is  not  an impossibility, but doable.  Fellow rural bankers and leaders in the banking industry, I end with assurances to you that we in the leadership of the RBAP will continue to assist you in the process of innovation as we continue into the new millennium.  Together  and  united,  we  are  a  financial  force  that  can achieve change and greater good for our countrymen.  Let  us  embrace  our  heritage  and  purpose  for  our  creation  –  to  help the financially underserved and unbanked.  In the process, accede to the fact that the markets and consumers have evolved and changed.  And in the process, so must we. I hope you will become Ambassadors of change and innovation for the industry after our symposium.  Mabuhay.   SPEECH OF IAN ERIC PAMA President Rural Bankers Association of the Philippines 54th Charter Anniversary Symposium Prepared by PROCOM                

New speech of iep 54th charter anniversary symposium 1

by RBAPAT54 on Nov 29, 2011

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New speech of iep 54th charter anniversary symposium 1 — Document Transcript

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