TOWARDS A RESILIENT AND INCLUSIVE FINANCIAL SECTOR

TRES BIEN
THE PHILIPPINE ECONOMIC DEVELOPMENT PLAN 2011 -2016

ASSESSMENT
Current Structure of the Financial System Condition and Performance

Current Structure of the Financial System

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The Philippine financial system is primarily bank-based rather than capital marketbased

The banking sector plays the primary role in financial intermediation and is the main source of credit in the economy. Non-bank financial institutions claim only 17 percent of economic output in 2010. The Philippine Stock Exchanges (PSE) market capitalization as a percentage of economic output remained small. Our mutual funds are considered smallest in Asia

Foreign participation in the financial system remains limited

A growing concentration in the high-income and urbanized areas of NCR, Central Luzon, and CALABARZON
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Towards a Resilient and Inclusive Financial Sector

Condition and Performance

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Banking Sector - remains the core of the financial system and primary source of credit for the economy Equities Market - showed signs of recovering from depressed global market sentiments in 2007-2009 Fixed Income Market Total volume traded at the Philippine Dealing and Exchange Corporation (PDEx) for 2010 more than double its previous YTDs level

Foreign Exchange and Bond Markets The domestic financial market has started to realize gains from improving market and investor sentiments. The peso strengthened against the US Dollar while sovereign credit spreads tightened
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Towards a Resilient and Inclusive Financial Sector

CHALLENGES
Institutionalized Generation of Savings and Mobilization of Resources Available Savings are Primarily Lodged in Short- Term Instruments Lack of a Thriving Capital Market Improving the Financial Governance Framework Financial Institutions Concentration in Urban Areas Need for Legislative Support in Critical Reform Areas

STRATEGIC FRAMEWORK
Vision for the Financial Sector Medium-Term Development Plan for the Financial Sector Key Reforms and Objectives Targets Specific Reform Strategies

Vision for the Financial Sector

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A regionally responsible, development-oriented and inclusive financial system which provides the needs of its diverse public are guided by the following:

Bootom-up development Top-down infrastracture support

Prices that fully reflect relevant information

Enabling environment for the effective management of risks
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Towards a Resilient and Inclusive Financial Sector

Medium-Term Development Plan for the Financial Sector

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A good financial system in banking and in capital markets should be assisted by the following guidlines:

A conductive policy and regulatory environment Progressive adoption of intrnational standards and best practices Good governance

Transparency for the effective delivery of financial Towardsservices Inclusive Financial Sector a Resilient and March 13, 2013

Key Reforms and Objectives Targets

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To achieve 7 to 8% growth in he country's economic output beginning 2011with a minimum of 5% growth annually for 6 years

An increase of US $3000 per capita income over the 6 year period 10% reduce of poverty incidence per year
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Towards a Resilient and Inclusive Financial Sector

Key Reforms and Objectives Targets

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Focus on:

To promote savings generation at the regional level but having deployment of resources at the national level To developan enabling environment for long-term savings

To strengthen the good governance of financial system that meet the international standards and best practices
March To establish a strong legal framework for financial13, 2013 sector development

Towards a Resilient and Inclusive Financial Sector

Specific Reform Strategies

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Promote a regionally responsive and inclusive financial system through institutionalized savings generation and resource mobilization Develop an enabling environment for long-term investments Strengthen the governance framework of the financial system in line with best practices and standards Establish a strong legal framework for financial sector development
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Towards a Resilient and Inclusive Financial Sector

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Thank you for listening

Oriel Anne Guno Catherine Grace Custodio
Towards a Resilient and Inclusive Financial Sector March 13, 2013