Amando M. Tetangco, Jr.
BSP Governor

Fostering a Culture of Good Governance and Compliance

Date: 07.18.2014
Place: Rizal Ballroom A, Makati Shangri-la, Makati City
Occasion: Induction of New Officers and General Membership Meeting of the Bankers Institute of the Philippines


It is always a pleasure to join BAIPHIL when it celebrates milestones, including leadership transitions. To us at the Bangko Sentral ng Pilipinas,… BAIPHIL is a vital strategic partner.

Through the capacity-building programs that you craft and implement, BAIPHIL helps keep our banking sector in step with international benchmarks… and aligned with the BSP’s continuing reform agenda to make our banks better. That means stronger,… more efficient,… more responsive to the needs of clients,… able to manage risks, and faithfully adhere to the principles of good governance.

So, how are we doing so far? Well, today, the Philippine banking sector is sound, well-capitalized, stable, profitable, liquid … and able to support the funding needs of our growing economy.

Among others, the total assets of our banking sector now stands at over P10 trillion, having grown at an annual rate of 12.4% in the five year period between March 2009 and March 2014.

Similarly, deposits climbed to a record P7.7 trillion as of March 2014, as public confidence in our banks kept deposits rising at 12.9% each year over the same period.

Delivered by BSP Governor Amando M. Tetangco, Jr. during the Induction of New Officers of the Bankers Institute of the Philippines on 18 July 2014 at the Rizal Ballroom A of the Makati Shangri-la, Makati City

Bank loans also kept pace, expanding at an annual rate of 11.4% to reach P5 trillion in March this year.

Trust accounts also showed robust annual growth of 10.5%, reaching a total of P2.5 trillion as of March 2014.

There is no doubt… the banking industry continues to move forward. In the process, it has earned good reviews from third parties. Last December for instance, the credit rating agency Moody’s said… it maintained a positive outlook on the Philippine banking system, the only one in the Asia-Pacific region to which it has given a “positive” outlook.

Part of the credit for this positive development properly belongs to BAIPHIL – its leadership… and its membership. As the education arm of the banking industry, you play a key role in preparing and empowering bankers to be better at what they do.

Looking ahead, one imminent challenge for the Philippine banking industry is the economic and banking integration within ASEAN, a market of 600 million consumers. Integration is bound to heighten competitive pressures on domestic banks.

Today, the Philippines is an attractive proposition to regional players given its stable economy, sound financial system, and growing consumer market. Foreign banks may enter our country to facilitate investments from abroad… or to take a stake in our retail market. However one views this, there is one clear conclusion: those already operating in our banking industry face increased competition.

Aside from regional integration, the winds of change are also upon the global regulatory environment. This is evident in the transition of universal and commercial banks… and their subsidiaries… to the Basel 3 standards beginning this year. This, we know, follows the adoption of Basel 1.5 by stand-alone thrift banks and rural banks in 2012. While the shift to Basel 3 and Basel 1.5 are material to the reform agenda, let me point out that it only covers the capital requirements.

In reality, the Basel Accord is a complex reform of many components. Moving forward, new rules on leverage, liquidity, trading books, counterparty risk, OTC derivatives and systemically important financial institutions…. will also be issued to further align local banking standards with the global accord.

I cannot overemphasize how much capacity-building all these will require but we have to start doing these now.

While BAIPHIL can leverage on the strength of the industry, the changing market landscape presents new challenges to BAIPHIL’s goal. We need to develop new skills and scale up even as we continue to foster integrity, fairness and accountability on the ground.

Some sectors actually ask what banks must precisely do to overcome challenges. From a realistic standpoint, there is only one thing that banks must do – and, that ladies and gentlemen, is to become better banks.

As the banking industry’s capacity-building arm, BAIPHIL is essential in this endeavor. The link between manpower quality and competitiveness has been firmly established. BAIPHIL, therefore, must step up and help banks become more competitive.

Fortunately, “becoming better banks” is not an abstract concept for us; this frame of mind has been with us in the last two decades… because it is at the heart of our reform agenda.

Strategic Vehicles

To me, risk management, good governance and consumer protection will enable our banks to make their mark in this current financial landscape.

As I mentioned earlier, becoming “bigger in balance sheet size” is not the only game in town. A better approach for banks is to differentiate themselves through effective risk management.

I believe that our banks have a fairly good chance of becoming a stand out in the critical area of risk management. This is a result of the deliberate program of our banking industry to set the bar higher and be accountable as such.

Given this, we can see that the game is less about increasing size, and more about finding the right size. BAIPHIL should look into this closely because determining the right size vis-à-vis a bank’s exposures requires higher levels of competency.

Of course, the drive for enhanced risk management must come from the top. This is the very reason why banks must abide by high standards of governance.

It should be clear that leadership quality is doubly critical because what separates a good bank from the rest is often the ability of its board and senior management to apply good judgment on risk-return choices.

It is important for BAIPHIL therefore to continue mounting, and enhancing as needed, the training module on good governance. This module is critical as a fundamental management guide. More than that however, it is an important means to deepen our bench of those who understand and apply the tenets of responsible leadership.

As we have emphasized on many occasions, good governance dovetails into consumer protection. As we begin to enforce the Consumer Protection Framework that the Monetary Board has approved, the interaction between governance and consumer protection will become seamless.


What do all of these mean? As your regulator, the BSP will continue to work with BAIPHIL not only in capacity building initiatives, but also in activities of common interest.

In fact, the BSP values its partnership with BAIPHIL in raising the personal finance management skills of public elementary school teachers and parents. Since its launch in 2010, the BSP-BAIPHIL “Puno ng Yaman” lectures have reached 45 locations and have touched the lives of more than 5,000 participants. I understand that the teachers and the parents stay on for five hours for the lectures and participate actively in the sharing that takes place. This tells us that they find the lectures informative and inspiring.

In recognition of this excellent program that helps change… and improve lives, the BSP named BAIPHIL this year as Outstanding Partner for Finance Education at our Stakeholders Awards program last week. Your past President Francis Puzon and your new President Teresita Galvadores accepted the award. Congratulations BAIPHIL!

And now the BSP-BAIPHIL partnership has expanded to include the Bankers Association of the Philippines in teaching good money habits to children of Overseas Filipinos. To me therefore, BAIPHIL is living up to its chosen theme for 2014-2015: “Reaching Greater Heights Through Continuing Education and Training.”

As I look around this room, I realize the tremendous potential of the collective brainpower here. Individually or in groups, you can empower people around your communities to be better in saving, investing and managing their finance. Call it personal finance management 101 from BAIPHIL members. I hope you will respond to this challenge.

Official statistics indicate that one out of 4 Filipinos live in poverty. At the same time, we have seen how modest microfinance loans, if handled properly, can truly liberate people from poverty… and even serve as catalyst for growh in their community. And we have seen how these microentrepreneurs transform into net savers with and move on to financial independence.

Indeed, there are many challenges… as well as opportunities… that lie ahead for the Philippine banking industry in particular, and the Philippine economy in general. As experts in your respective field, BAIPHIL members can… and should… be able to help empower Filipinos.

Finally, I want to share one final thought with you. As the Bank of Commerce Chorale was singing, I was reminded of what American minister Halfort Luccock once said, and I quote: “No one can whistle a symphony. It takes a whole orchestra to play it.”

Ladies and gentlemen of BAIPHIL. Given the size and the nature of our banking industry, there is no single institution that can ensure its success. It will require from, all the players in the banking industry, from all its stakeholders… the political will… the commitment to see that our reform agenda continues. And we can help develop a stronger base for our banking system by implementing financial education activities across our country.

Let us continue to work together therefore to ensure the sustained growth of the banking industry, the development of a more inclusive financial system, and the fulfillment of our goal for a truly inclusive growth in our country. Real growth that improves the lives of millions of

Maraming salamat sa inyong lahat! Mabuhay ang BAIPHIL! Mabuhay ang ating mahal na bansang Pilipinas!

Teresita S. Galvadores
BAIPHIL President

Inaugural Address

12:00 P.M. July 18, 2014

The Honorable Governor of the Bangko Sentral ng Pilipinas and Chairman of the Monetary Board, Amando M. Tetangco, Jr., Honorable Members of the Monetary Board, Assistant Governors, Bangko Sentral ng Pilipinas, other officers of the Bangko Sentral ng Pilipinas, distinguished Chairmen of the Board, Presidents/Chief Executive Officers, officers of various banks in the country and affiliate institutions, Executive Director and Other Officers of the Bankers Association of the Philippines, BAIPHIL Past Presidents, President of the Philippine Clearing House Corporation, and Past Baiphil President, Noel Barcena, officers of other banking, financial and allied organizations, Executive Vice President of the Philippine Association of Collegiate Schools of Business, Dr. Victoria Ac-Ac, distinguished guests, colleagues, partners and friends of Baiphil, ladies and gentlemen.

Good Afternoon! As the 69thrd President, for a seven-decade old organization, I stand here before you, fully committed and prepared, to lead the team, of highly dedicated men and women, of the BANKERS INSTITUTE OF THE PHILIPPINES or (BAIPHIL), for the fiscal year 2014-2015.

In an environment filled with constant change, the domestic and global business landscape has deemed it extremely imperative, for its people and business enablers to be educated, made aware, updated and kept abreast with changes and new developments. The Filipino banking industry is in the same scenario, with the various developments, changes, and regulations affecting its day to day operation. Among the vital business drivers, is an adequately equipped workforce, fully aware and confident of the direction and path they are charting, towards its goals! For the best interest and direction, geared towards business growth, healthy financial system and professional nourishment, empowerment of the human capital, of the banking sector, has become a need and a reality. THE NEED IS REAL!

The Bankers Institute of the Philippines, in response to this need and reality, has been visible, and continues to remain steadfast in its role as the training arm of the banking industry. Strongly driven by the mission, to support the
Filipino Bankers, in enhancing productivity, keeping abreast with relevant developments, through continuing education, research and information exchange, BAIPHIL has modestly equipped and re-tooled the local banking industry, with knowledge and skills, necessary in running the affairs of the business.

Banks and financial institutions, while pounding hard towards generating and safeguarding a strong and stable financial bottom line, are also expected to strike a healthy balance and focus, on the observance of good governance in the workplace, compliance, risk identification and management and regulatory updates both globally and domestically.

This year’s theme of BAIPHIL: REACHING GREATER HEIGHTS THROUGH CONTINUING EDUCATION AND TRAINING, underscores a deepened emphasis, and definition of the INSTITUTE’s role in educating and training the Filipino banking community. Putting more weight in strengthening the training capabilities of BAIPHIL, efforts for this year and onwards, will certainly be a focus on the reinforcement of the functions of the BAIPHIL EDUCATION AND TRAINING INSTITUTE OR BETI. BETI, which is the banner committee of BAIPHIL, takes the lead in handling trainings and seminar offerings.

This fiscal year, which we usually term as school year because of the nature of our role, BETI expects to operationalize the various course committees for more focus and effectiveness to cover the following:

  • GOVERNANCE, RISK, COMPLIANCE (GRC) COURSE COMMITTEE (Governance, Risk, Compliance, Audit and Internal Control Modules and Courses)
  • FINANCE, LEGAL, TAXATION (FLT) COURSE COMMITTEE (Finance, Accounting, Taxation, Legal Management Courses)
  • PRODUCT, SALES, OPERATIONS COURSE COMMITTEE Treasury, Trust, Credit, IT, Sales Courses
  • INTERNATIONAL, PROVINCIAL PARTICIPATION, SOFT SKILLS COURSE COMMITTE (Trainings in International Operations, Soft Skills, Leadership, Good Manners in the Workplace, Personality Trainings)

Handles logistics, support, guidelines, training database management, MIS These course committees will be put to task in conducting training needs analysis covering banks and related financial institutions, sourcing out and screening of qualified Subject Matter Experts for the topic or module, discuss, review and approve the course content and materials together with the subject matter experts, evaluate the results of each training run, get feedback from the class and make use of these feedback to grow the Institute.

Baiphil prides of its refreshed, BSP approved module, on the Corporate Governance Course which is currently offered. The Institute shall likewise make available, trainings which will enhance the soft and leadership skills of bank personnel. Ongoing partnership with the association of collegiate schools of business, for the organization’s modest share in preparing students through training shall continue to be supported. Plans are likewise underway towards a joint collaborative venture in affording our bankers with the basics of programming, understanding the basics of business intelligence and similar Information Technology subjects which are critical tools towards a much improved performance.

BAIPHIL continues to support the continuing information dissemination, to all member banks and its workforce, on the movements and salient activities of the financial market, through the Baiphil Market Watch, the bi-monthly release of the tax and legal regulations through the Research Committee. All of these are done, in BAIPHIL’S effort to raise the bar of excellence in the banking sector, thereby positively acting on the efficiency of banks.

Interestingly though, BAIPHIL does not only cover the banking sector, but has also catered to the unbanked sector of the society. The Special Project Committee, in close coordination with the Bangko Sentral ng Pilipinas, the Bankers Association of the Philippines, the OWWA, and the Philippine Association of Collegiate Schools of Business, will continue to get the support of the Institute in the conduct of the Financial Education Program, and other relevant topics for the benefit of the attendees, where emphasis is made on how to spend wisely, save and prepare for the future by our overseas workers and their wives and beneficiaries, teachers of some schools, and students.

This fiscal year, we take bold steps to bring our trainings, seminar offerings to our colleagues outside of the National Capital Region as we highlight : BAIPHIL GOES COUNTRYSIDE! We are also preparing the grounds for stronger collaborative efforts to cover our colleagues and partners in the Rural Bank, Thrift and Development Banks and Microfinance Sector in the provincial areas.

We foresee and look forward with high expectations, a highly empowered banking community, aware, educated and updated, heightened by the effort that a bigger scope of the banking population will be covered, thus attaining greater heights in terms of efficiency and productivity!

Existing and ongoing programs of the Institute will continue to be supported to include our corporate social responsibility activities, like the medical missions and the care we give to the Lolos and Lolas and the abandoned.

BAIPHIL acknowledges with deep appreciation, the continued support from the various bank regulators, particularly the Bangko Sentral ng Pilipinas (BSP). The strong partnership with regulators and the trust enjoyed from the member institutions and the banking sector as a whole, have propelled this organization to move on with strengthened and heightened spirits.

On a yearly basis, we see the elected officers of BAIPHIL, on occasions such as today’s induction. These officers make public, their oath of commitment, to serve the Institute in various capacities. We acknowledge with sincere appreciation, all the past, current directors and officers of BAIPHIL, who, despite the regular workload they handle in their respective workplaces, still continue to allot time for the organization. The men and women of the Institute, are instrumental in breathing fresh life, to sustain the existence of BAIPHIL, now 73 years old and still counting. More than the mandatory retirement age, BAIPHIL has sired leaders who are now retired from their banking careers, but still in very active service to the Institute, with nothing to expect, except for the profound pride, of being able to contribute to the Philippine Banking Sector.

May I address this now to all the BAIPHIL OFFICERS AND MEMBERS. TEAM, I AM CERTAIN THAT YOU KNOW AND REALIZE THAT YOU ARE IN BAIPHIL FOR A REASON! YOU HAVE A ROLE TO PLAY FOR THE INSTITUTE, WHETHER IT MAY BE BIG OR SMALL. LETS MOVE FORWARD IN PERFECT CADENCE, ALWAYS MINDFUL, NOT TO LOSE SIGHT OF OUR ROLE AND COMMITMENT TO THE BANKING COMMUNITY! This means, being with BAIPHIL is a life of a leadership, a life of work, camaraderie and growth. To start the work, is to make known your plans and objectives to your respective teams, and then the action begins. When you finally see your plans in place, you thank your team for doing the work well. In between the making known of the plan which is the first step, and thanking the team towards the last step, as a leader, you are not only a leader, but you are a servant. In leadership, the component of service becomes the focal point. Friends, ladies and gentlemen, please join me in giving our leaders, our servants, our BAIPHIL FAMILY, a big round of applause!

I sincerely thank all those who are here to witness the occasion, despite your busy schedules. To our bank regulators, leaders in the financial and banking community, to our guests, my bosses and colleagues from Bank of Commerce, all our partners, all those who have given their support to BAIPHIL , the BOC Chorale, and to my family, my husband and children, my siblings who flew in from Bohol…… behalf of BAIPHIL, my sincerest thanks!

With God’s guidance and blessings, the men and women of BAIPHIL will implement the plans and activities, mapped out for the year and onwards.

BAIPHIL lives and continues to live longer than anybody’s calculation! MABUHAY AND BAIPHIL! MABUHAY ANG SAMBAYANANG PILIPINO!