Empowering the Banking Industry

Article excerpt

BAIPhil President Emmanuel E. Barcena, distinguished bankers, distinguished guests, ladies and gentlemen, good evening.

Thank you for inviting me to the 26th National Convention of the Bankers Institute of the Philippines, Inc. (BAIPhil).

General outlook

I feel very much at home with banking professionals who are said to be among the happiest people these days. They have reason to be. Banking, after all, is booming and the year 2010 was considered one of the best for Philippine banks. Average capital adequacy ratio (CAR) of over 15% remained comfortably above the Bangko Sentral ng Pilipinas (BSP)'s 10% minimum requirement. Non-performing loans likewise remained generally low at 3%. In fact, the country's largest bank, Banco de Oro, achieved a milestone in the banking industry when its consolidated resources hit the P1-trillion mark at the end of 2010, the first Philippine bank to do so. No doubt, the strength of the banking sector contributed to the 7.3% growth rate in 2010, the fastest in 34 years.

Such growth is remarkable since it took place in a low-inflation environment with 2010 inflation averaging at 3.8%. Not surprisingly, businessmen surveyed by the BSP are more upbeat over their profitability expectations and outlook on the country's performance in the next quarter than at any other time in the past.

Such optimism is shared by the results of global accounting leader and advisor Grant Thornton's annual International Business Report (IBR) showing that Filipino business leaders are ranked third in the world with 87% of our businessmen saying that they are more confident about business prospects for 2011.

This positive assessment is further reinforced by banking giant Citigroup which identified the Philippines last month as one of the eleven (11) countries that "will likely stand out in a globally integrated economy in terms of high growth rates and investment returns over the next forty years."

To be sure, the path to economic progress, albeit slow, reflects a steady upward trajectory and no longer the boom-bust cycle of the early 1990s. Of course, it is quite unfortunate that the benefits of our growing economy seem unevenly spread, meaning, huge discrepancies in development exist. But that is another story.

BAIPhil has achieved giant strides since its modest beginnings in 1941 under the name National Association of Bank Auditors and Comptrollers (NABAC). Its original purpose was to pursue efficiency and uniformity in bank accounting, auditing and operations.

Its founding members were the Philippine National Bank, First National City Bank (now Citibank), Philippine Trust Company, Agricultural and Industrial Bank (now Development Bank of the Philippines), Bank of the Philippine Islands, Monte de Piedad & Savings Bank and China Banking Corporation.

Although names have changed and modern banking visions, missions and goals have evolved, BAIPhil and its founding institutions have survived and continued to serve the country's financial concerns for over 70 years.

For us in the Judiciary, the retirement age is 70 years old. For BAIPhil, however, 70 must be its comparable adolescent phase. In the course of seven decades, BAIPhil today has developed its own strong sense of purpose and identity which transcend generational and geographical considerations.

BAIPhil, an organization of professional bankers, today has 61 institutional members of local and foreign banks, offshore banking units, thrift and government banks, electronic banking networks, Philippine Clearing House Corporation and regulatory agencies, such as the Bangko Sentral ng Pilipinas (BSP) and the Philippine Deposit Insurance Corporation. It has also close to 300 key bank executives as associate members. It is also the partner of the BSP and the Bankers' Association of the Philippines in the training and development of banking professionals. …