ToallpastPresidentsofRBAI,Confederation/FederationPresidents,our friends frommedia,ourpartners in the industry,our sponsors,my fellow Rural Bankers, friends, ladies and gentlemen, goodmorning.99.2 Million mobile subscribers among all mobile networks in thePhilippines; 12 Billion pesos in recorded transactions in mobilebankingamongstRBAPmemberbanks;adistinctincreaseininternetusage with 93 percent of the ABC market segments having accessfrom their own homes; the Philippines holding the title of socialnetworkingcapitalof theworldwithhavingapenetrationof93.9%inFacebookalone;ranked8thintheworldfortwitterusage;By2015,500millionand1BillionpeopleinAsiawillaccessfinancialservicesthroughmobile services through the initiativesofmobileoperatorsto bank the unbanked; and, the steady growth in OFW remittanceyearonyear!Morethanever, theFilipino iswiredandhasaccess. Thesearethecurrent realities and possibilities that present themselves asopportunitiesforthePhilippineruralbankingindustry.Theseshowthatthemarkethasevolvedandhasbecomemoresophisticated.Hence,weintheRBAPconceivedthisyear’s54thCharterAnniversarySymposiumtheme:“RuralBankingInnovations:thenextgeneration”,to specifically address the evolutionary changes taking place in thePhilippine market. We wish to show you that the RBAP and itsmembers have been leading the way most specially in the field ofmobile bankingwhere through the efforts of theRBAP‐MABS teamhas made the Philippines a leading example in financial inclusionusingthemobilephoneplatform.Inthepastmonths,wehavebeenvisitedbynationsacrossAsiaandLatinAmericatospecificallystudythe success achievedbymobile financial services in thePhilippinesanditsimpactonmicroenterpriseandmicrobusiness.Fellowruralbankers,weneedtorealizethatbankingasweknewitbeforehasbeen changed to a certaindegree. Weneed to embracethe opportunities I mentioned and convert them into concreteservicesthatwillenhanceourrelevancetoourcoremarkets.Towit,the RBRDFI has increased its trainings and seminars to enable our

employeestounderstandthenewproductsthatwearerollingoutasapprovedbyourregulators.These trainings and seminars conducted with the cooperation ofregulators and private sector partners are continuous and ensureknowledge transfer is constant and updated. You only need toparticipatetobeabletohavethesenewproductsinyourrespectivefinancialmarkets.More than technology and innovations, Iwish to touch on the newgeneration of rural bankers taking over the leadership of theirrespective family enterprises. These new rural bankers, the nextgeneration,willdefinitelyensurethatruralbankingremainsrelevant.With the new paradigms and their appreciation of the evolvingmarketandtechnology, theybringwiththemvigorandvitality thatwillinvigorateyourrespectivefinancialinstitutions.WhileFilipinoshavebeenknowntobeprudentbankers,Ibelievetheinfusionofnewbloodandnewideaswillrenewourcommitmenttothecommunitiesweserve.In a recent meeting with all the confederation and federationpresidents,IsharedwiththemsomedatathatIwillnowsharewithyou. In the past two years, our performancehas been of continuedimprovement.Indeedtherearesomeclosures,butthesearemoretomergers and consolidations rather than insolvency andundercapitalization.Asofendof2010,ourCARasanindustrystandsat19%or9percentagepointshigherthanwhattheBSPprescribesortheinternationalstandardof8%.Ruralbanksalsopostedsteadyprofitability indicators. Return on Equity (ROE)was at 11.7whileReturnonAssets(ROA)wasat1.9%,levelsthatareatparwithourcommercialbankcounterparts. The industry’s totalgross loan isatP100.2billionanddepositsatP108.9Billion,bothan increase fromthe previous year data. Moreover, the NPL ratio is at 8.9% andcontinue to steadilydecrease from thepreviousyears.This isby inlargeaclearmeasureofourresolveto improvetheperformanceaswellastheimageandperceptionnotofjustofindividualruralbanksbut as a whole industry. We are continuing to communicate thegood news to the general public by actively engaging the nationalpress and making sure that misperceptions are immediatelycorrectedandaddressedandourownviewsairedinanenvironmentoftransparency.

To furtherallayyour fearson the recent spateofbankmergers, letme tell you that this form of streamlining has brought in morebenefitsforus,pushingustobemoreinnovative. Thishasresultedto an expansion of non‐traditional delivery of channels. From thelatestcount,thereare187ATMSdeployedbyruralandcooperativebanks,while55banksareofferingelectronicbankingservices.Theagriculturalfront,despitethenaturalcalamities,hasbeenontheupswing. More than ever, we remain essential in providing andextending financial assistance to our farmerswho have achieved abumper crop harvest of corn for the first time in recent history.AccordingtoSecretaryAlcalaoftheDA,by2013thePhilippineswillbericesufficient. Thisputsusdirectlyinthefrontlineofsustainingthefinancialabilityofourfarmersandancillaryindustriesinhelpingthem move their businesses and agricultural growth forward andupward. We can ably move this on by already providing microinsurance products for the farmers and small businesses that aredependentonagriculturalproduction.Infact,togetherwithRBRDFIandMABS,wehadstartedrollingoutthetrainingforaccreditationtobeabletooffermicro‐insuranceproductsinourbankingoffices.I also would like to encourage the creation of confederation andfederationwebsites linkedtotheRBAPwebsite inordertocreateanationalnetworkofruralbanksvisiblegloballytoallFilipinos.Thishelpspromoteeachof theruralbanks in theirrespectiveareasandserves as a GLOBAL WINDOW that our OFWS can view. Oneinteresting aspect that we can explore connected to this is bycatering to thespecialneedsofmanyOFWs,specificallyonmattersconcerningremittances.Whileremittancecentersaredimeadozen,there is still away for us, Rural Bankers, to enter this industry byoffering a faster yet affordable service to our clients in thecountryside, who are also beneficiaries of many OFWs. And this iswherethePhilPassRemitSystemcomesin.Togiveyouabird’seyeview,ourstrategicroleifandwhenwedecidetousethissystem,iswecanoffercheaper, ifnot thecheapest transaction feeswithverylimited risk. In the near future, upon your acceptance andimplementationofPhilPassRemittancefacilitiesasintroducedbytheBSP, thisRBAPandConfed/FedwebsitenetworkcanbeaguideforanyFilipinosinthecountryandalsoincludingOFW’slivingabroad.

WehavealsobeenactivelytalkingwithmembersofCongressfortheamendmentofourChartertoallowtheinfusionofforeignequityandpartnersforruralbanks.Ibelievethatthiswillhelpruralbanksraisemorecapitalintheserviceofprogressforourclientele,whoaretheunderserved and underbank, and is an essential component as acatalystforgrowth.The creation of a Technical Working Group for Credit RiskManagement isanotherpositivestepthatwehaveundertaken. WeenvisionthisTWGto,(1)formulatesafetyparameterstoprotectthewelfare of Rural Banks and (2), come up with faster and efficientproceduresinloanpackagingandprocessing.Onarelatednote,theRBAPhas continued its partnershipwith SBCORP inpursuing theirmainobjective, this timearoundtargetinganadditionalsetof ruralbanks foraccreditation. Oneof theaimsof thispartnership, just tobrief you, is topreparea risk‐based cash flowapproachanalysis inpackaging and evaluating SME loan applicants. And finally, I amhappy to inform all of you that the CIC or Credit InformationCorporation;acreditbureauforallbankingandfinancialinstitutionshasformallystartedgainingground.Althoughwearewaitingforthefull implementation of this credit bureau, it is already gainingmomentum and receiving positive feedback from stakeholders. TofurtherexplainthestatusofCICwehavethePresidentMr.BalthazarEndrigatodiscussthislateron.IfthereisanythingatallthatIhavenoticedintheyearsIhavebeeninvolved in our philanthropic enterprise, it is our slowness toembrace things that are new to us. Charge this to our so‐calledprudence,butnowisatimetoembracechangeforthebenefitofourconsumers. I am not talking about overhauling thewhole bank orevengoingintoabrandingcampaign.Iamtalkingaboutchangesandinnovations that will definitelymake an impact. These are simplestepsthatwillinnovateyourrespectivebanks.Butmorethanthese,a new mindset that is consumer focused will increase our banksrelevancetoourmarketsandalwayskeepusonthecuttingedgeofruralbankingexcellence.IhopethatIhavegivenyouaninsightonwhatthepossibilitiesareandtheopportunitiesthatcanbederivedfromthem.Allweneedtobe is proactive‐ proactive in the development of newproducts and

servicesandpro‐activeinourappreciationoftheknowledgethatourmarketischanging.With these, we canmove onwards and create a global example ofwhataruralbankshouldbe! Wediditwithmobilephonebanking,so having Philippine rural banking as a global example is not animpossibility,butdoable.Fellowruralbankersandleadersinthebankingindustry,IendwithassurancestoyouthatweintheleadershipoftheRBAPwillcontinuetoassistyouintheprocessofinnovationaswecontinueintothenewmillennium. Together and united, we are a financial force that canachievechangeandgreatergoodforourcountrymen.Letusembraceourheritageandpurpose forourcreation– tohelpthefinanciallyunderservedandunbanked.Intheprocess,accedetothefactthatthemarketsandconsumershaveevolvedandchanged.Andintheprocess,somustwe.IhopeyouwillbecomeAmbassadorsofchangeandinnovationfortheindustryafteroursymposium.Mabuhay.SPEECHOFIANERICPAMAPresidentRuralBankersAssociationofthePhilippines54thCharterAnniversarySymposiumPreparedbyPROCOM