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Message of Hon. Noli "Kabayan" L. De Castro |
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Good afternoon.
First of all, I would like to thank the Rural Bankers Association of the Philippines (RBAP) for inviting me to speak before you this morning. I recognize and appreciate the important role that your member rural banks play in bringing basic banking services to the far flung areas that are not normally served by the other bigger banks. When we woke up this morning, about 850 million micro-entrepreneurs, mostly women, within the Asian Region alone, have already started their day by engaging in some form of economic and livelihood activity to support themselves and their families. These poor micro-entrepreneurs live in abject poverty, and they rely on various micro-enterprises to complement their meager and volatile incomes. Due to their poverty, we can safely infer that these 850 million or so micro-entrepreneurs, including our own countrymen, also represent households that have no access to secure a decent housing. These are households that live every day under the threat of evictions, diseases, malnutrition, calamities – whether man-made or natural – and other social maladies. With this bleak reality, both micro-enterprise financing and the provision of socialized housing have had to step up and flourish. In the last few years, we have seen the evolution of good number of micro-enterprise finance systems and programs. These include the Association of Social Advancement (ASA) model; the Grameen Banking, which provides collateral-free credit to the poor of rural Bangladesh; village banking in Latin America; Cooperative Housing and the Micro-enterprise Access to Banking Services, or MABS-APPROACH of our own rural banking sector, among others. I was in Chile last month, and I have also marveled at how microfinance systems and programs in that country have successfully complemented the efforts of the government to uplift the living standards of the poor. These methods and programs have proven to be very sustainable and viable. They have accomplished impressive results, and made a significant impact in the lives of an increasing number of clients, as they expand their reach. In socialized housing, we have also learned valuable lessons from initiatives like the community mortgage program (CMP), as well as other projects initiated by the private developers. Hopefully, we can consolidate the lessons from micro-enterprise finance and socialized housing to address the livelihood and shelter requirements of the poor in a manner that can be sustained and duplicated. This is the only way we can make a real difference in the lives of the Filipino poor. MICROFINANCE: ONE OF THE PRESIDENT’S PILLARS FOR POVERTY ALLEVIATION I understand that a total of 179 rural banks are providing microfinance services to over 535,000 micro-entrepreneurs in the country. In fact you have lent about PhP 3.2 Billion to micro-entrepreneurs through your microfinance and small and medium enterprise (SME) loan windows. In this way, rural banks have indeed proven to be great ally of the government in fighting poverty by creating jobs and increasing the incomes of poor households. In her First State-of-the-Nation Address (SONA) in July 2001, the President declared that microfinance will be one of the cornerstones of her administration’s fight against poverty. The President believes in the effectiveness and impact that microfinance programs bring to the poor entrepreneurs and poor communities. That belief remains as strong as ever. In this, I fully agree with the President. We are committed to see the proliferation of viable and sustainable micro-enterprise finance programs and institutions. This stems from the approved national strategy for microfinance, and I would like to take this opportunity to outline some of the pertinent features of that strategy. 1. First, we recognize a greater role for the private microfinance institutions (MFIs) in providing financial services. 2. Second, we support and commit to an enabling policy environment that will facilitate the increased participation of the private sector in microfinance. 3. Third, we will pursue market-oriented financial and credit policies e.g. market-oriented interest rates on loans and deposits. 4. And fourth, we envision the eventual exit of government line agencies in the direct implementation of credit and guarantee programs. These principles are the critical elements in establishing a framework for the development of microfinance industry. The government’s adoption of these principles has already boosted the number of private microfinance institutions that are providing microfinance services to the poor. President Arroyo’s commitment to assist one million micro-entrepreneurs through microfinance services by end of 2004 was achieved in partnership with the microfinance NGOs, Cooperatives, and, of course, the rural banks. As the micro-enterprise finance industry matures, a number of microfinance derivatives and products have also started to evolve. These include micro-insurance, micro-agricultural products, and health and educational micro-insurance and housing programs. As these related products come into the market, it is important that they be treated with transparency, appropriate risks and provisioning, and with other clear parameters to ensure the growth of the sector. HOUSING MICROFINANCE: THE NEXT WAVE From the experience of microfinance enterprise practitioners, we have learned that after availing of microfinance services for livelihood and economic activities and paying for those services in a timely manner, their client’s next priority is shelter. Hence, they look for a financing window for housing repairs, improvements and/or acquisition f serviced lots. Housing microfinance entails the provision of small loans to low and moderate-income households at short-terms using various types of loan security. Generally, housing microfinance loans are typically used for home improvements and repairs. However, financing and construction of a small starter shelter unit and/or acquisition of a serviced lot are also allowed. In other countries, housing microfinance is now being offered by some of the best performing microfinance institutions. We have also learned that client’s capacity to pay is a critical factor to be considered in providing such microfinance services. Thus, housing microfinance also favors construction of houses on an incremental basis, or building the client’s houses progressively over a period of 4 to 7 years. Allow me at this point to invite you to visit our relocation sites for the Northrail Project. My own vision is to see these sites as model resettlement sites that we can be proud of. While mass transport development is the trigger for relocating people in the rail right-of-way, my own dream is to finally see these informal settlers attaining security of tenure. We noticed that the beneficiaries are eager to improve their abode from what it is now. You can extend this opportunity to them – by giving them the access to micro-housing loans. The Housing and Urban Development Coordinating Council (HUDCC) has two pilot projects funded by the Asian Development Bank (ADB) that will provide not only shelter security but livelihood opportunities as well to urban poor families. The first of these projects is being implemented with the Philippine Business for Social Progress (PBSP). This is the Strategic Private Sector Partnership for Urban Poverty Reduction in Metro Manila, or STEP-UP. It provides loan assistance and a viable revolving fund to over 4,000 households for housing improvements, as well as livelihood assistance to more than 2,500 households. The second project, known as The Development of Poor Urban Communities Sector Project (DPUCSP), is being implemented together with the Development Bank of the Philippines (DBP). I hope to see some of the rural banks represented here today participating in this program. I am pleased to note that your Association, the RBAP, is exploring the possibility of pilot testing a housing microfinance program together with DBP. I hope that this will go beyond pilot testing, and that we will see more of our rural banks participating in housing microfinance, because this will be a big help in our quest to provide shelter security to our countrymen, especially the poor. Ladies and gentlemen from the rural banking sector, such is the challenge that we in th housing sector share with you. We need to learn, we need to listen, and we need to adopt some of the best practices and model in microfinance to address the twin requirements of the poor for livelihood and shelter, so that they may be able to break out from the cycle of poverty. Let us work together, and strengthen our partnership for a better Philippines. Maraming salamat po at mabuhay kayong lahat!!! |
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Circular Letters/Memoranda |
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Speeches/ Presentations |
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Photo Gallery |
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The 2008 RBAP Charter Symposium |
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2008 CFI Awards |
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Rural Banking Week Celebration Golf Tournament |
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Client Satisfaction Survey for Licensing Management System of the Supervision and Examination Sector |
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Financial Reporting Package 2008 |
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BSP releases regulations on liquidity, market risk weighting |
