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To all past Presidents of RBAI, Confederation/Federation Presidents,
our friends from media, our partners in the industry, our sponsors,
my fellow Rural Bankers, friends, ladies and gentlemen, good
morning.
99.2 Million mobile subscribers among all mobile networks in the
Philippines; 12 Billion pesos in recorded transactions in mobile
banking amongst RBAP member banks; a distinct increase in internet
usage with 93 percent of the ABC market segments having access
from their own homes; the Philippines holding the title of social
networking capital of the world with having a penetration of 93.9%
in Facebook alone; ranked 8th in the world for twitter usage; By 2015,
500 million and 1 Billion people in Asia will access financial services
through mobile services through the initiatives of mobile operators
to bank the unbanked; and, the steady growth in OFW remittance
year on year!
More than ever, the Filipino is wired and has access. These are the
current realities and possibilities that present themselves as
opportunities for the Philippine rural banking industry. These show
that the market has evolved and has become more sophisticated.
Hence, we in the RBAP conceived this year’s 54th Charter Anniversary
Symposium theme: “Rural Banking Innovations: the next generation”,
to specifically address the evolutionary changes taking place in the
Philippine market. We wish to show you that the RBAP and its
members have been leading the way most specially in the field of
mobile banking where through the efforts of the RBAP‐MABS team
has made the Philippines a leading example in financial inclusion
using the mobile phone platform. In the past months, we have been
visited by nations across Asia and Latin America to specifically study
the success achieved by mobile financial services in the Philippines
and its impact on micro enterprise and micro business.
Fellow rural bankers, we need to realize that banking as we knew it
before has been changed to a certain degree. We need to embrace
the opportunities I mentioned and convert them into concrete
services that will enhance our relevance to our core markets. To wit,
the RBRDFI has increased its trainings and seminars to enable our

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employees to understand the new products that we are rolling out as
approved by our regulators.
These trainings and seminars conducted with the cooperation of
regulators and private sector partners are continuous and ensure
knowledge transfer is constant and updated. You only need to
participate to be able to have these new products in your respective
financial markets.
More than technology and innovations, I wish to touch on the new
generation of rural bankers taking over the leadership of their
respective family enterprises. These new rural bankers, the next
generation, will definitely ensure that rural banking remains relevant.
With the new paradigms and their appreciation of the evolving
market and technology, they bring with them vigor and vitality that
will invigorate your respective financial institutions. While Filipinos
have been known to be prudent bankers, I believe the infusion of new
blood and new ideas will renew our commitment to the communities
we serve.
In a recent meeting with all the confederation and federation
presidents, I shared with them some data that I will now share with
you. In the past two years, our performance has been of continued
improvement. Indeed there are some closures, but these are more to
mergers and consolidations rather than insolvency and
undercapitalization. As of end of 2010, our CAR as an industry stands
at 19% or 9 percentage points higher than what the BSP prescribes
or the international standard of 8%. Rural banks also posted steady
profitability indicators. Return on Equity (ROE) was at 11.7 while
Return on Assets (ROA) was at 1.9%, levels that are at par with our
commercial bank counterparts. The industry’s total gross loan is at
P100.2 billion and deposits at P108.9 Billion, both an increase from
the previous year data. Moreover, the NPL ratio is at 8.9% and
continue to steadily decrease from the previous years. This is by in
large a clear measure of our resolve to improve the performance as
well as the image and perception not of just of individual rural banks
but as a whole industry. We are continuing to communicate the
good news to the general public by actively engaging the national
press and making sure that misperceptions are immediately
corrected and addressed and our own views aired in an environment
of transparency.

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To further allay your fears on the recent spate of bank mergers, let
me tell you that this form of streamlining has brought in more
benefits for us, pushing us to be more innovative. This has resulted
to an expansion of non‐traditional delivery of channels. From the
latest count, there are 187 ATMS deployed by rural and cooperative
banks, while 55 banks are offering electronic banking services.
The agricultural front, despite the natural calamities, has been on the
upswing. More than ever, we remain essential in providing and
extending financial assistance to our farmers who have achieved a
bumper crop harvest of corn for the first time in recent history.
According to Secretary Alcala of the DA, by 2013 the Philippines will
be rice sufficient. This puts us directly in the frontline of sustaining
the financial ability of our farmers and ancillary industries in helping
them move their businesses and agricultural growth forward and
upward. We can ably move this on by already providing micro
insurance products for the farmers and small businesses that are
dependent on agricultural production. In fact, together with RBRDFI
and MABS, we had started rolling out the training for accreditation to
be able to offer micro‐insurance products in our banking offices.
I also would like to encourage the creation of confederation and
federation websites linked to the RBAP website in order to create a
national network of rural banks visible globally to all Filipinos. This
helps promote each of the rural banks in their respective areas and
serves as a GLOBAL WINDOW that our OFWS can view. One
interesting aspect that we can explore connected to this is by
catering to the special needs of many OFWs, specifically on matters
concerning remittances. While remittance centers are dime a dozen,
there is still a way for us, Rural Bankers, to enter this industry by
offering a faster yet affordable service to our clients in the
countryside, who are also beneficiaries of many OFWs. And this is
where the PhilPass Remit System comes in. To give you a bird’s eye
view, our strategic role if and when we decide to use this system, is
we can offer cheaper, if not the cheapest transaction fees with very
limited risk. In the near future, upon your acceptance and
implementation of PhilPass Remittance facilities as introduced by the
BSP, this RBAP and Confed/Fed website network can be a guide for
any Filipinos in the country and also including OFW’s living abroad.

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We have also been actively talking with members of Congress for the
amendment of our Charter to allow the infusion of foreign equity and
partners for rural banks. I believe that this will help rural banks raise
more capital in the service of progress for our clientele, who are the
underserved and underbank, and is an essential component as a
catalyst for growth.
The creation of a Technical Working Group for Credit Risk
Management is another positive step that we have undertaken. We
envision this TWG to, (1) formulate safety parameters to protect the
welfare of Rural Banks and (2), come up with faster and efficient
procedures in loan packaging and processing. On a related note, the
RBAP has continued its partnership with SBCORP in pursuing their
main objective, this time around targeting an additional set of rural
banks for accreditation. One of the aims of this partnership, just to
brief you, is to prepare a risk‐based cash flow approach analysis in
packaging and evaluating SME loan applicants. And finally, I am
happy to inform all of you that the CIC or Credit Information
Corporation; a credit bureau for all banking and financial institutions
has formally started gaining ground. Although we are waiting for the
full implementation of this credit bureau, it is already gaining
momentum and receiving positive feedback from stakeholders. To
further explain the status of CIC we have the President Mr. Balthazar
Endriga to discuss this later on.
If there is anything at all that I have noticed in the years I have been
involved in our philanthropic enterprise, it is our slowness to
embrace things that are new to us. Charge this to our so‐called
prudence, but now is a time to embrace change for the benefit of our
consumers. I am not talking about overhauling the whole bank or
even going into a branding campaign. I am talking about changes and
innovations that will definitely make an impact. These are simple
steps that will innovate your respective banks. But more than these,
a new mindset that is consumer focused will increase our banks
relevance to our markets and always keep us on the cutting edge of
rural banking excellence.
I hope that I have given you an insight on what the possibilities are
and the opportunities that can be derived from them. All we need to
be is proactive‐ proactive in the development of new products and

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services and pro‐active in our appreciation of the knowledge that our
market is changing.
With these, we can move onwards and create a global example of
what a rural bank should be! We did it with mobile phone banking,
so having Philippine rural banking as a global example is not an
impossibility, but doable.
Fellow rural bankers and leaders in the banking industry, I end with
assurances to you that we in the leadership of the RBAP will continue
to assist you in the process of innovation as we continue into the new
millennium. Together and united, we are a financial force that can
achieve change and greater good for our countrymen.
Let us embrace our heritage and purpose for our creation – to help
the financially underserved and unbanked. In the process, accede to
the fact that the markets and consumers have evolved and changed.
And in the process, so must we. I hope you will become Ambassadors
of change and innovation for the industry after our symposium.
Mabuhay.
SPEECH OF IAN ERIC PAMA
President
Rural Bankers Association of the Philippines
54th Charter Anniversary Symposium
Prepared by PROCOM