Ten years ago in this same room, I took part in the launching of the search for ING-FINEX CFO of the Year Award. I am pleased to join you therefore in celebrating a successful and meangingful decade of this Search.
This is a milestone. For this, we thank ING-- one of the world’s largest banking and financial services groups, FINEX -- the leading organization of CFOs in the Philippines, and other program partners. Salamat sa inyo.
Certainly, the search for excellence deserves our full attention and support. Among other qualifications, we need CFOs who orient their organizations toward best practices; who create value and meet financial goals; who ensure regulatory compliance; who excel in risk management; and who address strategic issues that shape the organization’s future.
And we need CFOs who can contend with factors associated with economic, technical and political developments.
In the end, we need CFOs who are catalysts, strategists, stewards and operators. These are not easy tasks. I therefore conclude that a CFO who achieves all of these, at a time when global financial markets continue to spring surprises and the digital revolution is looming over every business line fully deserves the honor of being named CFO of the Year! Congratulations to our Awardee this year.
You have the privilege and the responsibility to be a role model who inspires and motivates others to do better, to be more dynamic, ethical, and internationally competitive. This is important. We need more globally competitive CFOs in the country to help grow our economy.
The economic story of the Philippines remains one of growth. As of September this year, we have had 71 quarters of uninterrupted GDP growth. The series of economic reforms and the enhanced governance standards we have adopted have built the base upon which we have derived the momentum for sustained and resilient growth.
In particular, our 7.1% GDP growth in the third quarter this year, counts as the fastest in Asia even as we managed to keep prices low and stable. Inflation was 2.3% last October. This brought the average inflation rate for the first 10 months of the year to 1.6 pct. While this is slightly below the government’s target range of 2-4 percent, we expect inflation to move within target over the rest of the policy horizon. We have achieved, therefore, the ideal convergence of high growth and low inflation.
Parallel to our positive economic story is the steady growth of our banking industry. As of June this year, total resources of our banking sector had reached P12.5 trillion with deposits at P9.6 trillion; both assets and deposits are at all-time high levels. In addition, overall bank capitalization is comfortably above local and international standards, and bank lending continues to expand in double-digit rates and went mostly to productive sectors.
Third party analysts have taken notice of our robust banking industry. Among others, the Philippine banking system is the only recipient of a positive outlook from Fitch Ratings for 2016. Likewise, Moody’s recognized the Philippines as the only banking system in ASEAN that has a stable outlook on all the rating factors (operating environment, asset quality and capital, profitability, funding and liquidity).
This is where we are right now. Where do we go from here? Some of you may ask: is growth sustainable? Well, we have CFOs around the room. What do you think?
If you ask me, my answer is yes --- our economy will continue to grow based on what we see on the horizon. We will continue to move forward. I also believe we have sufficient buffers against external headwinds. Among others, our gross international reserves of $85.75 billion as of end – October 2016 is enough to cover 10 months’ worth of imports; this is also equivalent to 6.1 times the country’s short-term external debt based on original maturity and 4.4 times based on residual maturity.
Ladies and gentlemen, the strength of the Philippine economy in general, and the banking system in particular, can be attributed to more than two decades of reform. For us, the prudential objective for the industry is not only about banks being individually safe and sound. A clear lesson from the financial crisis of 2007-2009 is that, the condition of the whole cannot be the simple sum of the respective parts.
The bigger picture is defined not just by the complexities of finance. Rather, it is about the web of inter-connectedness between transacting parties across products, as well as the channels of risk that underpin the activities in the market.
This is the new prudential norm of financial stability. Under the regulatory framework anchored on Financial Stability, we look at how separate risks come together to form the bigger picture.
This is the same challenge facing CFOs. What will separate the great CFOs from the pack is their ability to see this bigger picture while at the same time appreciating that underneath the bigger picture are many interconnected and moving parts.
CFOs would not know for certain what lies ahead, but the great ones address or mitigate potential risks by being consistently proactive in finding better ways to keep our institutions strong and healthy. The great CFOs would not only keep their institutions strong and steady in an uncertain environment but they will also create new paths that would define the future.
Should CFOs then strive for perfection? Well, the artist Salvador Dali once said “Have no fear of perfection. You’ll never reach it.”
I thought about this quotation. He is right. This is still an imperfect world afterall. However, this should not stop us from being the best that we can be. We can do no less. The stakes are too high.
Dear CFOs, let us go for near perfect. This should also make it more challenging for the organizers and the board of judges to select next year’s winner.
Once again, thank you to all those responsible for the CFO of the Year Award – FINEX President George Chua and ING Country Head Zondy Garcia. And to all who have earned the title CFO of the Year, past and present, our congratulations!
Mabuhay ang Philippine financial sector!
Mabuhay ang ating mahal na bansang Pilipinas!
Mabuhay po tayong lahat!