English Translation 3.1.8
3.1.8 The Importance of a Kalyāṇamitta*
Thus has been heard by me. On one occasion the Bhagavā was living among the Sakyans at a Sakyan town named Sakyā. There the Venerable Ānanda approached the Bhagavā and, having approached and greeted the Bhagavā, he sat to one side. Having sat on one side the Venerable Ānanda addressed the Bhagavā thus: “This is half of the holy life, Bhante, having virtuous people as friends, companions and colleagues.”
“Don’t say that, Ānanda. Don’t say that. Having virtuous people as friends, companions and colleagues is actually the whole of the holy life. When a Bhikkhu has virtuous people as friends, companions and colleagues, it can be expected that he will pursue the Eightfold Noble Path, that he will develop the Eightfold Noble Path.
And thus through this line of reasoning one may know how having virtuous people as friends, companions and colleagues is actually the whole of the holy life:
It is in dependence on me as a virtuous friend that beings subject to birth have gained release from birth, that beings subject to aging gain release from aging, that beings subject to death gain release from death, that beings subject to sorrow, lamentation, pain, distress and despair gain release from sorrow, lamentation, pain, distress and despair. It is through this line of reasoning that one may know how having virtuous people as friends, companions, and colleagues is actually the whole of the holy life.”
* Upaḍḍhasuttaṃ: Upaḍḍha+sutta: Half + sutta