such as capital goods, consumer goods, raw materials and intermediate goods is a result of the sustained and broad - based expansion in the domestic economy ’ s capital formation, production and consumption. the increased demand for dollars also reflects residents ’ investments abroad and prepayments of foreign debt. however, continued strong inflows from overseas filipinos ’ remittances, business process outsourcing receipts, and revenues from the tourism sector, are seen to support the current account. meanwhile, we continue to watch against financial market volatility as risks emanating from normalization in advanced economies and ongoing geopolitical tensions may dampen investor sentiment. our financial sector has also demonstrated strength and sustained growth amidst uncertainty. banks have stronger balance sheets and much improved asset quality. there is double - digit growth in assets, loans, deposits and capital. the banking system ’ s resources expanded by 14. 2 percent as of end - july supported by a stable deposit funding base. in line with the country ’ s domestic growth, banks ’ total loan portfolio grew by 17. 9 percent and is diverse across industry sectors. notwithstanding sustained expansion in credit, banks demonstrate prudence in lending. banks ’ npl ratios declined to 1. 98 percent. banks also maintained an adequate buffer for loan losses, registering a higher npl coverage ratio of 113. 13 percent. meanwhile, banks continue to build up their capital position. as of end - march 2017, the capital adequacy ratio ( car ) of universal and commercial banks ( u / kbs ) registered at 15. 8 percent. continuing need for balance we have much going for our economy that outshines seemingly inherent negativity. what is the role of the bsp and what more can it do to protect and advance our solid gains? let me share with you some programs of the bsp key reform agenda … these embody what i describe as “ continuity plus plus ”. the bsp remains committed to its core mandates of maintaining price and financial stability, as 2 / 5 bis central bankers'speeches well as an efficient payments and settlement system. these form part of the “ continuity ” agenda. monetary policy to ensure inflation is kept at a manageable level, the bsp follows an established process in its periodic review of monetary policy. the bsp has been successful in keeping inflation low and stable, in this regard, we will continue with our monetary policy approach and inflation targeting mechanism. with the introduction of the interest rate corridor ( irc

the dollar. the amount outstanding of funds in the call money market has remained generally stable since the middle of june. to date, this has not led to any difficulty in funds settlement, but close attention should be paid to future market developments. with regard to corporate finance, private banks have basically retained their cautious lending attitude. however, constraint that had been caused by severe fund - raising conditions and insufficient capital base has eased considerably. under these circumstances, major banks have gradually become more active than before in extending loans, while carefully evaluating the credit risks involved. however, credit demand for economic activities such as business fixed investment remains weak. in addition, some firms have been trying to reduce debts using their on hand liquidity. as a result, credit demand in the private sector has continued to be weak, and thus private banks ’ lending has remained sluggish. meanwhile, issuance of corporate bonds and cp has recently been steady. the year - to - year growth rate of money stock ( m2 + cds ) has declined to around 3. 5 percent mainly due to the weakness in credit demand in the private sector. in this financial environment, credit conditions have eased somewhat. the following continue to warrant careful monitoring : how actively investors will take risks ; how far private banks will ease their lending stance ; and how these changes will affect economic activities.