financial regulation can be a useful tool to contribute to the achievement of national and international environmental objectives. in this regard, the bsp has taken a two - pronged approach to sustainable finance : first, in undertaking capacity building and awareness campaigns ; and second, in mainstreaming environmental and social governance ( esg ) through the issuance of enabling regulations. on the other hand, republic act no. 11439, or “ an act providing for the regulation and organization of islamic banks ” mandates the bsp to exercise regulatory powers and supervision over the operations of islamic banks. this will unlock the full potential of islamic financing in fostering inclusive economic growth. with a well - defined legal framework now in 5 / 7 bis central bankers'speeches place, the bsp looks forward to seeing greater participation in islamic financing by both domestic and foreign banks. this is expected to widen opportunities for our muslim brothers in accessing banking products and services. technological innovations in the provision of financial services have resulted in a myriad of benefits to consumers, including faster processing of transactions, convenience, security, and efficiency. this promotes a more inclusive financial system. bsp data indicate that there is much to be done in the area of financial inclusion in the country. the bsp is intensifying its efforts on digital and financial literacy as well as consumer protection, aimed at deepening the public ’ s knowledge of and trust in our banks and digital financial services. last october 2019, the bsp approved the adoption of the national quick response ( qr ) code standard for payments. the qr technology has emerged as the most convenient and costefficient means of moving funds from one account to another. these twin initiatives on qr code standards and the e - filing and payments system or the efps, among others, ensure the efficiency of payment systems in support of inclusive economic development. the bsp ’ s current approach to financial education focuses on digital content creation and strategic institutional partnerships to generate greater multiplier effect and promote costefficiency and program effectiveness. financial education is expected to benefit students with its inclusion in the schools ’ k - 12 curriculum ; overseas filipinos who attend the pre - departure orientation seminar ( pdos ) and post - arrival orientation seminar ( paos ) ; conditional and unconditional cash transfer recipients ; uniformed personnel ; micro, small and medium enterprises ( msmes ) ; and civil servants. meanwhile, the bsp ’ s consumer assistance mechanism also allows the public to seek redress and

end - april 2020. at the same time, banks showed strong liquidity position by ably servicing cash withdrawals and providing needed financing to the economy. the operational risks from possible disruptions in the delivery of financial services was also a concern duly mitigated by the comprehensive business continuity management ( bcm ) system that banks are required to have. finally, the financial consumers ’ shift to digital payments amidst the need to maintain physical hygiene intensified global cyber - and money - laundering - related risks. nevertheless, the bsp, in coordination with other regulators such as the anti - money laundering council, is prepared to conduct investigations and information awareness campaigns to address cyber threats and financial crimes. the volatility, uncertainty, complexity and ambiguity ( voca ) in the economy and financial system has intensified due to this once - in - a - generation crisis. this has further muddled the task of forecasting and budgeting amongst businesses and policy makers. however, we are confident of the banking system ’ s ability to emerge out of this crisis stronger and more resilient. this optimism is shared by the japan credit rating agency ( jcra ), which gave the country ’ s first ever ‘ a ’ credit rating amid global ratings downgrades. among other factors, jcra underscored the strength of the banking system for its ‘ a - ’ rating and stable outlook. non - performing loans ( npl ) is edging up but remain manageable. the adverse impact of the pandemic on borrowers is expected to exert pressure to the current quality of bank loan portfolio. however, we expect the impact to be manageable due to the banking system ’ s sound risk management systems and financial strength built over decades of strategic reforms implemented by the bsp. another factor is the relatively low leverage of the biggest recipients of the banks ’ loans – the corporate borrowers. in fact, the moderate level of private sector debt in the country is one of the reasons why the philippines retained the s & p global ratings ’ banking industry country risk assessment ( bicra ) of 5 ( with rating of 10 as extremely high risk ) in 2020. this rating is among the best in south east asia. stressed cars meeting regulatory standards. our simulation exercises reinforce the banking system and the banking groups ’ capability to weather assumed stressed scenarios with a postshock car of the system and banking groups easily hurdling the 10 percent regulatory minimum. this was achieved as the banking system and banking groups entered the pan