amando tetangco : advancing cooperation in an increasingly noncooperative world speech by mr amando m tetangco, jr, governor of bangko sentral ng pilipinas ( bsp, the central bank of the philippines ), at the eu - asean business summit, manila, 10 march 2017. * * * for over 250 years, manila was the port of the galleon trade that fostered two - way trade between asia and europe via mexico. and this year, the 50th anniversary of asean, marks the philippines ’ assumption as chair of the asean, with the responsibility to promote activities related to our regional goals. it is fitting therefore that manila is hosting this year ’ s asean - eu business summit, the objective of which is to promote trade and further strengthen our economic relations. a strong history of friendship a strong history of friendship for 40 years now, binds the asean and the eu. this partnership has established many milestones in terms of economic cooperation, enabling us to enjoy the benefits of robust and dynamic trade and investments, with the accompanying positive effects on overall growth. today, the eu is asean ’ s second largest trading partner, while asean is the eu ’ s third largest trading partner outside europe. in 2016, total trade between asean and eu reached over eur 200 billion ( eur207. 89 billion ), having been on a consistent uptrend for the past four years. opportunities beyond trade the opportunities for stronger economic relations between the eu and asean abound. amb. jessen and eccp president taus mentioned a number of important areas of cooperation. i will add the following for further cooperation : the first is on the development of micro, small and medium enterprises ( msme ) as a platform for promoting inclusive and sustainable growth. both asean and eu give primacy and importance to msmes – in asean, they account from 88 to 99 percent of total establishments, with the large majority of member countries at high 90 %, while in the eu they represent 99 % of establishments. closer cooperation can expand market access for both our msmes, which is crucial for generating employment and ensuring a competitive and dynamic business environment. we need to support their integration into the supply and value - chain. on the policy level, we need to double our efforts to expand their access to finance and other support services. the second opportunity for cooperation is the development of the digital economy, which has been tagged as the fourth industrial revolution. we see how digital trends such

we ’ ve learned our lessons from the asian financial crisis. as of end - 2020, the philippine banking system ( pbs ) has exhibited sustained growth in assets, adequate liquidity buffers, strong capital position, and ample loan loss reserves. the assets of the banking system managed to grow from 2019 by 6. 1 percent to p19. 4 trillion as of end - 2020. the growth was mainly driven by higher deposits, which rose by 8. 9 percent in 2020. the liquidity coverage ratio ( lcr ) of universal and commercial banks as of end - november 2020 was comfortably high at 201. 0 percent, twice the regulatory minimum of 100. 0 percent. similarly, the system ’ s net stable funding ratio ( nsfr ) indicates its ability to provide stable funding in the medium term. as of end - september 2020, the capital adequacy ratio of universal and commercial banks was at 16. 8 percent on a solo basis, and 17. 2 percent on a consolidated basis. this is much higher than the bsp ’ s 10 percent standard and the bank for international settlement ’ s 8 percent standard. on the other hand, credit growth of universal and commercial banks decelerated by 2. 4 percent year - on - year as of january 2021 as banks tightened their overall credit standards for both loans to enterprises and households. non - performing loans and non - performing assets ratios rose to 3. 6 percent and 2. 6 percent, respectively, in december 2020. however, these ratios remain manageable and are much lower than the double - digit levels recorded during the asian financial crisis. while lower consumer spending and business activities continue to dampen bank lending growth, the government is taking measures to propel economic recovery in the country. this may be one of the basis for the banks ’ projections of increases in their loan portfolios by 10. 0 percent to 15. 0 percent over the next two years, these projections are based on the latest bsp ’ s banking sector outlook survey. meanwhile, the enactment of the financial institutions strategic transfer act will aid in the 3 / 4 bis central bankers'speeches industry ’ s management of non - performing loans. in brief, the country is poised for a strong recovery, supported by years of longstanding structural reforms, as well as new measures that are being put in place to prepare for a postpandemic economy – one that is better, greener, more inclusive, and more technology - based. challenge to toap new leadership ladies