shocks. bank ’ s liquidity coverage ratio ( lcr ) stood at 171. 4 percent as of end - march, well above the regulatory minimum of 100 percent. also, the net stable funding ratio of universal and commercial banks, which stood at 129. 1 percent as of end - march, indicates stable funding to serve customers in the short to medium term. outstanding loans of banks as of end - august grew by 4. 4 percent year - on - year. this shows that despite the effects of the pandemic, there is still substantial demand for loans and appetite among banks to lend. the non - performing loans ratio remained modest at 2. 8 percent as of end - august. we may see an uptick in the npl ratio in the coming months as a result of the crisis, but we expect the increase to be manageable. worth noting is that banks have been beefing up their provisioning for bad debts, with the npl coverage ratio standing comfortably at 107. 4 percent as of end - august. despite the increase in loan - loss provisioning, banks stayed profitable as of end - june, with annualized net profit growing year - on - year by 1. 8 percent. the bsp ’ s stress tests point to favorable banking system prospects amid risks. 3 / 5 bis central bankers'speeches results show npls will remain manageable, cars will stay above the 10 - percent requirement, liquidity will be sufficient, and profitability will stay intact. moving on to the final part of my speech, which is where we are steering the philippine economy. the entire government and the bsp are exerting enormous effort not only to help the economy and the filipino people survive this crisis but for us to be even better, stronger, more inclusive, technologically prepared, and more competitive than before the coronavirus pandemic. allow me to briefly expound on how the bsp is working toward this goal. the bsp is pushing for laws that will accelerate recovery and improve the structural makeup of the economy. among the laws we are pushing are : ( i ) the financial institutions strategic transfer or fist bill, which will help banks unload bad assets ; ( ii ) the government financial institutions unified initiatives to distressed enterprises for economic recovery or guide bill, which will provide assistance to distressed firms that are critical for economic recovery ; ( iii ) amendments to the agri - agra law to rationalize the way banks can support agriculture development ; ( iv ) amendments to

bank secrecy laws to aid anti - money laundering and anti - tax evasion efforts, and promote integrity in governance ; and ( v ) amendments to the credit information system act to ease credit access of msmes. meantime, the bsp continues to refine monetary policy and banking regulations. in relation to price stability, the bsp last month started issuing our own securities, as allowed under our recently amended charter. this will help us better manage liquidity. on financial stability, we are committed to a dynamic regulatory environment that reflects an ever - changing landscape for our supervised entities. we will continue to refine regulations, taking into account good corporate governance, sound risk management, efficient financial intermediation, and effective customer service. the bsp is actively promoting financial technology, which helps speed up payments and capital turnaround and therefore boosts income and economic growth. my personal goal is that half of financial transactions in the country should be digital by 2023, the end of my term. but with enabling regulations and the pandemic, this may be achieved sooner — perhaps by the end of 2022. in fact, we have seen an exponential increase in the use of e - payments platforms instapay and pesonet. we have launched mobile apps for savings and investments. we have rolled out programs that pave the way for an extensive use of the qr code system for payments. the bsp embraces regulation technologies or “ regtech, ” which facilitate efficient delivery of regulatory requirements. the bsp has also pilot - tested a chatbot that can handle questions and concerns sent by the public through digital platforms with the use of artificial intelligence. amid these encouraging developments, the bsp has kept a sober eye on risks accompanying the use of electronic data. 4 / 5 bis central bankers'speeches in line with this, the bsp has launched a three - year digital payments transformation roadmap, which is anchored on promoting access to financial products through digital platforms, with appropriate safeguards. the roadmap has three pillars : ( i ) development of digital payment streams ; ( ii ) establishment of interoperable digital payments ecosystem ; and ( iii ) implementation of digital governance standards for consumer protection. with the roadmap, we expect digital banks to play a key role in expanding access to a broad range of financial services. the bsp will be introducing digital banks as a distinct bank classification. all these initiatives put the bsp at the forefront of the philippines ’ goal of becoming