information and communication. the non - performing loans ( npl ) ratio and non - performing assets ( npa ) of universal and commercial banks ( u / kbs ) have significantly declined since 2001, to less than 2 percent by june 2017. at the same time, banks ’ capital adequacy ratio ( car ) of 15. 8 percent as of march 2017 remains well above the minimum norms. meanwhile, the external debt situation has also continuously improved. outstanding philippine external debt stood at us $ 73. 8 billion as of end - march 2017, equivalent to just 24 percent of gdp. this is a significant decline from 60 percent in 2005. at this stage, the country is seeing a reversal in its overall balance of payment ( bop ) position which as of july 2017 posted a deficit of us $ 1. 4 billion … the balance of payments deficit can be attributed in part to stronger growth in imports and as well as to rebalancing of portfolio capital flows in line with monetary policy changes in advanced economies. this is manageable and sustainable. we shouldn ’ t forget the positive factors going for the economy. business process outsourcing ( bpo ) receipts reached us $ 5. 5 billion as of q1 2017, growing by 9. 9 percent relative to the same quarter last year. remittances from overseas filipinos ( ofs ) continue to flow in … the inflow of cash remittances from ofs coursed through banks remain steady, reaching us $ 2. 5 billion in june, a 5. 7 - percent increase from the level posted in the same period a year ago … merchandize exports grew by 13. 6 percent in the first half of 2017, faster than projection. as a result, the country ’ s gross international reserves ( gir ) remained ample as of end - july 2017 at us $ 81. 1 billion. this is more than enough to cover 8. 7 months of imports of goods and services and 5. 5 times the country ’ s short - term debt obligations. 2 / 5 bis central bankers'speeches need for vigilance : macroeconomic headwinds despite this favorable economic backdrop, the philippine economy, like other economies, continues to face challenges on both global and domestic fronts. after years of protracted subpar growth, the global economy is finally experiencing a “ firming recovery. ” in its latest world economic outlook ( weo ) in july, the international monetary fund ( imf ) projected global

based capital requirements. the federal reserve and the 2 / 4 bis central bankers'speeches other agencies also raised the threshold for when an appraisal is required for residential real estate loans and tailored safety - and - soundness examinations of community and regional state member banks to reflect the levels of risk present and minimize regulatory burden for banks. these improvements in regulation and supervision have helped right the balance i spoke of earlier between safety and soundness and consumer protection, on the one hand, and the ability to provide financial services and best meet the needs of their customers. we have also considered the impact of our actions, seeking to revise rules that impose significant costs to community banks but provide limited benefit to safety and soundness, consumer protection, or financial stability. as a part of this approach, i have also prioritized efforts to improve the consistency, transparency, and reasonableness of regulation and supervision. one of those efforts is promoting greater consistency in supervisory practices across the federal reserve system. for example, we are actively working to improve the timeliness of providing banks with consumer compliance exam findings. further, we are exploring ways to strengthen our ability to understand, monitor, and analyze the risks that are affecting community banks. a key aspect of consistency is ensuring the same supervisory approach and outcomes for similarly situated institutions, with the goal of ensuring, for example, that a “ one ” composite or component rating in a particular region would be the same for an institution with similar activities and practices in another region. this applies to all areas of our supervisory responsibility, whether safety and soundness, consumer compliance, or analyses of financial stability risk. i ’ d like to expand on one important area of focus, which is essential to the future success of the community banking sector : accessible innovation and technology integration. this subject is one that i speak about frequently with stakeholders and our staff at the board. we are committed to developing a range of tools that will create pathways for banks to develop and pursue potential partnerships with fintech companies. this includes clearer guidance on third - party risk management, a guide on sound due diligence practices, and a paper on fintech - community bank partnerships and related considerations. these tools will serve as a resource for banks looking to innovate through fintech partnerships. technological developments and financial market evolution are quickly escalating competition in the banking industry, and our approach to analyzing the competitive effects of mergers and acquisitions needs to keep pace. the board ’ s framework for banking antitrust analysis hasn ’