medium to long term because of two factors : first, bulk of the country ’ s external debt have medium and long - term maturity, and second, they carry fixed interest rates. on the banking sector, the philippine banking system remains sound and stable. preliminary data as of end - november 2021 show that total assets of the banking system grew by 7. 0 percent year - on - year to p20. 4 trillion amid improving economic activity. asset expansion was mainly funded by deposits, which increased by 9. 2 percent to p15. 8 trillion.. banks remain profitable. as of end - september 2021, banks ’ net profit grew by 35. 8 percent yearon - year. return on assets ( roa ) was steady at 1. 0 percent, while return on equity ( roe ) rose to 8. 1 percent from 7. 9 percent in the previous year. credit activity has also improved. loans extended by universal and commercial banks rose 4. 6 percent in december, up for the fifth straight month. 2 / 4 bis central bankers'speeches banks are lending more to msmes following the bsp ’ s move to count loans to msmes as alternative compliance with the reserve requirement. as of the week ending 20 january 2022, p209. 2 billion worth of loans to micro, small, and medium enterprises ( msmes ) were used as alternative compliance to the reserve requirement, up from p8. 7 billion reported in april 2020. to further support msmes, the bsp extended the effectivity of some relief measures until end2022, including the increase in the single borrower ’ s limit from 25 to 30 percent. asset quality of banks remains sound. the non - performing loan ratio of the philippine banking system fell to 3. 99 percent in december from 4. 35 percent in november. based on industry feedback, banks expect their npl ratios to remain relatively low and loan - loss provisions to stay high. this is consistent with the bsp ’ s projection that npl ratio of banks will remain in the single - digit territory in the coming years, well below the double - digit figures seen in the aftermath of the 1997 asian financial crisis. the financial institutions strategic transfer or fist act serves as a standby mechanism for banks to dispose their non - performing assets. this law, complemented by recently issued guidelines on the prudential treatment of restructured loans and provisioning requirements, will support effective management of banks ’ npls. banks are well capitalized.

building systems. low - energy materials and processes will be used and observed. and onsite renewable energy will be utilized. in line with the bsp ’ s efforts toward digital transformation, the new bsp complex will also use technological advancements to promote a digital lifestyle without taking away personal interactions within members of the community. 1 / 2 bis central bankers'speeches we are grateful for the efforts that aidea put together in this master development plan. the amount of hard work and the thought process involved in the development of the plan show how well you understood our intention to capture the messages of strength, stability, sustainability, and resilience. we are glad to welcome you onboard, and like your concept for the main building, this day marks two hands reaching out for the filipino – yours and ours. the bsp which will rise here will not just be a regular government office but embodies bsp ’ s vision and aspirations for the country. what will rise here is a bsp complex that is greener, better, smarter, and for the people. thank you, everyone. may we all enjoy this wonderful day! # 2 / 2 bis central bankers'speeches