register a surplus. our international reserves as of end 2016 stood at us $ 81 billion, adequate to cover over 9 months ’ of imports of goods and payment of services, as well as to cushion us from unexpected external shocks. the philippine banking industry played a significant role in helping sustain the pace of growth of our economy. bank lending continued to expand by double - digit rates and went mostly to productive sectors. as of november 2016, consolidated bank loans reached p7. 4 trillion, almost 19 % ( 18. 5 % ) higher than the year - ago level. indeed, the banking sector kept pace with the growth of our economy. total assets of the banking industry reached p13. 2 trillion, over 12 % ( 12. 4 % ) growth from the november 2015 level, while deposits increased by more than 13 % ( 13. 5 % ) to p10. 1 trillion, an all - time high. significantly, asset quality improved further with non - performing loans at 2. 0 % while capitalization 1 / 3 bis central bankers'speeches remained comfortably above the minimum required under national and international standards. and the banks continued to report profits. in other words, ladies and gentlemen, the philippine banking sector not only survived 2016, it continued to thrive. and more than these, our stress tests indicated that our banks can withstand extreme shocks in both credit and market risks. third party analysts also have positive reviews concerning our banking industry. for instance, the philippines is the only banking industry within asia pacific that was given positive outlook by fitch ratings in 2016. meanwhile, moody ’ s recognized our banking industry as the only one within asean that has a stable outlook on all rating factors — operating environment, asset quality and capital, profitability, funding and liquidity. indeed, our banking sector is sound, stable, and continues to be a source of strength for our economy. the philippine economy has recorded 71 quarters of uninterrupted growth. our banks helped nurture this virtuous cycle for our economy. let us therefore congratulate the leaders of our banking industry for making this happen. let us also thank other institutions that support our banking system. of course you and i know that it was not easy getting here. together, the bangko sentral ng pilipinas and the banking sector worked together to continue to strengthen our banking system, raise risk management standards, and align governance standards with international best practices. the process of collaboration has been challenging but our performance does speak for itself.

crises of the banking system and the balance of payments, which eventually materialised. 1 except for currency mismatches, similar developments were evident in the euro area before 2009 – if not at the regional level, at least in those countries that later ran into financial difficulties. it was widely believed that sudden stops in capital flows, not to mention twin see calvo, g. ( 1998 ). “ capital flows and capital - market crises : the simple economics of sudden stops ”, journal of applied economics 1 ( 1 ), pp. 35 – 54, and kaminsky, g. and c. reinhart ( 1999 ). “ the twin crises : causes of banking and balance - of - payments problems ”, american economic review, 89, pp. 473 – 500. a well known example of complacency about east asian growth is the 1993 world bank report on “ the east asian miracle ”. bis central bankers ’ speeches banking and balance of payments crises, could not happen in advanced economies. 2 and yet this is exactly what happened in europe ten years after the asian crisis ( see chart 2 ). it seems therefore useful to look also at east asia ’ s response to its crisis and see what lessons can be learned. one lesson is that a deep and fundamental restructuring of the domestic financial sector is necessary given the financial nature of the asian crisis, this was a key element in resolving it. nonviable financial institutions were closed, viable institutions recapitalised and strengthened, value - impaired assets dealt with and the corporate sector restructured, including through foreign investment. 3 these measures were implemented decisively. they were associated with a painful adjustment process in the crisis countries but, at the same time, they made a swift recovery possible. this experience contrasts with japan ’ s experience in the late 1980s. following the bursting of japan ’ s asset bubble, there was by and large no rapid write - down of non - performing assets. due to the low profitability of banks, it was believed that an immediate write - off of bad loans would prevent compliance with capital requirements. the recognition of losses was postponed and, as a consequence, capital continued to be allocated to investments with limited positive impact on japan ’ s long - term growth potential, which some have called “ zombie lending ” 4. ultimately, this resulted in japan ’ s “ lost decade ”, namely an extended period of anaemic growth ( see chart 3 ). a second lesson is that institutional and structural reforms are essential