end - april 2020. at the same time, banks showed strong liquidity position by ably servicing cash withdrawals and providing needed financing to the economy. the operational risks from possible disruptions in the delivery of financial services was also a concern duly mitigated by the comprehensive business continuity management ( bcm ) system that banks are required to have. finally, the financial consumers ’ shift to digital payments amidst the need to maintain physical hygiene intensified global cyber - and money - laundering - related risks. nevertheless, the bsp, in coordination with other regulators such as the anti - money laundering council, is prepared to conduct investigations and information awareness campaigns to address cyber threats and financial crimes. the volatility, uncertainty, complexity and ambiguity ( voca ) in the economy and financial system has intensified due to this once - in - a - generation crisis. this has further muddled the task of forecasting and budgeting amongst businesses and policy makers. however, we are confident of the banking system ’ s ability to emerge out of this crisis stronger and more resilient. this optimism is shared by the japan credit rating agency ( jcra ), which gave the country ’ s first ever ‘ a ’ credit rating amid global ratings downgrades. among other factors, jcra underscored the strength of the banking system for its ‘ a - ’ rating and stable outlook. non - performing loans ( npl ) is edging up but remain manageable. the adverse impact of the pandemic on borrowers is expected to exert pressure to the current quality of bank loan portfolio. however, we expect the impact to be manageable due to the banking system ’ s sound risk management systems and financial strength built over decades of strategic reforms implemented by the bsp. another factor is the relatively low leverage of the biggest recipients of the banks ’ loans – the corporate borrowers. in fact, the moderate level of private sector debt in the country is one of the reasons why the philippines retained the s & p global ratings ’ banking industry country risk assessment ( bicra ) of 5 ( with rating of 10 as extremely high risk ) in 2020. this rating is among the best in south east asia. stressed cars meeting regulatory standards. our simulation exercises reinforce the banking system and the banking groups ’ capability to weather assumed stressed scenarios with a postshock car of the system and banking groups easily hurdling the 10 percent regulatory minimum. this was achieved as the banking system and banking groups entered the pan

the “ new economy ”. moving forward, we are monitoring developments and preparing additional measures to ensure the soundness, stability, resilience and inclusivity of the banking system. to complement our regulatory and supervisory initiatives to mitigate the adverse effect of the covid - 19 pandemic, the bsp sees the need to implement the following legislative measures : the enactment of the financial institutions strategic transfer ( fist ) act. it will assist the financial system in managing the levels of non - performing assets in the industry. the proposed amendment of the new central bank act. this will further strengthen our supervision over financial conglomerates. a deeper understanding of conglomerate risk is important for regulators to be able to mitigate the impact of material issues on the financial system. a law on recovery and resolution planning for banks. this will align the philippine legal framework with international standards the bsp is also strongly supporting measures to accelerate the use of digital platforms to deliver financial services. the use of digital technology in the country will support the government ’ s advocacy on financial inclusion by providing safe and efficient access to essential financial services. lastly, we need to sustain information campaign and strengthen collaboration with stakeholders to combat financial crimes and cyber threats related to the increased use of digital platforms. with the massive shift to digital financial services by clients, as well as work - from - home arrangements in response to covid - 19 pandemic, financial crime and cyber threat levels have surged. as such, the bsp has started on key initiatives to better guide bsp - supervised financial institutions and the public against financial crime and cyber threats. in any case, we need to be mindful of the potential risks. with the rise in unemployment and reduced economic activity, the paying capacity of some household and business borrowers are adversely reduced. thus, we expect some banks to have issues on their credit portfolio. banks are aware of the consequences, which prodded higher provisioning on their loans. rest assured though, that the banks ’ comprehensive risk management systems implemented under close bsp guidance provides the banks with the resources to effectively manage underlying credit risk. the bsp also intensified the monitoring of banks ’ liquidity positions particularly during the 3 / 5 bis central bankers'speeches lockdown period as the uncertainties during the community quarantine might trigger clients to withdraw their deposits. we are happy to report that the public continue to trust the banking system. this may be seen from the observed increase in deposit liabilities based on their reports as of