of continued access to financial services. policies were placed to ensure access to formal financing channels by retail clients, including msmes, during the crisis. the use of information technology in carrying out financial transactions was highly encouraged during the lockdown. support for continued financial services delivery. the bsp granted operational relief measures to assist bsfis in focusing their limited resources on the delivery of financial services to financial consumers, including msmes, and support their subsequent recovery efforts. support for sufficient level of domestic liquidity and economic activity. monetary policy measures were also adopted to support domestic liquidity and extend cheaper financing to borrowers, including msmes. following these time - bound, strong and swift measures, a crucial question is how philippine banks are holding up through the pandemic. based on our recent assessment, our key findings suggest that : a. core funding remains relatively strong following covid - 19 outbreak ; b. bank lending slightly rises ; c. loan quality slightly weakens as borrowers experience cash flow interruptions and sustain 2 / 7 bis central bankers'speeches losses due to the pandemic ; we don ’ t see this trend to extend in the long - run, however. d. financial assets continue to grow but a slower pace as banks opted to reduce treasury activities to be liquid ; e. net income declines as additional provisioning rises. however, this is likely to be offset by lower operating expenses and deferment of capital expenditures and non - essential expenses ; and f. liquidity and capital buffers are intact. the banking system ’ s credit growth continued amidst the pandemic. the banking system ’ s gross total loan portfolio grew year - on - year by 1. 6 percent to p10. 7 trillion as of end - september 2020. from the funding side, the banking system ’ s total deposits rose by 10. 0 percent as of end september 2020 to reach p14. 4 trillion. outstanding deposits are mainly composed of savings deposits ( 47. 0 percent of total deposits ) followed by demand and now deposits ( 26. 9 percent ) and time deposits ( 24. 1 percent ). savings deposits increased by 14. 0 percent as depositors prefer to hold on to cash following the lockdown in luzon in march 2020. in any case, there has been a surge in the use of digital platforms during the lockdown that started in mid - march 2020. the use of pesonet rose remarkably, both in volume and value from september 2019 to september 2020. payments

year — a surprising improvement from our previous forecast of 5 percent contraction — of remittances are projected to rise by four percent next year. on the external front, the overall external position will remain healthy. the balance of payments will post a surplus of usd 8. 1 billion this year and usd 3. 4 billion next year. the current account will also remain in surplus, at usd 6. 0 billion this year and usd 3. 1 billion next year. meanwhile, the country ’ s gross international reserves reached us $ 103. 8 billion as of end october 2020. at this level, the gir remains more than adequate as it can cover 10 months ’ 1 / 7 bis central bankers'speeches worth of imports of goods and payments of services and primary income. the received doctrine is three months ’ worth of imports cover is enough. while the impact is still unfolding, the good news is that the financial system is in a strong position to both weather the adverse effect of the covid - 19 pandemic and support the country ’ s economic recovery. at the outset of the pandemic, the banking system had significant capital and liquidity buffers, built up due to both the strict bsp regulatory requirements and many years of favorable banking conditions. interestingly, the result of our stress tests suggest that banks can continue to lend and prosper through a broad range of adverse scenarios. to assess the impact of the pandemic, the bsp conducted a comprehensive baseline survey in april 2020 and intensified its off - site surveillance of all its supervised financial institutions. the results of these bsp initiatives proved useful for our supervision departments. as the financial sector supervisor, the bsp needs to strike a balance between enabling banks to lend to the firms and households, on one hand, and ensuring the promotion of safe and sound practices to contain the risk exposures of banks on the other hand. the bsp ’ s relief measures are classified in five ( 5 ) main objectives : extension of financial relief to borrowers. bsfis were given regulatory relief to enable them to grant equivalent financial relief to their borrowers, including msmes, in the form of more flexible and favorable lending terms. incentivize lending. the bsp ’ s prudential measures aim to promote financing to msmes and enable these enterprises to carry on with their business during the covid - 19 crisis, as well as hasten recovery and sustainability of their operations, during the post - crisis period. promotion