second approach. there clearly is a need to make our policies more responsive to the changing environment. just recently, the amendments to the bsp ’ s charter was enacted into law. the new charter amendments restore the bsp ’ s authority to issue debt papers, providing us greater flexibility in determining the timing and size of our monetary operations. the bsp is also given the authority to obtain information from private individuals and entities for its policy formulation. the law also widens the coverage of bsp - supervised financial institutions to include money service businesses, credit granting businesses and payment system operators. these reforms put the bsp in a stronger position to pursue our price and financial stability mandates amid a rapidly evolving environment. in terms of financial stability, the bsp continues to foster a regulatory environment that is both enabling to emerging trends and effective in managing new risks. the bsp ’ s policy reform agenda aims to strengthen risk governance in banks by setting out standards that promote continued enhancement of banks ’ risk management systems. the bsp is guided by the principle of proportionality while pursuing international best practice in its strategic policy objectives. for instance, the monetary board recently approved the extension of the observation period for the basel iii liquidity coverage ratio ( lcr ) and net stable funding ratio ( nsfr ) compliance of thrift banks, that are subsidiaries of universal and commercial banks, up to end - december 2019, moving the effectivity date of said ratios to 1 january 2020. this provides covered banks and quasi - banks sufficient time to build up their liquidity position given the combined impact of these liquidity measures. moreover, enhancements to the lcr and minimum liquidity ratio ( mlr ) methodologies were also approved as a result of the bsp ’ s continuing discussions with the ctb and the rest of the banking industry. starting 1 january 2019, stand - alone thrift banks are already subject to the 20 percent mlr which aims to ensure that covered institutions set aside a liquidity buffer that will enable them to withstand liquidity stress events. to cope with the rapid advances of fintech, we have upped our “ regtech ” game by adopting a regulatory sandbox approach. this allows the bsp to observe and study new products and create appropriate regulations in response. harnessing the bsp multiplier third and the last approach is something i am very passionate about. the magnitude and severity of today ’ s challenges also call for the bsp to go beyond convention and embark on goals outside the am

higher by 6. 0 percent relative to the level a year ago at p530. 1 billion. meanwhile, loans for real estate activities increased by 8. 0 percent to p291. 4 billion relative to last year. sustained by core earnings mainly from lending activities, the tb industry also remained profitable as net profit stood at p15. 8 billion as of end - december 2018 returning 10. 3 percent to owners ’ equity. asset quality has likewise significantly improved. as of end - january 2019, the gross nonperforming loans ( npl ) ratio and non - performing assets ( npa ) of thrift banks have significantly declined to around 5. 4 percent and 5. 7 percent, respectively. these figures were significantly lower compared to their end - december 2001 values of 12. 0 percent and 17. 0 percent, respectively. lastly, the tb industry remains well - capitalized. as of end - september 2018, the subsidiary thrift banks ’ capital adequacy ratio ( car ), on solo basis, of 15. 0 percent remains well above international standards while the car of stand - alone tbs stood at 18. 2 percent. ladies and gentlemen, all these numbers i just mentioned reflect, among others, the thrift banking sector ’ s critical role in supporting the country ’ s inclusive economic growth. the three great challenges ahead 2 / 5 bis central bankers'speeches even as i say this, the evolving operating environment is beset with what i refer to as the three great challenges that could potentially derail our growth trajectory. first is the imbalance or great divergence in global growth. according to the international monetary fund ( imf ), global growth prospects in 2019 remain fragile and uneven as recovery in advanced economies ( aes ) is expected to remain steady, while activity in emerging market economies ( emes ) is projected to slow down. this uneven growth trajectory could potentially trigger portfolio rebalancing and capital flow reversal in emerging markets ( ems ), including the philippines. second is the emergence of what is referred to as the great fragmentation, where policymakers tend to be less able and less willing to collaborate internationally. populist sentiment continues to gain traction in countries around the world. this, in turn, has fueled a greater inclination among governments towards “ inward - looking, ” prisoner ’ s dilemma type of policies. we are in the midst of protracted trade tensions between the us and china. while talks have recently begun between the two countries to potentially outline