These actions have had some success in increasing depository institutions' willingness to borrow. Moreover, the existence of the option to borrow through the discount window, even if not exercised, likely has improved confidence by assuring depository institutions that backstop liquidity will be available should they need it.
In addition, the banking sector—which enjoyed regulatory relief measures from the BSP and with an enabling law to get rid of bad assets (FIST)—will remain strong and stable. The Philippine banking system continues to have capitalization and liquidity levels well above the regulatory requirements, while non-performing loans (NPLs), albeit slightly higher, remain manageable.