Monetary Board cuts banks’ reserve requirement in three stages

May 17, 2019

The Monetary Board on Thursday decided to reduce banks' reserve requirement by 200 basis points, or two percentage points, in three stages starting May 31.

The reserve requirement currently stands at 18 percent.

The first reduction of 100 basis points, or one percentage point, takes effect May 31, followed by a cut of 50 basis points or .5 percentage point on June 28 and 50 basis points on July 26.

''The new policy will apply to universal and commercial banks only,'' said Bangko Sentral ng Pilipinas Governor Benjamin Diokno.

The move follows a reduction of 25 basis points in policy rates last week after first quarter economic growth slowed to 5.6 percent, its slowest pace in four years. DMS