Monetary Board cuts reserve requirements

September 27, 2019

The Monetary Board on Friday decided to reduce reserve requirements for universal/commercial banks, thrift banks , and rural banks by 100 basis points (or one percentage point). 

The reduction will be effective on the first day of the first reserve week of November 2019, the Bangko Sentral ng Pilipinas said. 

The reduction in reserve requirements will apply to the deposits and deposit substitute liabilities in local currency of banks.

Reserve requirement of universal and commercial banks will be cut from 16 percent to 15 percent, thrift banks from six percent to five percent and rural banks from four percent to three percent. 

The cut in reserve requirements is in line with the BSP’s broad financial sector reform agenda to promote a more efficient financial system by lowering financial intermediation costs.

The adjustment in reserve requirement ratios is aimed at increasing domestic liquidity in support of credit activity, the central bank said. DMS