Philippine central bank cuts banks' reserve requirements, effective from late March
FILE PHOTO: A logo of the Bangko Sentral ng Pilipinas (Central Bank of the Philippines) is seen at their headquarters in Manila, Philippines April 28, 2016. REUTERS/Romeo Ranoco/File Photo
MANILA : The Philippine central bank on Friday said it was reducing the reserve requirement ratio (RRR) for banks by 200 basis points from late March.
The reduction will bring the reserve requirement for universal and commercial banks down to 5 per cent and will take effect in the week of March 28, the Bangko Sentral ng Pilipinas said in a statement.
The reserve requirements for digital and thrift banks will fall by 150 bps and 100 bps, respectively, on the same date.
The announcement comes after the BSP last week unexpectedly kept interest rates steady at a policy review. At the time, Governor Eli Remolona said the BSP would likely further trim the reserve requirements for banks but the timing was uncertain.
The BSP last cut RRRs in September by 250 basis to 7 per cent.
"The BSP reiterates its long-run goal of enabling banks to channel their funds more effectively toward productive loans and investments. Reducing RRRs will lessen frictions that hinder financial intermediation," the central bank said.
