BSP cuts reserve requirement for thrift, savings, coop banks

The Monetary Board of the Bangko Sentral ng Pilipinas (BSP) has decided to cut the reserve requirement ratio (RRR) of mid-sized banks, a week after announcing the same for large banks in the country.

BSP Governor Benjamin Diokno on Thursday afternoon said the MB approved to cut the RRR of thrift banks by 200 basis points to 6% from 8% in three batches—100 basis points effective May 31, 50 basis points effective June 28, and another 50 basis points effective July 26.

"For rural and cooperative banks, the RRR was cut by 100 basis points from 5% to 4%, effective 31 May 2019," he said in a text message.

This move follows the central bank's decision last week to cut the RRR—the amount of cash a bank must hold in its reserves against deposits made by customers—of universal and commercial banks by 200 basis points to 16%.

The BSP last year also reduced the RRR by 200 basis points, as part of the central bank's shift toward a more market-based implementation of monetary policy.

In March, Diokno already hinted at the possibility of easing the RRR once every three months during the next four quarters.

Former BSP Governor Nestor Espenilla Jr. said he wanted to cut the RRR to "single-digit" during his term, which was supposed to end in 2023, but he passed away in February after battling tongue cancer for more than a year. — BM, GMA News