Diokno wants RRR down to single-digit during his term

Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno on Wednesday said he wants to cut down the reserve requirement ratio to single-digit during his term, in line with earlier pronouncements of his late predecessor.

"Single-digit -- I cannot tell if its 5(%), 7(%), 9(%). Right now it's 16%, so high," Diokno told reporters on the sidelines of a launch in Manila City.

He was asked if he had a target in terms of how low he wants the reserve requirement by the end of his term, which ends in 2023.

The reserve requirement is the amount of cash a bank must hold in its reserves against deposits made by customers in the Philippines.

Diokno is set to continue to the rest of the term left behind by Espenilla who passed away in February after battling tongue cancer for over a year.

Espenilla in 2017 said he personally wanted to see that the reserve requirement be cut by half under his leadership.

The Monetary Board on May 16 announced the reduction of the RRR of universal and commercial banks by 200 basis points to 16% in three stages from May to July, seen to increase liquidity in the financial system.

"The reserve requirement is really high and so, you know, it doesn't require... You don't need to be an Einstein to recognize that there's really a need for cutting," said Diokno. — RSJ, GMA News