Bangko Sentral cuts reserve requirement by 100 basis points

The Bangko Sentral ng Pilipinas on Thursday slashed anew the reserve requirement ratio (RRR) of Philippine banks and non-bank financial institutions.

The central bank’s policy-setting Monetary Board decided to reduce the RRR by 100 basis points effective “the first day of the first reserve week of December 2019.”

“The reduction in reserve requirements will apply to the deposits and deposit substitute liabilities in local currency of banks and with quasi-banking functions (NBQBs).”

Once implemented, the RRR will drop to 14% for both banks and NBQBs, and 4% for thrift banks.

The reserve requirement ratio—the amount of cash a bank must hold in reserves against deposits made by customers—is currently at 15%.

BSP Governor Benjamin Diokno said he wants the reserve requirement ratio down to single-digit level during his term, which is set to end in 2023. —VDS, GMA News