BSP slashes rates further, relaxes regulations on compliance reporting

The Monetary Board (MB) of the Bangko Sentral ng Pilipinas (BSP) on Thursday decided to ease policy rates further by 50 basis points, providing economic stimulus amid the coronavirus disease 2019 (COVID-19) health crisis.

In a mobile message, BSP Governor Benjamin Diokno said the MB decided to reduce rates effective Friday, March 20, 2020 — the overnight borrowing rate to 3.25%, the overnight lending to 3.75%, and the overnight deposit rate to 2.75%.

Diokno last month said he is open to more rate cuts this year, on top of the 25 basis point cut decided upon by the MB in February.

"In addition, the MB authorized the time-bound, temporary relaxation of BSP regulations on compliance reporting by banks, calculations of penalties on required reserves, and single borrower limits," Diokno said Thursday.

"The MB also approved a temporary reduction in the term spread of rediscounting loans relative to overnight lending rate to zero," he elaborated.

The detailed guidelines on the measures are scheduled to be released by the close of business on Thursday, March 19.

From 12:00 a.m. on Tuesday, March 17, the entirety of Luzon was placed on enhanced community quarantine until April 13, 2020, restricting travel within the region in efforts to contain the spread of COVID-19.

For its part, the Philippine economic team has since rolled out a P27.1-billion package to help contain the spread of COVID-19 and to provide economic relief to businesses affected by the threat.

Bulk of the amount, equivalent to P14 billion, will be used for programs of the Department of Tourism (DOT), said to be the "most affected." —LDF, GMA News