September 20, 2024 | 3:03pm
MANILA, Philippines— The Bangko Sentral ng Pilipinas (BSP) on Friday said that it cut reserve requirement ratios (RRR) by 250 basis points (bps) for universal and commercial banks.
The same rate cut applies for non-bank financial institutions with quasi-banking functions.
Meanwhile, the RRR of digital banks was cut by 200 bps, while the reserve requirements of thrift banks and rural banks and cooperative banks were reduced by 100 bps.
The RRR is the percentage of deposits that need to be set aside in the BSP that it cannot lend out.
Following this reduction, the new set of RRRs are as follows:
- Universal and commercial banks, non-bank financial institutions with quasi-banking functions: 7.0%
- Digital banks: 4.0%
- Thrift banks: 1.0%
- Rural banks and cooperative banks: 0.0%
The new ratios shall take effect on October 25, the BSP said.
“The reductions will lower intermediation costs and promote better pricing for financial services. As inflation continues to track a target-consistent path over the next two years, the BSP will reassess the need for further reductions in the RRRs to better align them with regional norms over the medium term,” the BSP said in a statement.
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