The Monetary Board (MB) announced today the reduction in the reserve requirement ratio by 100 basis points (or one percentage point) for universal/commercial and thrift banks. Further, the MB complemented the move with a reduction in the RRs for non-bank financial institutions with quasi-banking functions (NBQBs). The reduction will be effective on the first day of the first reserve week of December 2019.
The reserve requirement reduction is in line with the BSP's broad financial sector reform agenda to promote a more efficient financial system by lowering financial intermediation costs.
At the same time, the adjustment in reserve requirement ratios is aimed to ensure sufficient domestic liquidity in support of economic activity.
Source: Bangko Sentral ng Pilipinas (BSP)