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bsp 09182024

Lady Vicencio

<div> </div><div> </div>MANILA - The Bangko Sentral ng Pilipinas is planning to reduce the reserve requirement ratio (RRR) for banks this year with further cuts anticipated in 2025, according to BSP Gov. Eli Remolona Jr.Remolona told reporters on Wednesday that a “substantial” reduction is eyed within the year. The RRR sets the amount of funds that financial institutions, such as commercial banks, must hold in reserve against their deposit liabilities. “I have promised a cut in the reserve requirement…I would say it’s gonna happen this year,” Remolona said.“We will reduce the requirement substantially this year and there will be reduction next year,” he added.The BSP earlier signaled to lower the RRR to 5 percent from 9.5 percent for universal and commercial banks to enhance liquidity in the banking system and deepen the country’s financial markets. BSP last reduced the RRR for universal and commercial banks to 9.5 percent in June 2023. Remolona explained that the central bank is considering the timing of the cut.“If there will be an impact, it won’t be immediate because the transmission mechanism has long langs. We take account of those lags… We’re trying to improve the liquidity of the markets to shorten those lags,” Remolona said.BSP Assistant Governor Zeno Abenoja underscored the potential economic benefits of reducing the RRR.“If RRR is adjusted downwards, we are hoping that this additional liquidity will expand productive economic activities. Some of it will be deployed by banks in various financial markets, but some of it will reside in their accounts including depositing it back to the BSP,” Abenoja said.

BSP Gov. Eli Remolona told reporters on Wednesday that a “substantial” reduction is eyed within the year.

BSP Gov. Eli Remolona told reporters on Wednesday that a “substantial” reduction is eyed within the year.

BSP eyes cut in banks' reserve requirement ratio this year, more in 2025

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BSP eyes cut in banks' reserve requirement ratio this year, more in 2025

Lady Vicencio

Published Sep 18, 2024 03:04 PM PHT

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BSP

Bangko Sentral ng Pilipinas

Reserve Requirement Ratio

RRR cut

Gov. Eli Remolona

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