MANILA— The Philippine central bank said on Thursday it will cut the reserve requirement ratios by 250 basis points for universal and commercial banks and for non-bank financial institutions with quasi-banking functions, effective June 30.
The Bangko Sentral ng Pilipinas (BSP) also lowered the RRR, or the percentage of deposits and deposit substitutes banks must keep with the BSP, by 200 bps for digital banks, and by 100 bps for thrift banks, rural banks, and cooperative banks, it said in a statement.
The measure will bring the RRRs for big lenders to 9.5%, digital banks to 6.0%, thrift banks to 2.0%, and rural and cooperative banks to 1.0%, it said.
“The reduction in reserve ratios is intended to coincide with the expiration of alternative modes of compliance with reserve requirements by end-June 2023 and thereby ensure stable domestic liquidity and credit conditions,” the BSP said.
It added the lower RRR “do not constitute any shift in the BSP’s monetary policy settings”, adding that bringing inflation back towards the target range remains its priority.
—Reporting by Neil Jerome Morales and Enrico Dela Cruz; Editing by Martin Petty