Dear All,
On May 24, 2018, the Bangko Sentral ng Pilipinas (BSP) released Circular 1004 which announced the 100 basis-points Reduction in Reserve Requirements of selected reversable liabilities of universal/commercial banks (UBs/KBs) and non-bank financial institutions with quasi-banking functions (NBQBs). The following provisions of the Manual of Regulations for Banks (MORB) and Manual of Non-bank Financial Institutions are amended.
Section 1. Subsections X253.1 and X405.5 of the MORB on reserves against deposit and deposit substitute liabilities shall now read, as follows:
X253.1. Required reserves against deposits and deposit substitute liabilities. The rates of required reserves against deposit and deposit substitute liabilities in local currency of banks starting reserve week 1 June 2018 shall be as follows:
| Reserve Liabilities | UBs/KBs | TBs | RBs/Coop Banks |
| Demand deposits | 18% | 8% | 5% |
| NOW accounts | 18% | 8% | 5% |
| Savings deposits | 18% | 8% | 3% |
| Time deposits, negotiable certificates of time deposits (CTDs), long-term non-negotiable tax exempt CTDs | 18% | 8% | 3% |
| Long-term negotiable certificate of deposits: | |||
| LTNCTDs under Circular 304 | 4% | 4% | 4% |
| LTNCTDs under Circular 824 | 7% | 7% | 7% |
| Deposit substitutes (DS) | 18% | 8% | NA |
| DS evidenced by repo agreement | 0% | 0% | NA |
| IBCL (Sec. X343) | 0% | 0% | 0% |
| Bonds | 6% | 6% | NA |
| Mortgage/CHM cert. | NA | 6% | NA |
| Peso deposits lodged under Due to foreign banks | 18% | NA | NA |
| Peso deposits lodged under Due to Head Office/Branches/Agencies Abroad (Philippine Branch of a foreign bank) | 18% | NA | NA |
| Basic deposit accounts, as defined in Sec. X222 of the MORB | 0% | 0% | 0% |
For further reading, please see attached pdf copy of BSP Circular 1004.