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 LiabilitiesUBs/KBsTBsRBs/Coop Banks
Demand deposits18%8%5%
NOW accounts18%8%5%
Savings deposits18%8%3%
Time deposits, negotiable certificates of time deposits (CTDs), long-term non-negotiable tax exempt CTDs18%8%3%
Long-term negotiable certificate of deposits:   
LTNCTDs under Circular 3044%4%4%
LTNCTDs under Circular 8247%7%7%
Deposit substitutes (DS)18%8%NA
DS evidenced by repo agreement0%0%NA
IBCL (Sec. X343)0%0%0%
Mortgage/CHM cert.NA6%NA
Peso deposits lodged under Due to foreign banks18%NANA
Peso deposits lodged under Due to Head Office/Branches/Agencies Abroad (Philippine Branch of a foreign bank)18%NANA
Basic deposit accounts, as defined in Sec. X222 of the MORB0%0%0%

For further reading, please see attached pdf copy of BSP Circular 1004.