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.