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|
|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%|
|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.