MANILA - The Bangko Sentral ng Pilipinas said Thursday it cut the reserve requirement ratio for banks by one percentage point.
The new requirement will take effect on March 2 and will cover banks and non-bank financial institutions with quasi-banking functions, the central bank said in a statement.
The current reserve requirement ratio requirement currently stands at 20 percent.
A reduced RRR has the potential to stimulate the economy since banks can lend more money instead of keeping it as reserve.
The BSP last week kept borrowing rates steady, even as faster-than-expected inflation put pressure on regulators to tighten policy.