MANILA - Bangko Sentral ng Pilipinas (BSP) Monetary Board on Friday cut the reserve requirement for universal and commercial banks, thrift banks and rural banks by 100 basis points effective November 2019.
Reserve requirements for universal and commercial banks was trimmed to 15 percent from 16 percent, thrift banks to 5 percent from 6 percent, and rural banks to 3 percent from 4 percent, data from the BSP showed.
The reduction in reserve requirement will increase domestic liquidity, the BSP said in an advisory.
"The cut in reserve requirements is in line with the BSP’s broad financial sector reform agenda to promote a more efficient financial system by lowering financial intermediation costs," the BSP said.
Governor Benjamin Diokno earlier said that a decision on policy "won't reach November." The goal is to reduce the reserve-ratio requirement for banks down to "single digit" by 2023.
The BSP on Thursday also cut interest rates by 25 basis points for the third time this year, which brought the benchmark rate to 4 percent from 4.75 percent in 2018.
Westpac Banking Corp. head of Macro Strategy-Asia Frances Cheung earlier said the "benign inflation" sets a favorable backdrop for further monetary policy easing within the year.