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The Bangko Sentral ng Pilipinas will significantly reduce the reserve requirement ratio of banks this year, with plans for further cuts in 2025, Governor Eli Remolona Jr. said Wednesday.
Reserve requirements are the minimum reserves required for depository institutions. They are set by the central bank within limits specified by law. A change in the minimum reserve ratio affects the amount of deposits a financial institution can lend out. Remolona earlier hinted that the RRR could potentially be lowered to as low as 5 percent from 9.5 percent.
The reduction brought the RRRs of universal and commercial banks and NBQBs from 12 percent to 9.5 percent: digital banks from 8 percent to 6.0 percent; thrift banks from 3 percent to 2 percent; and rural and cooperative banks from 2 percent to 1 percent.
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