BSP releases P10B into economy with reserve requirement cut for smaller banks
“The reduction is expected to increase lending capacity of these banks to support financing requirements of their micro-, small- and medium enterprise as well as rural community-based clients,” he explained. “It will also help lower intermediation costs and ease financial strain faced by these banks’ customers.”
Earlier this year, the central bank’s policy making Monetary Board had earlier approved a 200-basis point reduction in the reserve requirements of universal and commercial banks and non-bank financial institutions with quasi-banking functions.
Diokno said the latest reduction is also part of the BSP’s omnibus package of reforms aimed at assisting the banking public with their liquidity requirements during the ongoing coronavirus pandemic and supporting the transition towards a sustainable recovery during the post-crisis period.
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