By the staff
The Bangko Sentral ng Pilipinas (BSP) is not rushing to cut banks’ reserve requirement ratio (RRR) further, citing the need to manage liquidity even as economic growth moderates.
BSP Governor Eli Remolona Jr. told reporters the central bank still sees room for adjustments to the RRR, but it is not a policy priority.
“I would say it’s on the table, but there’s no urgency in adjusting it,” Remolona said.
Asked whether another reduction was possible this year, he said the decision would depend on monetary conditions, adding that “5 percent is pretty low.”
The BSP on March 28 lowered the reserve ratio to 5% for universal and commercial banks, 2.5% for digital banks, and 0% for thrift banks. The RRR dictates how much of their deposits lenders must keep idle rather than use for loans and investments, helping ensure they can meet withdrawals during periods of stress.
The reserve ratio stood at 9.5% when Remolona took office in 2023. He previously described RRR cuts as a “neutral” liquidity tool that can support lending even when interest rate reductions may weigh on the peso.
