BSP Governor Benjamin Diokno said the Monetary Board decided to implement the reduction in the reserve requirement ratio (RRR) for universal and commercial banks in three stages, starting with 100 basis points effective May 31, followed by 50 basis points on June 28, and another 50 basis points on July 26. For the other types of banks, the cut in RRR will be considered in the next Monetary Board meeting,” Diokno said. The fresh reduction would bring the RRR level to 16 percent from the current 18 percent, and would remain the highest in the region. But the reduction in the RRR level is inflationary as it releases more funds into the financial system, prompting some members of the Monetary Board to oppose the move. Last year, the BSP also slashed the RRR level twice in March and June by a cumulative 200 basis points to 18 percent from 20 percent.
Source: Philippine Star May 16, 2019 12:05 UTC