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BSP announces 'surprise' 200 basis point cut to RRR
The Bangko Sentral ng Pilipinas (BSP) has reduced reserve requirement ratios (RRRs) for banks and non-bank financial institutions by up to 200 basis points, effective March 28, 2025, to stimulate lending and investment.
This move is expected to release between P300 billion and P400 billion of liquidity into the financial system.
Universal and commercial banks' RRRs will be lowered by 200 basis points to five percent, while digital banks' RRRs will be reduced by 150 basis points to 2.5 percent, and thrift banks will experience a 100 basis point reduction to zero percent.
The BSP aims to lessen frictions hindering financial intermediation and enable financial institutions to channel freed-up funds into more productive loans and investments.
Analysts believe this move will further loosen financial conditions, support credit activity, and consequently drive domestic demand and economic growth.
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