New BSP chief says RRR cut remains in the pipeline

MANILA-- Bangko Sentral ng Pilipinas (BSP) Governor Nestor Espenilla Jr. said an adjustment in banks' reserve requirement ratio (RRR) is still in the offing along with other monetary policy tools as part of the central bank's mandate to ensure price stability and sound monetary policy.

In an interview by reporters during the 24th BSP anniversary celebration in Manila, Espenilla said the central bank has a lot of available tools for the conduct of monetary policy.

One of these tools is the RRR, and a cut of which has been suggested for years now.

The new central bank chief said adjustment of the RRR will be done to an appropriate time frame.

He, however, said the changes will not going to happen immediately.

It has to be within a reasonable range because it is important. We have one of the highest in the world. It is an inefficiency to the financial system, he said.

To date, RRR for universal and commercial banks (U/KBs) is 20 percent.

The last time the BSP adjusted the RRR is in May 2014, when it was hiked by a total of 50 basis points, 25 basis points each in March and May, as growth of domestic liquidity grew stronger than in the past years at a level of more than 20 years.

Espenilla said Philippine monetary officials need to find a path to lower the RRR without compromising price stability.

We are having engaged discussions on that. I'd like to see that happen but it is a discussion in the MB (Monetary Board), he added.

Source: Philippines News Agency