Question & AnswerQ&A (BSP CIRCULAR NO. 1377 s. 1993)
The purpose of BSP Circular No. 1377 s. 1993 is to amend Books I, II, and IV of the Manual of Regulations regarding the reserve requirement on all types of deposits and deposit substitutes of commercial banks and non-banks with quasi-banking functions by reducing the reserve requirements by a minimum of three percentage points for 1993, subject to quarterly review.
The amendments affect commercial banks with expanded commercial banking authority, regular commercial banks, the Land Bank of the Philippines, the Philippine Amanah Bank, thrift banks including the Development Bank of the Philippines, and non-bank financial intermediaries with quasi-banking functions.
The reserve requirement on demand and savings deposits of commercial banks was reduced from twenty-five percent (25%) to twenty-four percent (24%) effective January 29, 1993; to twenty-three percent (23%) effective April 30, 1993; and to twenty-two percent (22%) effective July 30, 1993.
The reduction in reserve requirements started to take effect on January 29, 1993.
The reserve requirement reduction is implemented in stages: a one percentage point reduction per quarter starting January 29, 1993, moving from 25% to 24%, then to 23% on April 30, 1993, and finally to 22% on July 30, 1993.
Sections 1203, 1214, 1225, 1232, 1236, 1253, and 1283 of Book I of the Manual of Regulations were amended.
Deposit substitute liabilities regardless of maturities of commercial banks, thrift banks, and non-bank financial intermediaries with quasi-banking functions were affected by the reserve requirement changes.
The reserve requirement for deposit substitutes for non-bank financial intermediaries was reduced from twenty-five percent (25%) to twenty-four percent (24%) effective January 29, 1993; to twenty-three percent (23%) effective April 30, 1993; and to twenty-two percent (22%) effective July 30, 1993.
Book II of the Manual of Regulations covers thrift banks, specifically Sections 2203, 2225, 2253, and 2283.
BSP Circular No. 1377 was adopted on January 21, 1993, and approved by Jose L. Cuisia, Jr., the Governor of the Bangko Sentral ng Pilipinas at the time.