Question & AnswerQ&A (BSP MEMORANDUM)
Effective May 15, 1995, the required reserves increased by three percentage points, from 10% to 13%.
On June 15, 1995, there was an additional increase of two percentage points, raising the required reserves from 13% to 15%.
The additional reserve requirements could be met by purchasing government securities directly from the Bangko Sentral ng Pilipinas at one-half percent below the prevailing market rate, with BSP's firm commitment to buy back at any time at prevailing market rates.
No, such reserves can be partly in the form of government securities purchased from BSP or in other forms of eligible reserves such as cash in vault or on deposit with the BSP.
All purchases of government securities must be under the Book Entry System (BES), with no physical certificates issued, and transactions recorded in the securities account of each bank.
Interest and redemption payments are made by BSP automatically credited to the institution's demand deposit account with BSP on the interest payment date and at maturity.
Up to 40% of the reserve requirement (13% less the percentage in government securities not exceeding 3%) can be deposited with BSP to earn 4% interest per annum.
No, it remained at 40% of the required reserves, which is 15% less the percentage in government securities not exceeding 5%.
No transactions with third parties other than BSP shall be recognized.
They are advised to coordinate with the BSP's Government Securities Department for the required documentation for BES participation.
All previous regulations inconsistent with these guidelines are deemed amended, revised, or revoked.