BSP CIRCULAR NO. 260

: Universal Banks (UBs), Commercial Banks (KBs), Non-Banks with Quasi-Banking Functions (NBQBs), and certain types of Thrift Banks (TBs) were affected by the increase in liquidity reserves.
: The liquidity ratio for Universal Banks and Commercial Banks was increased from 3% to 5%.
: They may be maintained in the form of short-term market-yielding government securities purchased directly from the BSP-Treasury Department.
: The liquidity ratio for Rural Banks and Cooperative Banks remains at 0% for demand deposits, savings, and time deposits.
: The regular reserve requirement for demand deposits for Universal Banks and Commercial Banks is 9%.
: No, Non-Banks with Quasi-Banking Functions (NBQBs) are not applicable (N.A.) for regular reserves on demand deposits according to this circular.
: The BSP pays an interest rate of 4% per annum based on the average daily balance of reserve deposits maintained, paid quarterly.
: Banks can maintain deposits with the BSP up to 40% of the reserve requirement (excluding liquidity reserves) and receive interest.
: The circular took effect on October 13, 2000.