BSP slashes bank reserves to pump more cash amid COVID-19 economic slowdown

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The Bangko Sentral ng Pilipinas followed through with another liquidity and confidence booster, this time slashing bank reserves to spur more lending and increase economic activity

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"The RR cut is intended to calm the markets and to encourage banks to continue lending to both retail and corporate sectors," Diokno said. For the longest time, banks were required to keep 20 percent of total deposits on hand — among the highest in the world. Financial firms liken this to a tax on banks, as they could not make productive use of the funds.

 

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