RRR for bonds cut to 3%

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    The Bangko Sentral ng Pilipinas yesterday said it is reducing the reserve requirement ratio (RRR) for bonds issued by banks and quasi-banks to 3 percent, from 6 percent, in line with its commitment to help deepen the local debt market.

    The new rate is lower than the RRR on other debt instruments issued by banks such as long-term negotiable certificates of time deposits, which is currently at 4 percent, the Bangko Sentral ng Pilipinas (BSP) said in a statement.

    The lower bank RRR for bond issuance is expected to reduce bond issuers’ intermediation cost, BSP said.

    The reduction takes effect beginning November 1.

    The move follows a further 100 basis-points cut in the banks’ RRR announced on Sept. 27, in line with the BSP’s medium-term plan to bring it to a single digit level.

    DIOKNO

    BSP Governor Benjamin Diokno has said the adjustment in the RRR is also aimed at increasing domestic liquidity to support credit growth and the economy. – Reuters