Reduction in the statutory/legal reserve requirements for peso demand, "NOW", savings, time deposit liabilities and deposit substitutes of universal banks, commercial banks, thrift banks, rural and cooperative banks, and quasi-banks

CIRCULAR NO. 632 Series of 2008

The Monetary Board, in its Resolution No. 1448 dated 6 November 2008, approved the reduction in the statutory/legal reserve requirements for peso demand, “NOW”, savings, time deposit liabilities and deposit substitutes of universal banks, commercial banks, thrift banks, rural and cooperative banks, and quasi-banks, as follows:

BANK/ FINANCIAL INSTITUTION

ACCOUNTS

STATUTORY/LEGAL RESERVES

LIQUIDITY RESERVES

From

To

Universal Banks/ Commercial Banks

- Demand - Savings - Time -  Deposit Substitutes

10%

8%

11%

- “NOW”

9%

8%

- Long-term Negotiable CTDs

2%

2% 0%

Thrift Banks

- Demand - “NOW” - Savings - Time - Deposit Substitutes

6%

4%

2%

- Long-term Negotiable CTDs

2%

2% 0%

Rural Banks/Cooperative Banks

- Demand

6%

4%

0%

- “NOW”

- Savings

2%

1%

- Time

- Long-term Negotiable CTDs

2%

2%

Quasi-Banks

- Deposit Substitutes

10%

8%

11%

Required reserves for peso-denominated Common Trust Funds (CTFs) and such other similarly managed funds, as well as those for Trust and Other Fiduciary Accounts--Others (TOFA-Others) shall remain at current levels.

These new reserve requirement ratios shall be effective starting with the reserve week beginning 14 November 2008.

FOR THE MONETARY BOARD:

AMANDO M. TETANGCO, JR. Governor