To approve the increase in the reserve requirements for Universal Banks (UBs) and Commercial Banks (KBs) and Non-Bank Financial Intermediaries with Quasi-Banking Functions and with Trust License

CIRCULAR NO. 491 Series of 2005

The Monetary Board, in its Resolution No. 898 dated 7 July 2005, approved the following increase in the reserve requirements for Universal Banks (UBs) and Commercial Banks (KBs) and Non-Bank Financial Intermediaries with Quasi-Banking Functions and with Trust License by 1 percentage point for the statutory/legal reserves and another 1 percentage point for the liquidity reserves, as follows:

A.     Peso Demand, Savings and Time Deposit Liabilities and Deposits Substitutes

Statutory/Legal Reserves

Liquidity Reserves

From

To

From

To

Universal Banks

9%

10%

10%

11%

Commercial Banks

9%

10%

10%

11%

NBFIs with QB Function

9%

10%

10%

11%

B.     Common Trust Funds and Other Similarly Managed Funds (CTF)

Statutory/Legal Reserves

Liquidity Reserves

From

To

From

To

Universal Banks

9%

10%

10%

11%

Commercial Banks

9%

10%

10%

11%

NBFIs with Trust License

9%

10%

10%

11%

C.     Trust and Other Fiduciary Activities (TOFA-Others)

Statutory/Legal Reserves

Liquidity Reserves

From

To

Universal Banks

6%

10%

11%

Commercial Banks

6%

10%

11%

NBFIs with Trust License

6%

10%

11%

D. The required liquidity reserves may be maintained in the form of short-term market yielding government securities purchased directly from the Bangko Sentral Ng Pilipinas – Treasury Department, pursuant to Circular 10 dated 29 December 1993.

The new reserve requirements shall be effective starting for reserve week 15 July 2005.

FOR THE MONETARY BOARD

AMANDO M. TETANGCO, JR Governor