BSP CIRCULAR NO. 726 SERIES OF 2011, June 24, 2011

[ BSP CIRCULAR NO. 726 SERIES OF 2011, June 24, 2011 ]

INCREASE IN STATUTORY/LEGAL RESERVE REQUIREMENTS OF PESO DEPOSIT LIABILITIES AND DEPOSITS SUBSTITUTES

SUBJECT: INCREASE IN STATUTORY/LEGAL RESERVE REQUIREMENTS OF PESO DEPOSIT LIABILITIES AND DEPOSITS SUBSTITUTES

The Monetary Board, in its Resolution No. 871 dated 16 June 2011, approved the increase in the statutory/legal reserve requirements for peso deposit liabilities and deposit substitutes of universal/commercial banks, thrift banks, rural banks, cooperative banks, and non-bank financial institutions (NBFIs) with quasi-banking functions, as follows:

BANK/FINANCIAL INSTITUTION ACCOUNTS STATUTORY/LEGAL RESERVES LIQUIDITY RESERVES

From To

Universal/Commercial Banks -Demand -"NOW" -Savings -Time -Deposit substitutes (DS) 8% 9% 11%

-DS evidenced by repo agreements 1 -Long-term Negotiable Certificate of Time Deposits (LTNCTDs) 2% 3% 0%

Thrift Banks -Demand -"NOW" -Savings -Time -Deposit substitutes 4% 5% 2%

-DS evidenced by repo agreements 1 -LTNCTDs 2% 3% 0%

Rural Banks/Cooperative Banks -Demand -"NOW" 4% 5% 0%

-Savings -Time 1% 2%

-LTNCTDs 2% 3%

NBFIs with quasi-banking functions -Deposit substitutes 8% 9% 11%

-DS evidenced by repo agreements 1 2% 3% 0%

1 Refer to deposit substitutes evidenced by repo agreements covering government securities up to the amount equivalent to the adjusted Tier 1 capital of the bank/quasi-bank and which comply with the conditions provided under Subsection X253.1/ 4253Q of the Manual of Regulations for Banks/Manual of Regulations for Non-Bank Financial Institutions

These new reserve requirement ratios shall take effect on the reserve week beginning on 24 June 2011.

FOR THE MONETARY BOARD

(Sgd.) NESTOR A. ESPENILLA, JR Officer-In-Charge

27 June 2011