Reduction of Reserve Requirement on Repurchase Transactions

BANEKO SElvrNIL NG PIUITTINES CORRECTED COPY OFFICE OF THE GOVERNOR crRcurAR No.983 Series of 2OL7 Subject: Reduction of Reserve Requirement on Repurchase Transactions fn its Resolution No. 1935 dated 23 November 20L7, the Monetary Board approved the following amendments to the Manual of Regulations for Banks (MORB) and the Manual of Regulations for Non-Bank Financial Institutions (MORNBFI): Section 1. Subsection X253.1 of the MORB shall be amended to reflect the reduction in the reserve requirement rate on repurchase (repo) transactions, as well as set forth the features of the repo program that shall be eligible for the zero reserve rate requirement, as follows: '5X253.1 Required reserves ogainst deposit and deposit substitute liobilities. The rates of required reserves against deposit and deposit substitute liabilities in local currency of banks starting reserve week 1 December 2OL7 shall be as follows: UBs/KBs TBs RBs/ Coop Banks a. Demand Deposits 20% 8% 5o/o b. NOW accounts 20% 8% 5% c. Savings Deposits 2Oo/o 8% 3% d. Time Deposits, Negotiable Certificates of Time 20% 8% 3% Deposits (CTDs), Long-term Non-negotiable Tax Exempt CTDs e. Long-term negotiable certificates of time deposits 4% 4% 4% 1. LTNCTDS under Circular No. 304 7% 7% 7% 2. LTNCTDS under Circular No. 842 f. Deposit Substitutes (DS) 20% 8% NA g. DS evidenced by repo agreement o% 0% NA h. IBCL (Sec. X343) o% o% o% i. Bonds 6% 6% NA i. Mortsaee/CHM cert. NA 6% NA k. Peso deposits lodged under Due to foreign 2O%o NA NA banks L Peso deposits lodged under Due to Head 20% NA NA Office/Branches/Agencies Abroad (Philippine branch of a foreign bank)

Item "8" refers to deposit substitutes evidenced by repo agreements covering Sovernment securities that are transacted in an organized market under the Government Securities Repo Program. xxx" Section 2. Section 4253Q of the MORNBFI shall be amended to reflect the reduction in the reserve requirement rate on repo transactions, as well as set forth the features of the repo program that shall be eligible for the zero reserve rate requirement as follows: "Sec. 4253Q POOB - 4246Q) Reserves Agalnst Deposlt Substltutes. NBQBs shall maintain required reserves equivalent to twenty percent l2}%l of deposit substitute liabilities as defined in Section 95 of R.A. No. 7653, regardless of maturities except: {a} xxx xxx (d) xxx Provided, That deposit substitutes evidenced by repo agreements covering government securities that are transacted in an organized market under the Government Securities Repo Program shall be subject to the reserve requirement of zero percent (0%) starting reserve week l December 2Ot7." Section 3. Subsections X255.5 of the MORB and 4255Q.5 of the MORNBFT shall be deleted. Sectlon 4. This Circular shall take effect on27 November 2017. FOR THE MONETARY BOARD: I |lJ-3_ir NESTOR A. EiPENtuA, Govefnor 'tr A November 2Ot7