BSP sets reserve rules for the holidays
THE CENTRAL BANK issued guidelines for the computation of reserve requirements for both banks and quasi-lenders for the upcoming holidays amid reduced reserve days.
Memorandum No. M-2020-094 signed by Bangko Sentral ng Pilipinas (BSP) Deputy Governor Chuchi G. Fonacier on Dec. 18 said the central bank will merge the week leading to Christmas and the New Year into one reserve week.
“The reserve weeks Dec. 18 to Dec. 24 and Dec. 25 to Dec. 31 shall be considered as a single reserve week for the purpose of determining “abuse” of the privilege of offsetting reserve deficiencies against excess reserve during that reserve week,” the memo said.
The memo said the original deadlines are applicable for the two reserve reports ending on Dec. 24 and Dec. 31, respectively.
The BSP also said the usual penalties will await those with reporting violations.
The central bank noted that as Christmas Day on Dec. 25 and Rizal Day on Dec. 30 are regular holidays while Dec. 24 and Dec. 31 are declared as special non-working holidays under Proclamation No. 845, these days will be considered as non-reserve days.
Banks and quasi-lenders comply with the reserve requirements through bank deposits and deposit liabilities that they cannot lend out.
The reserve requirement ratio (RRR) of big banks was slashed by 200 basis points (bps) in April to 12% as part of the BSP’s relief measures during the lockdown caused by the coronavirus pandemic.
In July, the RRRs of thrift and rural banks were also trimmed by 100 bps to two and three percent, respectively.
The Monetary Board has authorized RRR cuts of up to 400 bps this year. — LWTN