Increase in Reserve Requirements

April 3, 2014 BSP CIRCULAR NO. 830-14 SUBJECT : Increase in Reserve Requirements The Monetary Board, in its Resolution No. 500 dated 27 March 2014, approved the 1-percentage-point increase in the reserve requirements of universal/commercial banks (UBs/KBs), thrift banks (TBs), rural banks (RBs), cooperative banks (Coop Banks), and non-bank financial institutions with quasi-banking functions (NBQBs). SECTION 1. The provisions of the Manual of Regulations for Banks (MORB) on reserves against deposit and deposit substitute liabilities are hereby amended to read, as follows: "xxx xxx xxx "Subsection X253.1. Required reserves against deposit and deposit substitute liabilities . The rates of required reserves against deposit and deposit substitute liabilities in local currency of banks shall be as follows: Account UBs/KBs TBs RBs/Coop Banks a. Demand Deposits 19 7 5 b. NOW Accounts 19 7 5 c. Savings Deposits 19 7 3 d. Time Deposits, Negotiable CTDs, 19 7 3 Long-Term Non-Negotiable Tax-Exempt CTDs e. Long-term Negotiable Certificate of Time Deposits (LTNCTDs) 1. LTNCTDs under Circular No. 304 4 4 4 2. LTNCTDs under Circular No. 824 7 7 7 f. Deposit substitutes (DS) 19 7 n.a g. DS evidenced by repo agreements 3 3 n.a h. IBCL (Sec. X343) 0 0 0 i. Bonds 5 5 n.a. j. Mortgage/CHM Certificates n.a. 5 n.a. k. Peso deposits lodged under Due to 19 n.a. n.a. foreign banks l. Peso deposits lodged under Due to Head 19 n.a. n.a. Office/Branches/Agencies Abroad (Philippine branch of a foreign bank) "xxx xxx xxx "Subsection X405.5. Reserves against peso-denominated common trust funds and trust and other fiduciary accounts others TEaADS "a. Reserves against peso-denominated CTFs. . . . The required reserves against peso-denominated CTFs and such other managed peso funds which partake of the nature of a collective investment of peso-denominated CTFs shall be as follows: "UBs/KBs 19% "TBs 8% "RBs 4%" "b. Reserves against TOFA Others. . . . "The required reserves against TOFA Others shall be as follows: "UBs/KBs 16% "TBs 8% "RBs 4%" SECTION 2. The provisions of the Manual of Regulations for Non-Bank Financial Institutions (MORNBFI) on reserves are hereby amended to read, as follows: "xxx xxx xxx "Sec. 4253Q (2008-4246Q). Reserves against Deposit Substitutes . NBQBs shall maintain required reserves equivalent to 19% of deposit substitute liabilities as defined in Section 95 of R.A. No. 7653, regardless of maturities except: (a) borrowings from the BSP through the sale of government securities under repo agreements made in connection with the provisions of Sec. 4601Q; (b) deposit substitutes arising from special financing programs of the Government and/or international FIs; (c) interbank call loan transactions under Sec. 4343Q; and (d) bonds under Sec. 4239Q for which the reserve requirement shall be five percent (5%). " Provided, That deposit substitutes evidenced by repo agreements covering government securities up to the amount equivalent to the adjusted Tier 1 capital of the NBQB shall be subject to the reserve requirement of three percent (3%): Provided, further, That such rate shall apply only to repo agreements, the documentation of which conforms with, and were delivered to a BSP accredited third party custodian as required under existing BSP regulations." DIECTc "xxx xxx xxx "Subsection 4405Q.5. Reserves against peso-denominated common trust funds and trust and Other Fiduciary Accounts (TOFA) Others "a. Reserves against peso-denominated CTFs. . . . "The reserves to be maintained shall be 19%. "b. Reserves against TOFA Others. . . . "The reserves to be maintained shall be 16%." This Circular shall take effect on the reserve week starting 11 April 2014. FOR THE MONETARY BOARD: (SGD.) AMANDO M. TETANGCO, JR. Governor