NEW BSP CHIEF TO SUSTAIN ECONOMY WITH CASH
Newly appointed Bangko Sentral ng Pilipinas Chief Benjamin Diokno vowed to ease monetary policy in the country and committed to cut banks’ reserve requirements to “single-digit-levels” within his term of office.
Newly appointed Bangko Sentral ng Pilipinas Chief Benjamin Diokno vowed to ease monetary policy in the country and committed to cut banks’ reserve requirements to “single-digit-levels” within his term of office.
According to a report by the Daily Inquirer, the BSP is in the process of cutting bank reserves from 18% to 16%. This started in May and will be completed by the end of this month which will release an estimated P200 billions of previously immobilized funds into the domestic economy.
In an interview, Diokno opened about wanting to lower the bank reserves to single digits by the end of his term in 2023. He also compared the reserve of banks in different countries that would require to keep 1% of their deposits as liquid reserves.
“I’m not saying we’ll go to 1% but definitely single digits. Each percentage point [reduction] is [equivalent to] P100 billion,” Diokno said.
Diokno also said that central bank planners expect the Philippine economy to have grown by at least 6% in the second quarter, after slipping to 5.6% in the first three months of the year due to the delayed passage of the national budget.