The Bangko Sentral ng Pilipinas (BSP) said it might be is open to the possibility of lowering down the reserve requirement of banks to increase local liquidity and boost consumer spending, and also to help bring back consumer confidence. Current reserve requirements for banks remain at 19% of total deposit liabilities and initial cuts by the BSP from 21% last November 2008. They say that this 2% cut in rates helped raise P60 B worth of liquity in loanable funds that banks could infuse into the economic system.
Aside from the rate cut made last November, the BSP has also reduced its overnight borrow rate by 125 basis points last December. Currently, the borrowing and lending rates stand at 4.5% and 6.75%.
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