PANGLAO, BOHOL — Bangko Sentral ng Pilipinas (BSP) Governor Eli M. Remolona Jr. stated that further reducing the reserve requirement ratios (RRR) for big banks is not urgent, as the current five percent remains “very low.”

Remolona told a press briefing on Monday, Nov. 24, that the policy-setting Monetary Board (MB) could further lower the RRR for commercial and universal banks but asserted that “there is no urgency in adjusting” the current level.

For the central bank chief, the existing five percent remains “pretty low.” While trimming the ratio is on the table, its timing would be determined by how successful monetary authorities are in managing liquidity or money supply in the financial system.

“I think we can still reduce it, depending partly on how successful we are with normalizing liquidity in the market,” Remolona said during the first Central Banking Symposium (CBS) in Panglao, Bohol.

To recall, the BSP has made a series of reductions until early this year to release more funds into the financial system.

In particular, the ratio for big banks was slashed by 200 basis points (bps) to five percent from seven percent in February this year. The ratio for digital banks was shaved by 150 bps to 2.5 percent from four percent; for thrift banks, it was reduced by 100 bps to zero.

While Remolona affirmed the possibility of another RRR easing, he did not confirm market rumors of an off-cycle easing, which comes against the backdrop of gross domestic product (GDP) growth slowing steeply in the third quarter to four percent—the lowest in four-and-a-half years.

It can be noted that third-quarter GDP expansion also fell significantly short of the already downscaled full-year target of 5.5 to 6.5 percent.

Rizal Commercial Banking Corp. (RCBC) chief economist Michael Ricafort earlier said every one-percentage-point (pp) cut in big banks’ RRR would inject roughly ₱180 billion in additional liquidity into the banking system, potentially boosting lending and investments in areas like fixed income and bonds.

When the RRR was initially adjusted in October 2024, Security Bank Corp. estimated an around ₱387-billion liquidity boost across all banks. For the February easing, Security Bank chief economist Angelo Taningco had expected approximately ₱325 billion in additional liquidity.