MANILA -- Bangko Sentral ng Pilipinas said on Tuesday it was reducing the reserve requirement ratio (RRR) for bonds issued by banks and quasi-banks to 3 percent, from 6 percent, in line with its commitment to help deepen the local debt market.
The new rate is lower than the RRR on other debt instruments issued by banks such as long-term negotiable certificates of time deposits, which is currently at 4 percent, the BSP said in a statement.
The lower bank RRR for bond issuance is expected to reduce bond issuers' intermediation cost, BSP said. The reduction takes effect beginning Nov. 1.
The move follows a further 100 basis-points cut in the banks' RRR announced on Sept. 27, in line with the BSP's medium-term plan to bring it to a single digit level.
BSP Governor Benjamin Diokno has said the adjustment in the RRR is also aimed at increasing domestic liquidity to support credit growth and the economy.