MANILA - The Chamber of Thrift Banks on Tuesday sought the help of the central bank to extend the lower minimum liquidity requirement for thrift banks and to raise the insurance coverage of deposits under the Philippine Deposit Insurance Corp.
The current minimum liquidity requirement of 16 percent "remain at a much higher level so the potential loanable funds remain in low interest securities," Sun Savings Bank president Francisco Paquito Dizon said in a conference.
"There are significant interest risks in investing in low yielding interest securities. Is there a possibility for the MLR to be reduced further, or the 16 percent extended beyond 2020 so thrift banks are in the better position to participate in the anticipated economic recovery?," Dizon said.
Bangko Sentral ng Pilipinas Gov. Benjamin Diokno said the requirement was reduced to 16 percent from 20 percent until the end of 2020 and that it would "reassess" the new request.
“We will reassess based on market conditions, and the ability of thrift banks to manage their portfolios and i can assure you we can move toward more relaxation," Diokno said.
The chamber is also asking to increase the PDIC coverage of deposits to up to P1 million from P500,000.
PDIC provides a maximum deposit insurance coverage of P500,000 per depositor per bank. It covers all types of bank deposits in banks whether denominated in local or foreign currencies.
Diokno said such request requires a review and a collegiate decision by the PDIC board.
-- with a report from Warren de Guzman, ABS-CBN News