{"id":323424,"date":"2023-05-30T20:00:32","date_gmt":"2023-05-30T12:00:32","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=323424"},"modified":"2023-05-30T20:43:50","modified_gmt":"2023-05-30T12:43:50","slug":"bsp-rrr-cut-2023","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/bsp-rrr-cut-2023\/","title":{"rendered":"BSP may cut reserve requirement ratio (RRR) of banks"},"content":{"rendered":"\n
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Analysis and Recommendation<\/h2>\n\n\n\n

BSP Governor Felipe Medalla telegraphed the possibility of cutting the reserve requirement ratio (RRR), in line with its initial plan of bringing it down to single digits in 2023. The cut, should it take place, will not be announced during the Monetary Board\u2019s policy meeting to communicate that the move is an operational adjustment rather than part of its monetary policy.<\/p>\n\n\n\n

The RRR of 12% only applies to Universal and Commercial banks (U\/KB) and requires them to put up to 12% of their total deposits in reserve. According to BSP\u2019s data as of December 2022, U\/KBs had a total deposit base of P16.7 trillion, translating to around P334 billion of reserves that will be freed up.<\/p>\n\n\n\n

Our View:<\/strong> The cash reserves that will be freed up is equivalent to 2.9% of total outstanding loans by U\/KBs as of March 2023. This does not seem to be substantial especially in light of the withdrawal of the pandemic relief given to MSMEs by June 2023. <\/p>\n\n\n\n

Loans given to MSMEs by U\/KBs of P390 billion were considered as part of reserves which technically freed up the same amount to U\/KBs for lending. Thus, lowering the RRR is indeed operational, as BSP Governor Medalla said, as the capital lent to MSMEs for pandemic relief will be replaced by the reduction in RRR.<\/p>\n\n\n\n

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This report is prepared by PinoyInvestor\u2019s partner broker below. Find out more about our partner brokers<\/a> and sign up to avail their complete trading brokerage services.<\/em><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Here\u2019s a commentary on an important issue or event affecting the stock market<\/p>\n","protected":false},"author":6,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[],"class_list":["post-323424","post","type-post","status-publish","format-standard","hentry","category-special-reports","generate-columns","tablet-grid-50","mobile-grid-100","grid-parent","grid-33"],"_links":{"self":[{"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/posts\/323424","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/comments?post=323424"}],"version-history":[{"count":1,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/posts\/323424\/revisions"}],"predecessor-version":[{"id":323426,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/posts\/323424\/revisions\/323426"}],"wp:attachment":[{"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/media?parent=323424"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/categories?post=323424"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/tags?post=323424"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}