MANILA, Feb 15 (Reuters) - The Philippine central bank said on Thursday it was reducing banks’ reserve requirement ratio by 1 percentage point, saying it will support its shift towards a more market-based implementation of its policy.
The cut will bring the amount of reserves banks need to park with the central bank to 19 percent. It will take effect on March 2.
“In deciding to reduce the reserve requirement ratios, the Monetary Board reaffirms the (Philippine central bank‘s) commitment to gradually lessen its reliance on reserve requirements for managing liquidity in the financial system,” it said in a statement.
The central bank had previously flagged a plan to eventually reduce the reserve requirement ratio, one of the highest in the region, as it reduces its reliance on this tool to manage liquidity. It said the move should not be mistaken as a change in monetary policy. (Reporting by Manolo Serapio Jr.; Editing by Kim Coghill)