RRR cut like liquidity infusion of ₧310B-₧330B–Nomura By Cai U. Ordinario @caiordinario
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HE decision of the Bangko Sentral ng Pilipinas (BSP) to reduce the reserve requirement ratio (RRR) of banks represents a billions-worth in liquidity infusion, according to market research firm Nomura. Based on the Nomura’s Asia Insights, Senior Economist Euben Paracuelles and Southeast Asian Economist Nabila Amani said the reduction of the RRR is equivalent to a liquidity infusion of about P310 billion to P330 billion or 1.2 percent of the country's full-year 2024 GDP.
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On Friday, BSP decided to reduce the RRR for universal and commercial banks (UKBs); non-bank financial institutions with quasi-banking functions (NBQBs); digital banks; and thrift banks. It also removed the RRR for rural and cooperative banks (RCBs) starting October 25, 2024. “This is comparable with the last RRR cut in June 2023—by a similar 250 bps—but the impact on money supply growth was relatively muted then because it was aimed at offsetting the tightening in liquidity due to the expiry of some pandemic-linked measures,” the Nomura economists said. Earlier, the BSP said it is keen on introducing further refinements to
the securities currently in its toolkit to help deepen capital markets. BSP Monetary Policy Sub-Sector Assistant Governor Zeno Ronald R. Abenoja has already taken steps toward this direction. Abenoja said these include the issuance of multiple tenors for the BSP bills such as the 28-day tenor introduced in September 2020 and the 56day tenor implemented in June 2023. Paracuelles and Amani said instruments such as the term deposit facility (TDF) have been more actively used by the BSP to mop up excess liquidity. "We believe the availability of these new instruments gives BSP the flexibility to manage the liquidity impact
better and as a result, gives it scope to cut the RRR further in a bid to reduce disintermediation risks and make banks more regionally competitive, as we have argued before," they added. Apart from the RRR cuts, the Nomura economists also expect the BSP to continue reducing key policy rates on account of the easing of monetary policy that began in August ahead of the United States Federal Reserve. Last week, the Federal Open Market Committee (FOMC) delivered a 50-bps reduction in key policy rates in the US which is expected to be the first among several reductions in policy rates.
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See “RRR,” A2
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BSP: PHL TO POST BOP SURPLUS TILL NEXT YEAR www.businessmirror.com.ph
By Cai U. Ordinario
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@caiordinario
HE Philippines is expected to continue posting a Balance of Payment (BOP) surplus until next year due to the growth of global demand and the domestic economy, according to the Bangko Sentral ng Pilipinas (BSP).
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Monday, September 23, 2024 Vol. 19 No. 342
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REEF RELIEF SCUBA divers with sacks and tongs
scour the coral reef area in Caban Cove, Tingloy, Batangas, collecting plastic waste during an underwater clean-up for International Coastal Cleanup Day. Led by Marivic Verdadero Maramot, a SCUBA instructor and underwater photographer from Aiyanar Beach and Dive Resort, the divers retrieved floating plastics, including sando bags. Story on the Philippines’s participation in International Coastal Clean-up Day below. DANNY OCAMPO
Based on its third quarter projections, the BSP said the country's BOP surplus may reach $2.3 billion in 2024 and $1.7 billion in 2025. Both estimates are higher compared to its second quarter estimates which projected full-year BOP to reach $1.6 billion in 2024 and $1.5 billion in 2025. “The latest set of forecasts indicate an improvement in the overall BOP position for 2024 and 2025 relative to the June 2024 projection exercise,” BSP said in a statement. “This development is underpinned mainly by the sustained positive global and domestic economic growth prospects, decelerating inflation, as well as the pickup in world trade activity,” it added. See “BSP,” A2
NATIONWIDE COASTAL CLEANUP YIELDS 352K KILOS OF WASTE By Jonathan L. Mayuga
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@jonlmayuga
TOTA L of 352,479 kilograms of garbage were collected during a nationwide coastal cleanup drive, the Department of Env ironment and Natura l Resources (DENR) reported. The DENR, the agency mandated to protect and conserve the country’s natural wealth, has been conducting the annual coastal and riverside cleanup drive to address the garbage menace yet more and
more waste, including plastics and other debris end up in waterways and coastal areas despite the massive information and communication drives. To help curb the problem of ocean plastic pollution and microplastics contaminating the country’s most important protein and food source, the DENR strictly enforces the Extended Producer Responsibility Act (EPR) mandating companies to recover the plastic waste they produce. See “Nationwide,” A2
House vows Sept. 25 okay for ₧6.35-T GAB for 2025 By Jovee Marie N. dela Cruz
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@joveemarie
HE House of Representatives is set to approve the proposed P6.352-trillion General Appropriations Bill (GAB) for 2025 on its third and final reading this Wednesday, anticipating that President Ferdinand Marcos Jr. will certify the 2025 national budget as urgent. S p e a k e r Fe rd i n a nd M a r t i n G. Romua ldez emphasized the House’s commitment to adhering to the deliberation and approval timeline, treating the national budget with urgency while main-
taining transparency. He noted that passing the budget before Congress goes on recess would allow the Senate sufficient time for their own debates and approval process. According to the legislative calendar, Congress will be in recess from September 28 to November 3. “We have sufficient time to finally agree on the budget before year end. It is the most important piece of legislation Congress passes every year,” he said. “Next year’s spending legislation will serve as our tool for sustained See “House,” A2
SM commits to creating new waves with a record-breaking International Coastal Clean-Up. (L-R): Department of Environment and
Natural Resources (DENR) Undersecretary for Organizational Transformation and Human Resources Augusto Dela Pena, SM Mall of Asia Senior Assistant Vice President for Mall Operations Perkin So, SM Supermalls’ President Steven Tan, DENR Secretary Maria Antonia “Toni” Yulo-Loyzaga, Pasay City Mayor Emi Calixto-Rubiano, SM Cares’ Program Director for Environment and Sustainability Liza Silerio, Pasay City Rep. Antonino Calixto, and Nestlé Philippines Head of Corporate Affairs Joey Uy at SM’s International Coastal Clean-Up at the SM by the Bay at the SM Mall of Asia Complex, one of the 15 SM malls where a total of 135,000 kilograms of trash were simultaneously removed by over 23,000 volunteers. SM SUPERMALLS
PESO exchange rates n US 55.7490 n japan 0.3909 n UK 74.0737 n HK 7.1537 n CHINA 7.8920 n singapore 43.1661 n australia 37.9706 n EU 62.2326 n KOREA 0.0423 n SAUDI arabia 14.8569 Source: BSP (September 22, 2024)