THE Bangko Sentral ng Pilipinas (BSP) will evaluate requests from thrift banks to ease liquidity requirements on an individual basis.
The regulator is opting against a blanket approach to better reflect differences in each lender’s liquidity profile and operations.
Suzanne Felix, executive director of the Chamber of Thrift Banks (CTB), told the Inquirer that the central bank had indicated it would review applications “on a case-by-case basis.” That is, rather than apply the uniform standard earlier sought by the industry group.
The CTB had urged the BSP to cut the minimum liquidity requirement for thrift banks to encourage lending. They wanted this reduced to 16 percent — the level set during the pandemic — from the current 20 percent.
The group had maintained its proposal even after the recent removal of reserve requirements for thrift banks.
The BSP, however, has resisted the proposal. It maintained that the present threshold is “appropriate” to ensure small lenders can withstand potential stress while continuing to meet client funding needs.
Tailored approach
Felix said a tailored approach would recognize “the differences in liquidity profiles and operational realities among banks.” She said the chamber views this as “constructive as it acknowledges the unique contexts of thrift banks and allows for more balanced regulatory treatment.”
The CTB had argued that thrift banks were effectively setting aside 22 percent of their cash — including the former 2-percent reserve requirement for smaller lenders—as a buffer that earned no returns because it could not be used for lending.
The BSP countered that the MLR and the reserve requirement were “not additive in nature” as they serve different purposes.
The MLR, it said, is a micro-prudential safeguard meant to strengthen banks’ short-term resilience to liquidity shocks. The reserve requirement is a monetary policy tool used to manage the overall volume of domestic liquidity.
“CTB remains committed to monitoring this matter and will revisit it, if necessary, to ensure that industry’s collective concerns are appropriately addressed,” Felix said. (Ian Nicolas P. Cigaral © Philippine Daily Inquirer)
