The Central Bank of the Philippines (Bangko Sentral ng Pilipinas, BSP) issued Circular No. 1229 to implement Monetary Board-approved amendments to reserve requirement rules and related reporting under the Manual of Regulations for Banks and the Manual of Regulations for Non-Bank Financial Institutions with Quasi-Banking Functions. The changes include reducing the required reserves against Trust and Other Fiduciary Accounts (ToFA) – Others to zero percent and consolidating several existing reserve-related supervisory reports into a single Weekly Reserve Report (WRR). The circular updates the mechanics for computing reserve positions and penalties, including a seven-day reserve period running Friday to Thursday and rules for handling holidays and other non-clearing days, including when reserve periods are combined into a “single reserve period”. It also sets out that required reserves for the current reference week are based on prior-week reservable liabilities, while available reserves include balances in banks’ Demand Deposit Accounts with the BSP and permitted alternative compliance. Reserve deficiencies are subject to a charge of one-tenth of one percent (1/10 of 1%) of the deficiency, with the ability to offset deficiencies against excess reserves within the same week subject to loss of that privilege in cases of abuse; additional measures for chronic deficiencies include restrictions on access to BSP credit facilities and potential limits on new lending/investments and cash dividends. For thrift banks, the circular also provides for a zero percent reserve against all issues of mortgage/chattel mortgage certificates effective the reserve period starting 27 February 2026. The WRR replaces several existing reports (including Capital Adequacy and Risk Exposure reports on required and available reserves), must be submitted by all banks and non-bank financial institutions with quasi-banking functions, and ToFA-Others reporting remains required even with the reserve rate reduced to zero. The circular takes effect 15 calendar days following its publication, and the BSP indicated that the manner of electronic submission of the WRR and ToFA reports to the Department of Supervisory Analytics will be covered by a separate issuance.
Central Bank of the Philippines 2026-02-11
Central Bank of the Philippines sets zero reserve requirement for ToFA-Others and replaces multiple returns with a Weekly Reserve Report
The Central Bank of the Philippines (BSP) issued Circular No. 1229, amending reserve requirement rules for banks and non-bank financial institutions with quasi-banking functions. Key changes include reducing reserves for Trust and Other Fiduciary Accounts to zero percent and consolidating reserve-related reports into a single Weekly Reserve Report. The circular updates reserve computation mechanics and penalties, with specific provisions for thrift banks and chronic deficiencies.