LIQUIDITY RESERVES

The Monetary Board, in its Resolution No. 1716 dated 4 October 2000,
(a) increased the liquidity reserves against peso demand, savings, time
deposit and deposit substitute liabilities of universal banks (UBs),
commercial banks (KBs) and non-banks with quasi-banking functions
(NBQBs) and certain types of deposit and deposit substitute liabilities
of thrift banks (TBs); and (b) maintained the liquidity reserves against
demand, savings, and time deposits of rural banks (RBs)/cooperative
banks (Coop Banks) at zero, as follows:

A.        LIQUIDITY RESERVES AGAINST DEPOSIT/DEPOSIT SUBSTITUTES

Category of Banks	Liquidity Ratios
UBs/KBs and NBQBs	From 3% to 5%
TBs	From 2% to 4%
RBs/Coop Banks:	To remain at 0%
(1)         Demand Deposit	To remain at 0%
(2)         Savings/Time Deposits	To remain at 0%

The required liquidity reserves may be maintained in the form of
short-term market-yielding government securities purchased directly from
the Bangko Sentral ng Pilipinas (BSP)-Treasury Department, pursuant to
Circular No. 10 dated 29 December 1993.

B.        REGULAR RESERVES

The regular reserves on all types of peso deposits and deposit substitute liabilities shall be maintained as follows:

Types	UBs/KBs	TBs	RBs/Coop Banks	NBQBs
Demand Deposits	9%	8%	7%	N.A.
NOW Accounts	9%	8%	7%	N.A.
Savings Deposits	9%	6%	2%	N.A.
Time Deposits/
Negotiable Certificates of Time Deposits/Long-Term Non- Negotiable Tax-Exempt Certificates of Time Deposits	9%	6%	2%	N.A.
Deposit substitutes	9%	8%	–	9%

C.        INTEREST ON RESERVE DEPOSITS

Deposits maintained by all banks and NBQBs with the BSP up to
forty percent (40%) of the reserve requirement (excluding the liquidity
reserve mentioned in Item A of this Circular against the combined
deposit and deposit substitute liabilities of banks and NBQBs allowed to
be maintained in the form of short-term market-yielding government
securities purchased directly from the BSP-Treasury Department)
maintained by all banks and NBQBs as deposits with the BSP shall
continue to be paid interest at four percent (4%) per annum based on the
average daily balance of said deposits to be credited quarterly.

This Circular shall take effect on 13 October 2000. The basis for
the Computation shall be the relevant levels of liabilities subject to
liquidity reserves, reported starting 6 October 2000.

FOR THE MONETARY BOARD:

Adopted: 6 October 2000

(SGD.) ARMANDO L. SURATOS
Officer-in-Charge