Economists Temper Growth Expectations as BSP Cuts Reserve Requirements for Banks and Financial Institutions

The Bangko Sentral ng Pilipinas (BSP) recently announced lower reserve requirements for banks and other financial institutions effective late October. Analysts and economists are welcoming the expected boost in liquidity and its potential growth-inducing effects on the local economy, but other observers argue the move might not necessarily spur higher economic productivity in the short-term if existing interest rates entice banks to invest their extra funds for higher returns.

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