MANILA – A reduction in the reserve requirement ratio or RRR for banks will stimulate economic activity, boosting banking and property stocks, a fund manager said Friday.
The Bangko Sentral ng Pilipinas said Thursday it would reduce the RRR by 200 basis points to 16 percent over 3 months starting on May 31. This will follow a 25-basis point cut in the benchmark borrowing rate for banks, which was brought down to 4.5 percent last week.
“Any form of easing will bode well for the economy,” said ATR Asset Management head of equities Julian Tarrobago, who manages a $2.4 billion (P126 billion) portfolio.
Tarrobago said was looking to invest in a few banks, “perhaps” in fast-growing small and mid-sized lenders like Philippine National Bank.
The Philippine Stock Exchange Index was up 0.88 percent to 7,541.21 in early trading. The financials sub index was up 1.27 percent while property was up 0.79 percent. (ABS-CBN News)
