BSP Working to Eliminate Interbank Transaction Fees

The Bangko Sentral ng Pilipinas (BSP) is collaborating with local banks to eliminate interbank transaction fees, a move aimed at reducing financial burdens on consumers, according to BSP Governor Eli Remolona Jr. The BSP also hinted at further cuts to the reserve requirement ratio (RRR), which may eventually drop to 0% during Remolona’s term.

Currently, the RRR for universal and commercial banks stands at 9.0%, one of the highest in the region. The BSP has already announced a 250 basis point cut, which will take effect on October 25, 2024, bringing the RRR for big banks down to 7.0%, with reductions for digital, thrift, and rural banks as well.

Remolona indicated that further reductions could be in the pipeline, with the ultimate goal of reducing the RRR to zero. He also highlighted that the removal of interbank transaction fees is a priority, particularly for small transactions.

“We’re talking to banks about reducing transaction fees even without further RRR cuts. Our aim is zero fees,” said Remolona.

Bank of the Philippine Islands (BPI) president Jose Teodoro “TG” Limcaoco expressed support for the initiative, noting that while refinements are needed, the draft circular is moving in the right direction.