The Monetary Board, in its Resolution No. 1699 dated 21 November 2002 as amended by Resolution No. 1768 dated 5 December 2002, approved the following policy changes in order to help promote the development of the small and medium enterprises:

1. To postpone the implementation of the market-based pricing mechanism for rediscount loans as provided for under Circular No. 354 dated 4 October 2002 for a period of one year from 4 October 2002 to 3 October 2003. During said period, the rediscount rate shall continue to be one (1) percentage point below the 91-day Treasury bill rate of the last auction week of the previous month. On 4 October 2003, the rediscount rate shall automatically revert to the market-based pricing mechanism provided for under Circular No. 354. 

2. To reduce the regular reserve requirement to 6 percent for demand deposits, deposit substitutes, and NOW accounts of thrift banks, and for demand deposits and NOW accounts of rural/cooperative banks. The applicable regular reserve requirements for thrift banks and rural/cooperative banks effective 21 November 2002 are as follows:                     

TYPES OF ACCOUNTS		TBs		RBs/Coop Banks
		From	To	From	To
Demand Deposits		8%	6%	7%	6%
NOW Accounts		8%	6%	7%	6%
Deposit Substitutes		8%	6%	n.a.	n.a.
Savings Deposits		6%	6%	2%	2%
Time Deposits/Negotiable
	Certificates of Time
	Deposits/Long Term Non-
	Negotiable Tax- Exempt
	Certificates of Time
	Deposits	6%	6%	2%	2%

The liquidity reserve requirement for deposit and deposit substitute liabilities of thrift banks shall be maintained at 2 percent. 

Adopted: 13 Dec. 2002

(SGD.) RAFAEL B. BUENAVENTURA
  Governor