MANILA - The Philippine central bank said on Tuesday it is reducing the reserve requirement ratio (RRR) for bonds issued by banks and quasi-banks to 3%, from 6%, in line with its commitment to help deepen the local debt market.

The new rate is lower than the RRR on other debt instruments issued by banks such as long-term negotiable certificates of time deposits, which is currently at 4%, the Bangko Sentral ng Pilipinas (BSP) said in a statement.

The lower bank RRR for bond issuance is expected to reduce bond issuers' intermediation cost, BSP said. The reduction takes effect beginning Nov. 1.

The move follows a further 100 basis-points cut in the banks' RRR announced on Sept. 27, in line with the BSP's medium-term plan to bring it to a single digit level. 

BSP Governor Benjamin Diokno has said the adjustment in the RRR is also aimed at increasing domestic liquidity to support credit growth and the economy.

(Reporting by Enrico dela Cruz) ((; +632 841-8934;))