INQUIRER FILE PHOTO
MANILA, Philippines—The Bangko Sentral ng Pilipinas (BSP) on Thursday asked banks to set aside more deposits as reserves to restrict lending to business and households in line with market expectations.
At its policy meeting, the BSP’s Monetary Board ordered a one-percentage-point-increase in the reserve requirement ratio (RRR) for local banks, a move that is expected to suck up P60 billion in cash from the economy.
Analysts polled by the Inquirer earlier this week telegraphed the BSP decision.
The decision to have more money sitting idle in bank vaults is expected to lead to lower demand, easing pressures that could lead to price instability. Last April, consumer prices rose by an average of 4.1 percent, accelerating from March’s 3.9-percent inflation rate.
For major universal and commercial banks, the RRR now stands at 20 percent. The BSP’s benchmark overnight borrowing and lending rates were kept at their record lows.