Metro Manila, Philippines – Economic managers said the Bangko Sentral ng Pilipinas (BSP) is reviewing its policy limiting daily cash withdrawals to ₱500,000, admitting it was a “knee-jerk reaction” to reports of suspicious transactions linked to the flood control corruption scandal.
The officials disclosed this to Senate finance committee chairman Senator Win Gatchalian on Thursday, Nov. 13, during the plenary deliberations on the proposed ₱6.793-trillion national budget for next year.
“Definitely, this is a knee-jerk reaction,” Gatchalian said. “I understand that they are reviewing this policy because of a lot of negative comments they have been receiving.”
Gatchalian said the BSP policy was prompted by Senator Kiko Pangilinan’s questions during the blue ribbon committee hearings on anomalous flood control projects. Pangilinan had asked how a government contractor managed to easily withdraw nearly half a billion pesos from a small Land Bank of the Philippines branch in Bulacan.
Pangilinan, however, warned that the BSP memorandum restricting large cash withdrawals has caused problems for small businesses, particularly with payrolls.
“Could it have been a contributory factor in the drop in economic transactions?” he asked, referring to the country’s third quarter economic slowdown to 4 percent.
Finance Secretary Ralph Recto, who was in the Senate plenary, acknowledged this possibility, Gatchalian said.
“The BSP acknowledged this and they are now reviewing this policy,” he added.
