Monetary Board’s good, expected move

THE Bangko Sentral Monetary Board is living up to its pledge to keep financial stability in our country. It did the perfectly correct move of raising—by one percentage point-- the amount of money banks must have in reserve. That act alone sucks out about P60 billion from the total amount in circulation to keep it out of the public’s hands and in the banks’ vaults.

That serves to make it a bit more difficult for well-to-do people and families to splurge. Spending sprees cause the price of products to go up. That’s because demand for products exceeds the supply and when this happens product sellers raise their prices.