The Bangko Sentral ng Pilipinas (BSP), reneging on its promise to further lower banks’ deposit reserves, announced on Wednesday a full percentage-point increase to 20 percent effective on Friday.

The long-standing promise had been meant to encourage Filipinos to entrust some of their disposable income with the banks where the money could be put to good use, given the average savings deposit-interest income of just 1 percent a year or even lower at present.

The deposit-reserve increase also effectively denies the banks access to some P38 billion that would otherwise be put to productive use somewhere in the economy.

With the increase, the banks are now forced to set aside 20 centavos, instead of 19 centavos in the past, and may not use them for lending purposes.

BSP Governor Amando M. Tetangco Jr., at the same time, announced the decision to keep the policy rates unchanged at 4.5 percent for borrowing and 6.5 percent for lending, representing rates at which the central bank borrows from or lends to the banks on short-term basis.

According to BSP Deputy Governor Diwa C. Guinigundo, raising the reserve requirement was considered the better alternative to raising the policy rates, which punishes the saver and user of funds alike.

Guinigundo said the deposit-reserve raise, rather than the policy-rate increase that most market watchers had been expecting, was a deliberate preemptive strike against inflation, which continues to trend up in forecasts.

“Touching the deposit-reserve requirement will enhance future policy interest moves because the excess liquidity in the system will blunt the impact of the policy adjustments,” the deputy governor said.

According to Guinigundo, the excess liquidity arising mostly from continued inflow of foreign capital was “the more dominant risk” to stable prices.