Demonetizing large peso bills may harm economy

DEMONETIZING P1,000 and P500 bills as an anti-money laundering measure may bring more harm than good to the economy, a top Bangko Sentral ng Pilipinas (BSP) official said.

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“It’s a tantalizing proposal, but it's not so simple,” BSP Governor Eli M. Remolona, Jr. told reporters on Monday, “To me, it’s like, you know the saying, you cut off your nose just to spite your face. You're doing more damage than benefits.”

Mr. Remolona made the statement in response to former Finance Secretary Cesar V. Purisima’s suggestion to demonetize P1,000 and P500 bills to curb corruption, as it would make it more difficult to transport large sums of cash.

Some lawmakers, Public Works officials and private contractors have been embroiled in alleged corruption scandal involving flood control projects. In a Senate hearing last month, two former Public Works district engineers claimed that around P! billion in cash was packed in suitcases and delivered to a lawmaker.