Mass media, not social media, continues to be a key source of surveillance and monitoring of economic activities that the central bank has been using since the COVID-19 pandemic broke out.
Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno on Thursday, Nov. 18, said the role of media as far as BSP is concerned is more crucial now to preserve market confidence while there is still a public health crisis. The pandemic brought with it data challenges for the BSP which is heavily reliant on standard economic and financial market data.
“The media complements our surveillance efforts,” he said during the BSP’s second Media Lecture series for this year, to brief business journalists per region on BSP policies and advocacies.
The BSP at the start of 2021 has been using media and tracking news sites as surveillance tool to improve the monitoring of COVID-19 impact on the macroeconomy.
The BSP scans useful information such as mobility data and texts analytics from newspaper articles to supplement and complement traditional statistics to measure economic activities.
“Our relationship with media is two-way. We are not just the source of information. The media reports complement the macroeconomic surveillance by our regional offices and branches. You help us get a clearer picture on the ground. This enables us to develop sound, future-proof economic policies, even extraordinary measures if warranted by the situation,” said Diokno.
Mass media includes print media such as newspapers and magazines, TV and radio, and the online edition of print and TV, as well digital-only or internet-based media.
Besides using media as surveillance tool, Diokno said media continues to be a credible source of information and continue to help the BSP to disseminate accurate and relevant information. “The media continues to support the BSP by communicating our programs, policies, and initiatives - contributing to the ongoing conversation on how the BSP is implementing broad-based financial digitalization reforms,” he said.
Diokno said the media also helps in managing the expectations of the market as the BSP has to be more open, transparent and to communicate effectively to make monetary policy decisions clearer and to explain to the public the rationale behind every policy actions.
“It is in a central bank’s best interest to be transparent in its monetary policy actions. Clearly communicating the level of price stability and the strategies to achieve it helps anchor the inflation expectations of the business sector and the public,” he said. “This is good for business and macroeconomic planning since it reduces risk and uncertainty. As they say, good information is good economics.”
The BSP has been adopting mobility indicators as part of its surveillance toolkits to monitor the pace of the gradual reopening of the economy at near-real time. This will aid monetary policymaking to push output growth back to pre-pandemic levels as it enables multilevel analysis of major cities, not just Metro Manila.
The BSP already use mobility indicators for its sectoral nowcasts for GDP growth. The mobility data – gathered from Apple mobility trends and Google community mobility report – are high-frequency indicators that could be integrated into the BSP’s macroeconomic surveillance to compare economic activity before and during the pandemic.
The data on mobility indicators provide a more granular and real-time look at consumer and business activity, and complement the usual macroeconomic indicators such as manufacturing indices and the GDP. It also includes mobility tracker reports from smartphone apps.
The BSP is also studying the use of texts analytics or text mining to monitor any uncertainties in the financial markets using data from newspaper articles. This should track policy uncertainty indices on top of indices to gauge sentiment.
Newspaper articles posted on websites are crucial for this, while information scraped from social media are also monitored, but the BSP relies more on contents from traditional media including digital media.