BSP plays key role in steering PH economy toward growth, resiliency

Published July 3, 2022, 12:05 AM

by Manila Bulletin

Established on July 3, 1993 pursuant to the provisions of the 1987 Philippine Constitution and the New Central Bank Act of 1993, the Bangko Sentral ng Pilipinas (BSP) observes its 29th anniversary at an auspicious time: the start of a new administration that has received a clearcut mandate from the sovereign people.

It is well that a few days before the transition to a new government took place, outgoing President Rodrigo Duterte approved the BSP’s updated six-year National Strategy for Financial Inclusion (NSFI) that promotes a whole-of-government and whole-of-nation approach.

As the country is steadily emerging from the health and economic crisis brought about by the coronavirus pandemic, the NSFI’s primary objective is to enable Filipinos to achieve financial resilience. Micro, small and medium enterprises (MSMEs), start-ups, and the agricultural sector are the primary targets. The MSME sector accounts for 63 percent, or almost two-thirds, of total employment and is a major source of livelihood for large segments of the population.

Aside from increased access to finance, the NSFI also seeks to reduce disparities in financial inclusion, improve financial health and resilience and empower consumers by making them more financially capable.

In its charter on inclusive finance, the BSP declares: “When people are financially included and realize their stake in national prosperity, they are empowered to make better, informed choices when it comes to their financial welfare and future. In turn, they are able to make sound decisions that raise their productivity and standard of living.”

This year’s anniversary observance also coincides with a change in the BSP’s leadership.
Erstwhile Governor Benjamin E. Diokno has assumed his new position as Secretary of Finance in the administration of President Ferdinand R. Marcos, Jr. He will now play a lead role in the Cabinet’s economic team, a testament to his commendable credentials in both fiscal and monetary policy making, having served previously as Budget Secretary. His appointment in March 2019 came shortly after the enactment of Republic Act 11211, the new Central Bank Act, that strengthened the BSP by expanding its regulatory power to include price stability. The BSP shall now wield regulatory and examination powers not only over quasi-banking operations of non-bank financial institutions but also over money service businesses, credit granting businesses, and payment system operators. Digital acceleration during the series of lockdowns in 2020 and 2021 enhanced the role of this sector as digital payments expanded exponentially.

The BSP’s new governor, Felipe M. Medalla, has served in the Monetary Board since 2011. In the Estrada administration, he served as secretary of Socioeconomic Planning and director general of the National Economic and Development Authority (NEDA). Indeed, he is eminently qualified to serve at the helm of the BSP. He has affirmed that the new administration’s economic team shall maintain market-friendly policies and a predictable economic environment that will foster inclusive and rapid growth.

The BSP is well-poised to play a key role in steering the country’s economy on an even keel at a time of challenge and opportunity under a new administration.