BSP says digitalization drive to boost PH economic efficiency, lower costs
MANILA, Philippines—The policy framework of the Bangko Sentral ng Pilipinas (BSP) continues to evolve as the regulator recognizes the “wide-ranging implications of digitalization” on central banking functions in a more interconnected world, its chief said on Thursday (May 6).
At an online briefing, BSP Governor Benjamin Diokno said central banking in a digitally-connected world “has never been more challenging, although exciting, than it is now.”
“We witness digitalization on almost every facet of life, and we certainly acknowledge its impact on monetary policy, banking and payment systems,” he said, noting that it could have a taming impact on prices as firms, especially retailers, capitalize on economies of scale offered by digitalization.
As more economic transactions shift to digital, the power of big data can be harnessed to improve economic surveillance and support policy making, he explained.
To fully take advantage of information that becomes available, official statistics used for assessing overall economic health need to evolve to adequately capture the shift in the mode of transactions.
To this end, the BSP underscores that inflation forecasting requires good data as an integral component of the monetary policymaking process.
With the promise of greater efficiency, many new players are attracted to go digital in banking. Many of the innovations in the digital finance ecosystem benefitted from advances pioneered by financial technology startups.
“The BSP calibrates its regulations to better provide a supportive, innovation-friendly policy environment while remaining mindful of the emerging risks,” Diokno said.
To monitor progress in BSP’s digital payments transformation roadmap, the agency also started the consumer payments survey (CPS) in 2020, which gathers information on Filipinos’ awareness, ownership and usage of different payments instruments.
“In a digital world driven by innovations, the urgent task is to keep pace with technology and be responsive to the needs of our time,” Diokno said. “The BSP, as an organization, shall continue to innovate with the financial sector, and shall remain a catalyst of change and an enabler of innovation.”
