BSP turns to ‘big data’ to enhance policies

The Bangko Sentral ng Pilipinas (BSP) is jumping on the decades-old corporate bandwagon of harnessing “big data” to enhance the effectiveness of policies and as part of a wider push to use nontraditional data—including those from social media—in the government as well as among enterprises.

The BSP defines big data as information at high volume, velocity, or variety that cannot be processed using conventional tools and software. Such data needs specific technology and analytical algorithms for its transformation into value for mission-critical processes.

The mining of big data to produce insights on which companies can directly act took a big leap in the corporate world during the late 1990s. This has spawned a new discipline and career known today as data science.

Citing a 2020 survey of the Irving Fischer Committee (IFC) on Central Bank Statistics, which operates under the Bank for International Settlements, Diokno said the number of IFC member central banks worldwide that were actively using big data rose to 80 percent in 2020 from 30 percent in 2015.

Diokno noted that the United States Federal Reserve uses railroad traffic and retail sales data to estimate weekly growth of the US gross domestic product. Also, the central banks of Germany and France use data mined from websites and writings to track the activities of fintech companies in their countries.

“The use of big data technology is expected to further enhance the capacity of the BSP in the areas of economic research and analyses, formulation of monetary and financial stability policies, statistical compilation as well as financial regulation and supervision,” Diokno said.

He said that as early as June 2020, the BSP enhanced its monitoring and surveillance of economic and financial developments, including the impact of COVID-19 on the economy, by using high-frequency mobility indicators to analyze behavioral changes under different lockdown scenarios. INQ