01/09/2026
What can the Bangko Sentral ng Pilipinas do beyond interest rates, inflation, and defending the peso?
The Philippines has a Gordian knot of problems. The BSP cannot fix agriculture, electricity, infrastructure, education, or productivity by itself.
But it sits at the center of something powerful:
How money moves through the economy and how money becomes capital.
So rather than asking the BSP to solve everything, I’d focus on seven areas where it has real leverage.
1. Financial inclusion → capital formation
We’ve become very good at making money easy to spend.
E-wallets, QR payments and digital banking have transformed transactions.
The next frontier should be making wealth accumulation equally easy:
Income → Savings → Insurance → Investment → Retirement
Imagine being able to automatically direct even 3 to 5% of every salary or remittance into savings or investments.
Not mandatory. Just frictionless. PERA can do this.
2. Give MSMEs a “Credit Passport”
Small businesses often struggle to borrow because they lack collateral.
But they increasingly leave digital footprints: bank transactions, QR sales, invoices, utilities, taxes, payroll and e-commerce receipts.
With the owner's consent, these could help banks answer a better question.
Not just:
“What property can you mortgage?”
But:
“How reliably does your business generate cash?”
Better data doesn't mean reckless lending. It means better underwriting.
3. Turn remittances into wealth
OFW remittances have supported Philippine consumption for decades.
The next evolution could be:
₱20,000 remittance →
₱16,000 family
₱2,000 savings
₱1,000 protection/retirement
₱1,000 investment
Voluntary and customizable.
Multiply small allocations across millions of OFWs and decades.
We gradually transform an exporter of labor into an owner of capital.
4. Make financial scams harder to execute
Fraud isn't just consumer protection.
It destroys trust and trust is infrastructure.
Banks + e-wallets + telcos + law enforcement should eventually operate a shared fraud-response network:
Transaction → recipient → mule account → SIM/device → downstream accounts.
The objective: freeze and trace stolen money in minutes rather than days.
5. Attack inflation at the right level
Higher interest rates cannot grow onions, produce rice, generate electricity, or lower world oil prices.
But BSP must act when those shocks spread into broader inflation.
So:
Government attacks the source.
BSP prevents the propagation.
DA, DOE, DTI, PSA, DOF and BSP should share a serious real-time picture of where inflation is actually coming from.
6. Deepen Philippine capital markets
Banks are excellent at lending against predictable cash flows and collateral.
But startups, R&D, technology, infrastructure and high-growth businesses often need risk capital.
We need deeper corporate bonds, private credit, investment funds, venture capital and infrastructure securities.
The goal:
Filipino savings → Philippine productive assets.
Financial inclusion shouldn't end with Filipinos owning accounts.
It should eventually mean more Filipinos own capital.
7. Think structurally about the peso
We often talk about “defending the peso.”
But over the long run, a currency reflects the economy underneath it.
If we continually import energy, food inputs, machinery and high-value goods, we continually need foreign currency.
The durable solution isn't simply defending the peso harder.
It's producing and exporting more valuable things.
The BSP cannot build those industries.
But it can help build the financial system that funds them.
This is the bigger loop I'd try to reverse:
Low productivity → low wages → low savings → shallow capital → expensive financing → weak investment → low productivity.
Replace it with:
Financial inclusion → savings → capital → productive investment → productivity → higher wages → more savings → deeper capital markets → greater peso resilience.
That is the bigger opportunity for Philippine central banking.
Price stability protects purchasing power. Financial stability protects savings. Financial development should help Filipinos build and own capital.
The BSP's long-term job isn't only managing the price of money.
It is also improving the plumbing through which money becomes productive capital.
BSP 101
