
What if the Bangko Sentral ng Pilipinas Charter (aka RA 7653 aka New Central Bank Act 1993) was amended to allow the BSP to get back into development spending (including methods like peso depreciation) & possibly help grow the PH economy faster with it?
in brief the BSP is said to have a "single mandate" of just keeping inflation down. not all central banks around the world are limited to this because other countries have central banks that have a 2nd mandate of creating jobs & growth, via development financing—if I understand this right this involves things like deliberate devaluation of currency including printing money (and most Pinoys would be like "the horror! over our 115 million dead bodies!") as well as extensive borrowing to fund large-scale projects like infrastructure & local industry investment.
this wasn't always the case because before 1993 the old Central Bank of the Philippines (founded 1949) had a "dual mandate" like the US Federal Reserve (ironic it's the bank of the US colonisers who imposed the gold standard on PH as a colony in the first place but more on that later); it could engage in development spending, infra. & industry loans &c. ... but since Miguel Cuaderno, its founding head, was so much "more austerity-obsessed than the Americans" he & nearly every central bank governor since (and their teams) focused near-exclusively on the inflation & just followed suit. it finally became their sole legal policy mandate in 1993 ... & they're still doing it today.
AI says this "single mandate" is now more common to central banks around the world today. it might be part of the "neoliberal wave" since the 1980s & it's common in Latin America & even the European Central Bank. in PH it's conventional wisdom because we're all inflation-&-strong-peso-obsessed; per the "jukebox economists" & industrial policy supporters like Leloy Claudio, Stephen Cuunjieng &c. amongst others (with much paraphrasing) it's a possible reason why PH can't develop as fast or as much as other Asian economies, which do allow & aren't scared of depreciation or deficit spending, though minsan via separate development banks or state corporations (in fairness tayo may DBP naman & ADB does help out so there's that?).
one theory BSP was barred from funding developmental projects by borrowing or devaluing is because we're so afraid of taking risks (and its main risks are inflation & corruption) & a lot of this is likely due to economic trauma from the Marcos Sr dictatorship—but Leloy suggests it's even older & a US-colonial original (as in Phil-Am-war-old; also see the early 1920s PNB scandal which was largely due to a post-WWI global economic crisis as much as colonial corruption if not more so), long before US & related agencies like WB & IMF really started pushing neoliberal reforms only in the 1970s-80s. just like with counterinsurgency, militarised policing, red-tagging, disinformation & everything else, yet again PH is a colonial lab rat for bad stuff the US later pushes around the world I guess.
so tl;dr = what if we "make BSP spend again" by amending the BSP charter / RA 7653 / 1993 New Central Bank law to allow it to go beyond just "managing inflation" & get back into the "growth, employment & development mandate"? including developmental borrowing & (shudder) peso devaluation where needed.
based on a post on r/todayIlearnedPH. (and yes I put it in "out of the box" because it's so unheard-of that even suggesting the BSP depreciate the peso is like saying Rizal & Magsaysay weren't perfect & were problematic ganung kalala lol).
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