The Bangko Sentral ng Pilipinas (BSP) said its recapitalization through the Disbursement Acceleration Program (DAP) benefited the economy, including the poorest Filipinos, because it allowed the central bank to more effectively discharge its responsibility in promoting price and financial stability.
This was the statement made by BSP Deputy Governor Diwa Guinigundo following President Benigno Aquino 3rd’s State of the Nation Address (SONA) on Monday.
In his speech, Aquino highlighted the benefits of the DAP and mentioned that the additional P30 billion recapitalization of the BSP was funded through the stimulus program, parts of which were declared unconstitutional by the Supreme Court early this month.
Discounting the controversy, Guinigundo said in a text message to reporters that the higher capitalization has allowed the Bangko Sentral to more effectively do its job of keeping prices and the financial system stable.
“When prices are stable, the purchasing power especially of the poor is preserved. When prices are stable, businessmen are encouraged to invest and expand their operations and in the process create more jobs,” he stated.
The BSP official said more economic activities allow public revenues to increase and the government is able to put up more roads and bridges, irrigation and drying facilities, more hospitals and hospital beds, and more schools and classrooms.
Financial stability, on the other hand, results in the public’s better access to credit and more secured deposits.
“This is an important ingredient to a higher level of savings, investment and production. More jobs are available, the poor—as long as they are qualified and their skill sets are appropriate—can have hopes for better livelihood,” he said.
“We need to set aside the idea that only public policy that distributes cold cash to the poor or subsidizes their every need is the only mode of public policy that is anti-poverty,” the BSP official added.
Finally, Guinigundo also highlighted the country’s need for macroeconomic stability to create the foundation for a long-term sustainable economic growth that would help improve the people’s skills and abilities while also producing infrastructure that would create jobs and livelihood for them.