THE Bangko Sentral ng Pilipinas (BSP) is embracing the use of big data to facilitate policy formulation, economic research and the delivery of essential information, among others.
“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,” central bank Governor Benjamin Diokno said.
Big data involves data sets that are too large or too complicated to be analyzed using conventional tools and software. The ability to make use of these data sets is said to be crucial as technologies evolve and the world becomes even more connected.
In particular, the BSP said it enhanced the monitoring and surveillance of economic and financial developments given the impact of the Covid-19 pandemic on the economy. “At a time when official surveys and traditional data collection methods were hampered by strict quarantine restrictions, these indicators proved to be very useful as they provided up-to-date and critical information on the prevailing environment,” Diokno said.
Catching up with the increase in the use of online transactions, the BSP implemented reforms to the country’s foreign exchange regulatory framework with the issuance of Circular 1124 to facilitate e-commerce or digital transactions.
One big data indicator that the BSP is developing is the News Sentiment Index, which aims to gauge consumer and business outlooks versus the prevailing economic environment. Models, however, are still in the early stages of development and have to undergo more testing and enhancements, it said.
In 2019, the BSP partnered with the University of the Philippines for a big data project. At that time, it noted that monetary authorities needed a system to capture, process and analyze the ever-increasing volume and frequency of information needing to be monitored.
The BSP is also working on data-sharing agreements with other government agencies to increase its big data sources.