MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) has adopted a multi-pronged approach to deal with the impact of technology on economic growth, stability and financial inclusion. <\/p>\n
BSP Deputy Governor Diwa Guinigundo told members of the Credit Management Association of the Philippines (CMAP) the Philippines is ready for the technological breakthroughs under the Fourth Industrial Revolution. <\/p>\n
He said the regulator continues to refine guidelines and regulations that encourage innovation to improve business operations, risk management and consumer protection in the industry. <\/p>\n
We have put in place policy and regulatory frameworks for the use and acceptability of financial technology. Since this is new to us, we have opted for sandbox approach so that we can test value propositions and allow them to evolve over time until we are completely convinced the idea is feasible and socially useful, he said. <\/p>\n
According to Guinigundo, it is the priority of the BSP to upgrade the financial infrastructure for increased efficiency and access with the launch of the National Retail Payment System (NRPS). <\/p>\n
He said the BSP continues to pursue advocacy programs through the National Strategy for Financial Inclusion to reach the financially excluded become even more relevant and impactful by integrating innovation. <\/p>\n
Business ( Article MRec ), pagematch: 1, sectionmatch: 1 <\/p>\n
Of course, we are cognizant of the myriad of risks and challenges ahead. The central bank needs to remain as the guardian of stability in the digital economy, Guinigundo said. <\/p>\n
He pointed out the BSP need to proactively upgrade policy toolkits to cope with and preempt risks and vulnerabilities through improved analytical surveillance and statistics, integration of technologies into the formal system, and implementation of a framework for law enforcement. <\/p>\n
As innovation advances, he said and so are the means to commit fraud as well as crime like identity theft. <\/p>\n
The digital economy is vulnerable to transgressors and cyber-attacks that could easily undermine the trust and confidence in the financial system. It will always be imperative to support technology that will ensure the security and integrity of the system, he said. <\/p>\n
Water, steam power and electricity ushered the first two Industrial Revolutions, and spread progress in Europe, US and Japan while the dawn of computing and internet sparked the Third Revolution. <\/p>\n
The Fourth Industrial Revolution continues the digital advance but its key differentiating characteristics are the pace of innovation, the velocity of its disruption and the depth of its transformation. <\/p>\n
We now have artificial intelligence or machines that can learn beyond their initial programs and solve problems autonomously. Big data has also emerged, and vast amount of information about our behaviors and relationships can now be collected to predict trends, govern and influence decision-making, he said. <\/p>\n
Authorities, he said, continue to assess the impact of financial technology on the heart of central banking: monetary policy, exchange rate and banking regulation. <\/p>\n
For one, the BSP official said digital currencies could alter the organic composition and evolution of money supply and affect how the central bank could influence aggregate demand. <\/p>\n
Digital currencies, according to him, could be used to circumvent exchange rate policies for cross-border transactions, and in the process undermine the exchange rate. <\/p>\n
These effects combined may impair the central banks ability to influence real activity, result in resource misallocation or price distortion, and threaten price and financial stability, Guinigundo said. <\/p>\n
According to him, the BSP has decided to embrace the innovation, manage the risks, and help absorb the benefits that it offers as there are estimated 119 million mobile phone subscribers and 47 million active Facebook users in the Philippines. <\/p>\n
<\/p>\n
Read the original: <\/p>\n
BSP adopts multi-pronged approach for technology - Philippine Star<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) has adopted a multi-pronged approach to deal with the impact of technology on economic growth, stability and financial inclusion. Continue reading