It feels responsible and it plays well with the public. But it is, I'd argue, slowly making us a nation of people who can't be trusted to run their own financial lives.
I don't say this lightly, and I don't say it because I think abusive debt collectors or predatory gambling operators deserve a pass. They certainly don’t.
But there's a difference between punishing bad actors after the fact and building a regulatory architecture that assumes every Filipino is one bad decision away from ruin (and, as such, must therefore be protected from ever making that decision in the first place).
We've drifted hard toward the latter in recent years, with a presumptiveness that says “I know better than you what’s good for you.” And I think it's costing consumers something we can’t measure on any balance sheet: the capacity to learn.
Online gambling
Consider the online gambling debate currently consuming social media. The instinct is to ban, cap, or wall off, and treat online gambling platforms the way you'd treat a live grenade. I definitely understand the impulse.
But underneath the moral panic is an assumption that Filipinos, uniquely among the world's consumers, cannot be trusted to decide for themselves how to spend their own money just because some tend to make poor financial decisions.
Many advanced economies have concluded that prohibition simply drives gambling underground. Britain, Denmark and several US states instead license operators, enforce disclosure rules, punish fraud and allow adults to make their own choices, including bad ones. Their goal is not to eliminate gambling but to channel it into regulated markets.
We, on the other hand, reach for prohibition first and treat the development of individual discipline as an afterthought, if we reach for it at all.
Debt collectors
The same pattern shows up in how we've handled abusive debt collection. Yes, the shame-and-harass tactics some online lending apps used a few years back were genuinely vile, and the SEC was right to go after the worst offenders.
But watch what is happening next: instead of letting reputational damage and word-of-mouth do what they do in any functioning market (which is to kill off the worst lenders because nobody borrows from them twice), we are building an entire compliance apparatus around the assumption that borrowers can't tell a predatory app from a legitimate one.
Some can't the first time. But that's exactly the point. The first bad loan, the one where you actually feel the collection call at 11 p.m., teaches a lesson that no regulatory circular ever will.
Regulate away that unpalatable experience and you don't produce a more sophisticated borrower. Instead, you produce one who never developed the instinct to read the fine print, because the state has always read it for him.
Bank transaction fees
Bank fees are the cleanest example of all, because there's no villain in the story — just a market that used to be allowed to work. Go back to the years of President Fidel Ramos, when the BSP under Gov. Gabriel Singson began to deregulate foreign exchange, opened the banking sector to more competition, and largely let banks compete on service and pricing rather than dictating both from the central bank’s ivory tower in Manila.
It wasn't a perfect regime — nothing forged in the years immediately before or after the 1997 East Asian financial crisis was — but it operated on the premise that competition, not a fee schedule handed down from above, was the best long-run protection a depositor could have.
Compare that to today’s regulatory instinct to cap this charge and mandate that disclosure, each addition well-intentioned, each one quietly removing another venue for a bank to actually compete for a customer's business based on price rather than simply comply with a checklist.
(In a market economy like ours, regulators should have no business telling private enterprises how to price their products other than through indirect means, like monetary policy in the case of the central bank.)
The case for ‘caveat emptor’
Of course, none of this is an argument for anarchy. Fraud should be prosecuted, and contracts should be enforced. What I'm arguing against is the reflex to regulate away the discomfort of bad outcomes, because discomfort is precisely the mechanism by which consumers become discerning.
The incoming generation of depositors who will face lower or nonexistent transaction fees will have less impetus to shop around for a better bank because they will have fewer market signals to work with. A generation of borrowers shielded from every predatory lender by state fiat will never develop the radar that lets them spot one on their own.
We are, in effect, trading short-term protection for long-term dependency… and then calling it consumer welfare.
Caveat emptor sounds harsh in a country where so many are one emergency away from real hardship, and I don't pretend the stakes are the same for a jeepney driver as they are for a Makati executive.
But paternalism has substantial costs, too, and they compound quietly over decades. A public that never learns to read a loan disclosure, never learns to walk away from a bad bank, never learns to question anything that "sounds too good to be true" is a warning worth heeding.
The Ramos-era regulators understood that a market left mostly alone, with its winners and its cautionary tales, teaches faster and more durably than any regulator ever could.
We'd do well to remember that the next time regulators and lawmakers reach for a ban instead of letting Filipinos learn — sometimes painfully — on their own.
Senior Reporter
