Finance Secretary Frederick Go’s entry into the Monetary Board of the Bangko Sentral ng Pilipinas is more than a routine leadership change. It strengthens the policy bridge between Malacañang’s fiscal agenda and the central bank’s monetary decisions at a time when alignment between the two has become increasingly critical.
Bangko Sentral ng Pilipinas Governor Eli Remolona Jr. on Tuesday signaled limited room for further policy rate adjustments in 2026 despite a benign inflation rate environment, reiterating the regulator’s mantra that any adjustment will be data dependent.
The Philippines' net foreign direct investments (FDI) in August 2025 recorded a sharp decline, signaling persistent headwinds for capital inflows despite remaining positive. Data from the central bank show that net FDI inflows amounted to $494 million in August 2025 — a 40.5-percent drop from the $830 million recorded in August 2024.
The local currency opened at P59.15 and touched a record intraday low of 59.26, but strengthened as market participants locked in profits from the peso’s historic fall.
The BSP cited India’s 2016 demonetization as a cautionary tale. The move abruptly invalidated 86 percent of India’s cash, aiming to curb graft and fake currency. Instead, it caused widespread economic disruption—closing small businesses, cutting jobs, and shaving about two percentage points off GDP.
The central bank chief cited a “benign” inflation outlook that remains well within its target range and said inflation expectations “remain well-anchored.” With price pressures easing, policymakers saw room to support economic activity without threatening price stability.
While the BSP’s move would likely target anti-money laundering and fraud risk management, the unintended consequence is a liquidity squeeze on cash-reliant but legitimate businesses. Unless paired with robust digital payment alternatives and financial inclusion measures, the cap risks disrupting day-to-day commerce, particularly outside Metro Manila.
The central bank said it is applying the Anti Financial Account Scamming Act (RA 12010), which took effect in June, to track potential “money muling” — the use of bank accounts to move or conceal criminal proceeds.
The Philippines is a step closer to joining J.P. Morgan’s closely watched emerging market bond index, a move that could attract more foreign investments into the country’s debt market.