Now more than ever, central banks must arm themselves with the capacity to read financial markets and their correlations with the real economy and with the necessary physical infrastructure to efficiently and effectively conduct market transactions and assess their impact on central bank financial statements. Meanwhile, even though profit maximization is not the primary objective of a central bank, keeping an eye on its bottomline is considered necessary because, at the end of the day, its independence rests on it ability to generate financial resources
independent of congressional appropriation. For its part, the Bangko Sentral ng Pilipinas has embarked on activities to enhance its capabilities to investigate and quantify the impacts of economic realities on the transmission mechanism of monetary policy actions to the real economy and to come up with policy prescriptions that will strengthen BSP’s adherence to its mandate of promoting and maintaining
price stability that is conducive to balanced and sustainable growth of the economy.
The BSP’s effectiveness in accomplishing its mandates rests primarily on timely information and analytical inputs that is supported by well-founded understanding of economic relationships and dynamics, and a pool of human capital committed to its vision and objectives. This perspective paper helps set the policy research agenda and cites options for the Bank to cultivate research-oriented human capital.
