Independent senatorial candidate Agnes Escudero wrongly claimed that the country’s economy is dependent on gold reserves.
STATEMENT
In ABS-CBN’s senatorial debate on Feb. 24, senatorial candidates were asked how they plan to address poverty and the rising prices of goods.
Escudero replied:
“Naniniwala ako na itong mga (I believe that this) taxation na ito is part of – what I call – floating economy. But the true economy of our country is on the gold reserve because it is where we print money.”
Source: ABS-CBN News, Harapan 2019: The ABS-CBN Senatorial Town Hall Debate | 24 Feb 2019, Feb. 24, 2019, watch from 34:58 to 35:13
FACT
Escudero is wrong. The Philippines’ monetary policy has not relied on gold – or the “gold standard” – for over seven decades now. Since its creation in 1948, it is the central bank that determines the basis of the country’s monetary policy, which is currently hinged on inflation targets and growth rates.
According to the Bangko Sentral ng Pilipinas (BSP), monetary policy refers to the measures or actions taken by the central bank to influence the “timing, cost and availability of money and credit… for the main objective of stabilizing the price level.”
The gold standard was used only up until the 1940s and 1950s, said policy group Action for Economic Reforms researcher AJ Montesa, who described it as a system where money could only be printed depending on how much gold a country had.
BSP history shows that the country relied on a monetary system “backed by 100 percent gold reserves” during the Commonwealth period from 1935 to 1941:
“The country’s monetary system then was administered by the Department of Finance and the National Treasury. The Philippines was on the exchange standard using the US dollar—which was backed by 100 percent gold reserve—as the standard currency.”
Source: Bangko Sentral ng Pilipinas website, “Creating a Central Bank for the Philippines,” n.d
Sources
Bangko Sentral ng Pilipinas website, “Creating a Central Bank for the Philippines,” n.d.
Bangko Sentral ng Pilipinas website, “Monetary Policy,” n.d.
Bangko Sentral ng Pilipinas website, “Monetary Policy – Glossary and Abbreviations,” n.d.
Lamberte, M. “Central Banking in the Philippines: Then, Now and the Future.” Philippine Institute for Development Studies Discussion Paper Series, 2002(10), 27.
(Guided by the code of principles of the International Fact-Checking Network at Poynter, VERA Files tracks the false claims, flip-flops, misleading statements of public officials and figures, and debunks them with factual evidence. Find out more about this initiative and our methodology.)
(VERA Files is a part of Tsek.ph, a collaborative fact-checking initiative by the academe and the media for the 2019 Philippine midterm elections.)
