Remolona puts clear explanations on par with policy rates
Explaining monetary policy decisions can be as powerful as setting the policy rate, Bangko Sentral ng Pilipinas Governor Eli M Remolona Jr said. He told a SEACEN masterclass that understood messages help shape behavior amid global uncertainty.
Explanations shape behavior too
Bangko Sentral ng Pilipinas (BSP), the central bank of the Philippines, Governor Eli M Remolona Jr addressed the SEACEN Masterclass on Central Bank Communication in Makati City on October 20, 2026.
He welcomed former Governor Duvvuri Subbarao and SEACEN Center Executive Director Cyn-Young Park, whom he congratulated for organizing the event.
Remolona argued that explaining decisions can be equally powerful as the policy rate: rates move money, while the narrative about decisions and their future direction shapes behavior.
Global supply shocks, fragmentation and high uncertainty increase demand for central bank guidance, he said.
Monetary policy works best when people understand the message rather than merely hear it.
From ambiguity to shared language
Remolona said many central banks took cues from the United States Federal Reserve as it became more transparent, issuing policy statements and holding explanatory press briefings.
He contrasted this with former Fed Chair Alan Greenspan's 1987 remarks about deliberate incoherence.
Central bankers now face demands to explain decisions, he said.
The European Central Bank (ECB) faces a multilingual task: it publishes key decisions in the European Union's 24 official languages but uses English as its main working language.
Understanding is the test
Remolona places public understanding alongside the policy instrument itself.
His message focuses on how explanations shape behavior, not on a particular rate decision.
The distinction is between publishing a decision and making its meaning understood.