There is an important economic point in Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona, Jr.’s recent explanation of the peso’s weakness that should not be dismissed.

Asked by Senator Erwin Tulfo about the peso, the Governor said: “Hangga’t maaari, sana tumaas ’yung savings natin. ’Yun ang long-term na solution… Medyo mahirap sabihin ’to, Senator, pero mayabang tayo eh. May consumption culture ang tawag.” (“As much as possible, I hope our savings increase. That is the long-term solution… It’s a bit difficult to say this, Senator, but we tend to be ostentatious/arrogant. We have what is called a ‘culture of consumption.’”)

The observation should be considered in its broader economic context. If an economy invests more than it saves, it must finance the difference from abroad. That can produce a current-account deficit and, other things being equal, sustained demand for foreign exchange.

The Philippines has indeed had a persistent savings-investment gap. The latest BSP Flow of Funds shows domestic saving rising from P4.46 trillion in 2022 to P5 trillion in 2023, while domestic capital accumulation increased from P5.44 trillion to P5.69 trillion. The gap narrowed but remained negative, meaning the domestic economy was still a net borrower from the rest of the world.

But there is a considerable leap between saying that the country needs to save more and saying that Filipinos are mayabang because they have a “culture of consumption.” The first is an accounting proposition. The second is a cultural judgment. The data support the first much more clearly than the second.

Households are net savers

Consider the household figures. In 2023, household savings rose to about P1.03 trillion from P956 billion in 2022. More importantly, households were net lenders by P181.5 billion, up from P113.1 billion a year earlier. Financial corporations were also net lenders, while non-financial corporations were only marginally net borrowers.

The largest net borrower was the General Government, at about P1.19 trillion.

This does not mean households should not save more. They should. A higher household saving rate would deepen domestic capital markets and strengthen the country’s ability to finance investment internally.

However, the Flow of Funds does not show a nation of dissaving households. It shows households with an aggregate financial surplus alongside a government sector that was the largest net borrower. That distinction matters.

The Philippines can be a consumption-driven economy without Filipinos being culturally irresponsible consumers. For many families, a large share of income devoted to consumption is not conspicuous consumption at all. It covers food, transport, housing, utilities, education and health. It is difficult to save from an income that barely covers basic necessities.

Investment itself should not be treated as a problem. A developing economy such as the Philippines needs to invest in infrastructure, housing, factories, technology and productive capacity. The more important question is whether those investments raise productivity, create jobs, increase incomes and expand the country’s ability to earn foreign exchange.

The current account shows reliance on foreign savings

This brings us to the current account. The Philippines has recorded substantial current-account deficits: $5.9 billion in 2021, $18.3 billion in 2022 and $12.4 billion in 2023. The deficit continued into 2026, reaching $5.66 billion in the first quarter.

But a current-account deficit is not synonymous with consumerism. It is the external expression of a much broader imbalance involving saving and investment, exports and imports, capital flows, productivity and competitiveness.

The Philippines imports energy, machinery, intermediate goods and capital equipment needed to keep an expanding economy operating. It also has a relatively narrow manufacturing base and an export sector that, despite important successes in electronics, IT-BPM and other areas, has not generated enough foreign exchange to comfortably cover structural import requirements.

The question, therefore, should not simply be: Why don’t Filipinos consume less? It should be: Why can’t the economy generate enough savings, productivity and foreign exchange to finance its own ambitions?

When government dissaves substantially

That brings us to the government side of the equation. We should not assume that the precise sectoral pattern of 2023 remains unchanged today, because the latest comprehensive Flow of Funds has yet to be released. Government borrowing, however, remains substantial. National Government debt reached about P19.07 trillion by the end of June 2026.

Borrowing is not inherently bad. A country can borrow to build infrastructure and productive capacity that raise future growth and repayment capacity. The more basic question is: What are we getting for what we borrow?

If borrowed resources build productive infrastructure and make industries more globally competitive, they can strengthen the economy. If they are lost through corruption and plunder, overpricing and commissions, or defective and nonexistent projects, the country is left with the debt but not the asset.

This is where governance becomes a macroeconomic issue.

The ongoing flood-control investigations are a sobering reminder. The Commission on Audit has completed 50 fraud audit reports and transmitted its findings to the Ombudsman, including cases involving projects reportedly found to be nonexistent, improperly located or inadequately documented. These findings remain subject to due process, but they raise a broader economic question: How much growth and productive capacity are being forfeited when public resources are poorly used?

The latest national accounts also caution against oversimplified explanations. In 2025, according to the Philippine Statistics Authority, gross saving rose to P8.40 trillion, compared with gross capital formation of P6.20 trillion. The economy recorded a net lending position of P2.20 trillion.

Yet the external current account remained in deficit.

There is no contradiction here. Net lending in the national accounts and the current account are related, but they are not identical measures. The former incorporates a broader accumulation and capital-transfer framework. The important point is that a complex external position cannot be reduced to a single behavioral explanation.

The latest figures do not present a simple story of Filipinos who cannot stop consuming. They show rising aggregate saving, substantial investment, continuing external financing pressures and significant government financing needs.

What matters next is how these indicators develop together. Updated Flow of Funds data can clarify the sectoral sources of saving and borrowing, while current-account figures can show whether export earnings and other foreign-exchange inflows are keeping pace with import needs. Debt levels and the handling of public projects will also remain relevant to the question of whether borrowing is adding productive capacity.

Structural problems require structural solutions

That is a structural story, and structural problems require structural answers.

Yes, Filipinos should save more. But they also need better opportunities to earn higher incomes that allow them to save more. Businesses need an environment that enables them to invest more productively. Government needs to spend and borrow more responsibly. The country needs to produce more, export more and become more competitive. Public resources also need to be governed with greater discipline, transparency and integrity.

The question, therefore, is not whether Filipinos are mayabang. The better questions are: Are we saving enough? Are we producing enough? Are we earning enough foreign exchange? Are we investing wisely enough? And, perhaps most importantly, are we governing well enough to ensure that every peso we borrow creates economic capacity for tomorrow?

The peso is not a moral verdict on the Filipino people. It is an economic price. It reflects the demand and supply of foreign exchange, the trade and current-account position, capital flows, interest-rate differentials, fiscal conditions, productivity, competitiveness, expectations and external shocks.

Savings matter. Consumption matters. Investment matters. Government borrowing matters. Exports matter. Governance matters. But none of these, by itself, tells the whole story.

The Philippines faces a savings-investment challenge, a productivity and competitiveness challenge, an export and foreign-exchange-earning challenge, and a governance challenge.

The answer is not for Filipinos to consume less out of guilt. It is to build an economy in which Filipinos can save more because they earn more, invest more because opportunities are better, produce more because productivity is higher, and export more because the country is more competitive.

It is also to build a government that can turn every peso of public resources, borrowed or otherwise, into something of lasting value.

When macroeconomics becomes a morality play

There is a danger when macroeconomics becomes a morality play. A currency moves, and people look for someone to blame. A savings gap appears, and it becomes a judgment about character. Consumption rises, and it becomes evidence of supposedly defective values.

But economies are not moral dramas. They are systems of incentives, production, saving, investment, trade, finance and expectations.

Filipinos should certainly be encouraged to save more. Government should borrow and spend more wisely. Businesses should invest more productively. The economy should become more competitive and earn more foreign exchange. But these questions should be raised as economic imperatives, not moral indictments.

The peso will ultimately respond not to a judgment about Filipino character, but to the economic fundamentals the country builds. The peso is an economic price, not a measure of Filipino character.

Diwa C. Guinigundo is the former deputy governor for the Monetary and Economics Sector of the Bangko Sentral ng Pilipinas (BSP). He served the BSP for 41 years. From 2001 to 2003, he was alternate executive director at the International Monetary Fund in Washington, DC. He is the senior pastor of the Fullness of Christ International Ministries in Mandaluyong.

Original article: https://bworldonline.com/opinion/2026/09/11/776029/mayabang-nga-ba-tayo/