Liquidity Without Output II: The Philippine Banking System Under Late-Cycle Containment

 

If you depreciate the money, it makes everything look like it’s going up – Ray Dalio 

In this issue: 

Liquidity Without Output II: The Philippine Banking System Under Late-Cycle Containment

I. Nota Bene—Data Revision and Structural Divergence

II. Acceleration Without Circulation; Containment and Redistribution

IIA. When Banks Absorb What the Economy Will Not

IIB. Rising Monetary Aggregates, Mounting Systemic Leverage

IIC. Fiscal Backstopping at Pandemic Scale, Financial Market Signals: Liquidity Without Conviction

IID. Peso Dynamics: Stability Through Management; MAS vs. DCS: Divergence as Structural Signal

III. The Wile E. Coyote Phase: Optics in Motion

IIIA. Broad-Based Plateauing Across Core Sectors

IIIB. Liquidity Redirected, Not Transmitted

IIIC. The NPL Paradox

IIID. Duration Losses Surface First

IIIE. The Redistribution of Strain

IIIF. Reserve Cuts: Policy Choreography in Motion

IIIG. Late-Cycle Containment

IIIH. Concentration, Price Discovery, and Balance-Sheet Feedback

IV. Conclusion Regime Recognition: Liquidity as Containment, Not Expansion 

Liquidity Without Output II: The Philippine Banking System Under Late-Cycle Containment 

Stability by Refinancing: The Philippine Banking System Under Containment 

I. Nota Bene—Data Revision and Structural Divergence 

The BSP revised December’s currency-in-circulation growth from 17.7% to 6.4%. This does not alter the central observation: liquidity creation at the monetary authority level continues to exceed the pace of circulation in the broader economy, which highlights the opacity of late-cycle aggregates. The argument herein rests on persistent balance-sheet divergence, or that stability is maintained through optics rather than fundamentals. 

II. Acceleration Without Circulation; Containment and Redistribution

IIA. When Banks Absorb What the Economy Will Not 

Liquidity is not only rising — it is accelerating again. Money supply is trending higher. Policy rates have been cut. Reserve requirements have been reduced. Deficit spending has widened toward levels last seen during the pandemic. Yet GDP growth has slowed markedly: Q4 2025 expanded just ~3 percent year-on-year, bringing the full-year growth to ~4.4 percent, the slowest post-pandemic pace outside the crisis period. 

When liquidity expands as output contracts, the question is no longer about stimulus. It is about containment — and about who ultimately absorbs the risk.

Figure 1

In our previous post, we noted that the BSP’s currency issuance — or currency in circulation on the central bank’s books — surged by initially reported ~17.7 percent in December to a historic Php 3.205 trillion (Php 2.897 trillion revised).  (Figure 1, topmost and middle charts) 

In the same month, however, currency outside depository corporations — the stock of cash actually held by the public — grew only ~6.6 percent to Php 2.522 trillion. The gap between issuance (as captured in the Monetary Authorities Survey) and circulation outside banks (as captured in the Depository Corporations Survey) is the widest on record. 

This unprecedented growth differential signals a breakdown in monetary transmission. Liquidity is being created at the central bank level, yet it is not translating into proportional expansion of cash held by the public. Instead, it is accumulating within the banking and sovereign balance-sheet perimeter. 

IIB. Rising Monetary Aggregates, Mounting Systemic Leverage 

Despite the revision, broad money and financial system leverage metrics have pivoted higher. (Figure 1, lowest image) 

Monetary aggregates (M1 and M2) and domestic claims relative to GDP moved back up in Q4, reaching roughly 70.4 percent, 71.8 percent, and 80.6 percent, respectively — levels consistent with tighter financial balance-sheet conditions. 

Domestic claims, which include net claims on the central government (NCoCG) and claims on other sectors, broadly measure credit leverage within the financial system. 

In 2025, lending to the government accounted for ~27.2 percent of total claims (slightly higher than in 2024), while lending to the private sector was ~72.8 percent (slightly lower than in 2024), even as overall claims rose ~10 percent YoY and M1/M2/M3 expanded by 7.1 percent, 7.5 percent, and 7 percent YoY, respectively. 

IIC. Fiscal Backstopping at Pandemic Scale, Financial Market Signals: Liquidity Without Conviction 

Fiscal metrics underscore the scale of backstopping. As of end-November 2025, the national government’s budget deficit reached ~Php 1.26 trillion for the first eleven months — second only to the pandemic year 2020 on a cumulative basis, and representing ~81 percent of the government’s full-year Php 1.56 trillion target. Total revenues rose modestly, while expenditures continued to outpace them, driving the gap. 

Figure 2 

The impact of accelerating liquidity is increasingly visible in financial markets. 

The PSEi 30 has rallied alongside higher turnover despite slowing GDP, while the yield curve has steepened at the front even as long-end yields remain elevated — suggesting that liquidity is facilitating issuance absorption and duration risk transfer rather than signaling stronger real-economy prospects.  PSE & PSEi chart data based on original MAS data. (Figure 2, topmost and second to the highest windows) 

Philippine Treasury market turnover reached record levels in 2025. But volume alone is an incomplete signal of improved confidence. High turnover can reflect repositioning, dealer balance-sheet management, policy alignment, geopolitical shock absorption, or constrained domestic savings with limited real-economy outlets. (Figure 2, second to the lowest image) 

The curve matters more than the prints: its slope embeds term premium, duration appetite, and credibility. (Figure 2, lowest diagram) 

If confidence were broad-based and durable, normalization would occur across tenors. Instead, activity remains selective, slopes unstable, and duration demand cautious—liquidity without conviction. 

Across equities, fixed income, and foreign exchange, the pattern is consistent: liquidity is sustaining financial asset turnover while real-economy transmission weakens 

IID. Peso Dynamics: Stability Through Management; MAS vs. DCS: Divergence as Structural Signal 

The peso tells a similar story. Periodic strength has coincided with weak-dollar phases and sovereign borrowing inflows, yet the underlying savings–investment gap and elevated fiscal financing requirements continue to exert structural pressure. 

The Philippine government raised approximately USD 2.75 billion from global capital markets in January. 

Over the past weeks, USD/PHP has fallen from its record highs to test the 58 level. 

Exchange-rate stability appears less a reflection of external balance improvement than of active liquidity management and capital flow support. 

A key structural signal lies in the growing divergence between the BSP’s Monetary and Financial Statistics (MAS) and the Depository Corporations Survey (DCS). The MAS consolidates the central bank’s balance sheet plus the national government’s monetary accounts, including direct currency issuance and central bank operations. The DCS, by contrast, consolidates the balance sheets of the BSP and all other deposit-taking institutions (commercial banks, thrift banks, rural banks, etc.), presenting money supply and credit aggregates after eliminating intra-system holdings. This methodological difference means the MAS can register rapid currency issuance that does not immediately appear in the broader economy’s cash circulation as captured by the DCS — a gap that has rarely been this wide. 

This divergence — excess monetary creation not translating into commensurate growth in broad money or real economic activity — reflects a balance-sheet recession dynamic, where traditional monetary accommodation fails to circulate through productive economic channels. 

As banks and firms prioritize balance-sheet repair over fresh productive lending, excess liquidity remains trapped within the financial system. Consistent with Hyman Minsky’s financial instability hypothesis and Richard Koo’s balance-sheet recession framework, monetary accommodation increasingly sustains asset turnover and duration/risk transfer rather than output, employment, or external balance improvement. 

III. The Wile E. Coyote Phase: Optics in Motion 

December’s banking data do not depict stabilization. They depict redistribution. 

Slower lending growth emerged despite a string of interest rate cuts — a development even the mainstream press finally acknowledged. 

Universal and commercial bank lending (net of repos) rose 9.2% year-on-year in December — the softest expansion since February 2024’s 8.6%. 

The news pointed to a 5.4% contraction in lending to construction firms, attributing the slowdown to reduced public spending. But construction represents only 3.7% of total bank exposure. It cannot explain system-wide deceleration. 

The drivers were broader — and deeper. 

IIIA. Broad-Based Plateauing Across Core Sectors 

Three major sectors — accounting for roughly 42% of total bank portfolios — drove the slowdown. 

• Manufacturing (8.6% share) contracted 9.43% year-on-year in December, its seventh consecutive monthly decline and the second-deepest contraction since September 2025’s 10.44% drop. 
• Real estate (≈20% share) — the system’s largest borrower — slowed to 8.3% growth, its weakest pace since October 2023. 
• Consumer lending (13.5% share) — previously the fastest-growing segment — decelerated to 21.4%, the slowest since September 2022. This follows an extraordinary 33-month streak of growth exceeding 22%. 

This is not marginal noise.

Figure 3

Credit expansion appears to be plateauing across its core engines, as bank lending to both the production sector and households shows signs of inflection. (Figure 3, topmost pane) 

Meanwhile, GDP growth has slowed for two consecutive quarters — from 3.95% in Q3 to 3% in Q4. (Figure 3, middle image) 

Rate cuts were marketed as stimulus. Yet lending momentum peaked as output weakened. 

IIIB. Liquidity Redirected, Not Transmitted 

As lending to the general economy softened, activity within the financial system intensified.

Interbank lending and reverse repurchase transactions (with both the BSP and other banks) surged toward milestone highs. (Figure 3, lowest graph)

Figure 4

Bank borrowings from capital markets jumped 17.3% to an all-time high of Php 1.96 trillion, largely reflecting bond positioning. Bills payable also rose to one of the highest levels on record. (Figure 4, top and second to the highest images) 

Net claims on the central government increased 10.8% to a fresh record of Php 6.135 trillion. Duration exposure deepened. (Figure 4, second to the lowest diagram) 

Yet Held-to-Maturity (HTM) securities increased only modestly (+1.2% YoY), despite the BSP’s reclassification of these instruments under “debt securities net of amortization.” 

Risk did not disappear — it moved.

Despite liquidity injections, bank cash balances contracted 19.5% year-on-year in December.

Cash-to-deposit and liquid-asset-to-deposit ratios improved slightly but remain strategically low. (Figure 4, lowest visual) 

System liquidity appears abundant in headline aggregates. 

At the transactional margin, it is thin.

IIIC. The NPL Paradox

Figure 5 

Non-performing loans had been rising alongside slowing GDP through Q3. 

In November, they softened modestly. In December, they fell sharply. (Figure 5, topmost and middle graphs) 

Gross NPLs declined in peso terms — not merely as a ratio effect — even as output had weakened for two consecutive quarters. While year-end charge-offs, restructurings, and classification adjustments can produce seasonal improvements, the magnitude of the drop contrasts with deteriorating macro conditions. 

Either borrowers experienced an abrupt recovery amid a slowdown — or recognition dynamics shifted. 

There are only a handful of mechanical pathways through which NPL ratios decline in such an environment:

• Restructurings
• Charge-offs
• Denominator expansion
• Regulatory relief
• Classification effects 

The burden of proof shifts to fundamentals. 

IIID. Duration Losses Surface First 

While credit metrics improved optically, market losses intensified. 

In December, Available-for-Sale (AFS) securities expanded 22% and now account for roughly 45% of financial assets, rapidly approaching Held-to-Maturity’s 48% share. (Figure 5, lowest chart)

Figure 6

Despite generally easing Treasury yields, financial investment (accumulated) losses surged in December from Php 1.98 billion in November to Php 20.16 billion. (Figure 6, topmost pane) 

For Q4, losses on financial assets reached Php 42.396 billion — the third consecutive quarter exceeding Php 40 billion — levels previously seen only during the pandemic recession. (Figure 6, middle diagram) 

Full-year 2025 financial asset losses totaled Php 159.7 billion, materially weighing on profitability. Banking system net income growth slowed sharply: Q4 net income declined 0.78% year-on-year, while full-year 2025 profit growth decelerated to 3%, down from 9.8% in 2024. 

From Q3 to Q4, return on assets (ROA) decreased from 1.46% to 1.41%, and return on equity (ROE) declined from 11.71% to 11.46%, suggesting both measures may be beginning to trend downward. (Figure 6, lowest chart) 

The pressure came less from exploding credit costs than from market volatility. This is not synchronized improvement. It is stress migration.

IIIE. The Redistribution of Strain 

When securities losses rise, repo dependence increases, sovereign absorption intensifies, liquidity buffers remain fragile — yet NPL metrics improve abruptly — the pattern is not stabilization.

It is reallocation. 

Late-cycle systems often preserve surface calm by shifting where strain appears:

• Duration losses surface before credit losses.
• Market volatility compresses earnings before defaults spike.
• Provisioning pressure eases as classifications adjust.
• Headline ratios improve even as balance sheets stretch. 

This is the AFS Wile E. Coyote dynamic accelerating. The system appears suspended — supported by liquidity, refinancing structures, sovereign absorption, and accounting elasticity — even as underlying cash-flow conditions soften. 

Stability is maintained through motion, not repair.

IIIF. Reserve Cuts: Policy Choreography in Motion 

In February 2026, the BSP cut reserve requirements across bank-issued bonds, mortgage instruments, and trust accounts. Reserves on bonds fell from 3% to 2% for universal and commercial banks; thrift banks saw their 6% requirement scrapped; long-term negotiable deposits lost their 4% ratio; and most strikingly, trust and fiduciary accounts dropped to zero from double-digit levels. 

The BSP framed the move as liquidity-neutral, but the timing betrays intent: this was balance-sheet relief, not growth. Banks absorbing securities losses, repo dependence, and sovereign absorption were granted regulatory breathing room. 

This is choreography, not repair. Reserve cuts thin liquidity buffers to ease optics, shifting fragility from bank balance sheets into the broader system. Once again, containment through redistribution, not stabilization. 

IIIG. Late-Cycle Containment 

This pattern aligns with Minsky’s late-cycle stabilization phase: fragility becomes politically and financially intolerable, prompting increasingly active management of volatility and balance-sheet optics. Stability is no longer organic — it is administered. 

It also echoes Kindleberger’s late-cycle dynamics, where imbalances are contained and recognition deferred. Transparency thins. Risk redistributes. The system appears calm — until price signals overwhelm narrative control. 

It resembles Kornai’s soft-budget constraint dynamic: losses are socialized, recognition deferred, discipline diluted. 

The system is being managed. 

But when liquidity sustains refinancing more than output, when duration risk migrates faster than credit risk, and when monetary aggregates expand faster than money circulating in the real economy, the adjustment rarely announces itself through ratios.  

It accumulates quietly on balance sheets. Then it emerges through prices — often abruptly. 

And economics does not yield to optics.  

IIIH. Concentration, Price Discovery, and Balance-Sheet Feedback

Figure 7

The Philippine financial system is highly concentrated. Banks control roughly 83.1% of total financial assets, with universal and commercial banks accounting for about 77.4% (as of December 2025). (Figure 7, upper chart) 

At the same time, the PSEi 30 is itself concentrated in a handful of large-cap names. 

Since 2024, the top five heavyweights have accounted for over 50% of the index weight. This concentration has been led by ICTSI, which not only surpassed former leader SM Investments but, through a string of record highs, has pushed its weight in the PSEi 30 to over 18%— a single issue now accounts for nearly one-fifth of the headline index’s performance! (Figure 7, lower graph) 

In such an environment, late-session flows (“afternoon delight” or “pre-closing” activity) into a small number of index-heavy stocks can have disproportionate effects on headline market performance. Whether driven by liquidity management, portfolio rebalancing, balance-sheet considerations, or index performance objectives, this clustering of activity near the close raises questions about the quality and integrity of price discovery. 

This is not merely a capital markets issue. 

When asset prices become reference points for macro stability—and when large financial institutions sit at the center of both credit creation and market intermediation—price management, volatility smoothing, and liquidity containment can feed back into balance sheets. 

The result is a reflexive loop: 

• Market stabilization supports balance-sheet optics.
• Balance-sheet stability reinforces the narrative of macro resilience.

But when stabilization becomes a policy objective—whether in equity indices, exchange rates, or the yield curve—intertemporal trade-offs accumulate. 

Those trade-offs do not disappear. They re-emerge in funding structures, duration exposure, and income volatility—and ultimately in market volatility. 

IV. Conclusion Regime Recognition: Liquidity as Containment, Not Expansion 

What we are observing is not a conventional stimulus cycle. It is a containment cycle. 

• Liquidity is growing — but circulation is narrowing.
• Credit is refinancing — but not compounding productive output.
• Market turnover is rising — even as real growth decelerates. 

This is consistent with the balance-sheet recession dynamic outlined previously: private sector caution meets public sector duration absorption, while monetary aggregates expand within the institutional perimeter. 

In such a regime, risk does not disappear. It migrates. 

• Credit risk becomes duration risk.
• NPL ratios improve through denominator expansion.
• Volatility compresses through active management. 

But arithmetic remains.

When liquidity sustains rollover more than real investment, growth slows even as balance sheets expand. And when duration risk concentrates faster than income growth, the system becomes increasingly sensitive to price signals rather than flow indicators. 

The adjustment, when it comes, is rarely triggered by one dramatic data release. It emerges when price discovery outpaces narrative control. 

That is late-cycle dynamics. 

Policy stimulus eventually fails not because liquidity stops expanding — but because the real capital base can no longer validate the financial claims built upon it. 

Narratives may shape perception, but only economics compounds 

____

Reference: 

Prudent Investor Newsletter, Liquidity Without Output: The Balance-Sheet Recession Behind the Philippines’ Q4 and 2025 GDP Slowdown, Substack, February 08, 2026

 

 

 

Accommodation Is the Policy: Rising Philippine Bank Strains Under the BSP’s Easing Cycle

 

Truth has to be repeated constantly, because Error also is being preached all the time, and not just by a few, but by the multitude. In the Press and Encyclopaedias, in Schools and Universities, everywhere Error holds sway, feeling happy and comfortable in the knowledge of having Majority on its side― John Wolfgang Goethe

 

In this issue

Accommodation Is the Policy: Rising Philippine Bank Strains Under the BSP’s Easing Cycle

Section I — Universal-Commercial Bank Credit Is Stalling Despite BSP’s Aggressive Easing

Section II—Banks Are Reallocating, Liquidity Is Recycling, Not Financing Growth

Section III — BSP Is Accommodating Outcomes, Not Steering the Cycle

Conclusion: Accommodation as Policy, Crisis as Outcome 

Accommodation Is the Policy: Rising Philippine Bank Strains Under the BSP’s Easing Cycle 

Inflation optics, soft-peg constraints, and the mounting cost of balance-sheet preservation.

Section I — Universal-Commercial Bank Credit Is Stalling Despite BSP’s Aggressive Easing 

Interest rate cuts have become the by-phrase of the local financial community. 

Authorities continue to signal sustained monetary loosening as economic stimulus, while establishment economists and legacy media have rationalized financial easing—and the resulting rally in the PSEi 30—as a necessary catalyst for market recovery. Ironically, the same narrative also attributes the peso’s record weakness to this easing cycle. 

Either the mainstream genuinely believes that peso depreciation and economic recovery naturally go hand in hand, or market relationships are being selectively blurred or fudged to justify coordinated equity-market pumps.

Recent BSP releases—including the Universal and Commercial (UC) Bank’s November Loans Outstanding, the November Depository Corporations Survey, the November Philippine Bank’s Balance Sheet and Selected Performance Indicators, and the December central bank survey (MAS) indicators—tell a more troubling story beneath the liquidity narrative. 

Since late 2024, the BSP has pursued an extended easing cycle combining aggressive reserve-requirement reductions and repeated policy rate cuts, alongside financial backstops such as the doubling of deposit insurance coverage. 

Reserve requirements for UC banks were slashed from 9.5% to 7.0% in late 2024, and further to 5.0% by March 2025, amounting to a 450-basis-point liquidity release. Over the same period, successive rate cuts brought the policy rate down to 4.5% by December 2025. 

This accommodative stance unfolded against the backdrop of lingering pandemic-era fiscal deficits, whose credibility was further strained by the flood-control corruption controversy that erupted in Q3 2025. 

Yet despite persistent easing signals, private credit growth failed to re-accelerate. 

Figure 1

Universal bank lending peaked in January 2025 and slowed again by November, with both production loans and consumer credit losing momentum. (Figure 1, topmost window) 

UC banks reported a marked deceleration in November 2025, with total loan growth at around 10.7%, the slowest pace since late 2024. This was driven by weakening production loan growth (about 9.0%), while consumer credit, though still elevated in nominal terms, cooled to roughly 23%, its slowest expansion since late 2023. (Figure 1, middle image) 

This slowdown is striking given the macro backdrop: post-4% Q3 GDP growth, moderating inflation, and near-full employment—conditions that should, in theory, have reinforced credit demand. 

Instead, while lending momentum faded, monetary liquidity continued to expand. M1 growth (cash in circulation and transferable deposits) remained positive at just over 7% in November, extending its uptrend even as credit creation slowed. (Figure 1, lowest graph)

Figure 2

At the same time, deposit liabilities grew by only about 7.3%, continuing to underperform loan growth and reinforcing the underlying imbalance. (Figure 2, topmost visual) 

Taken together—slowing production and consumer loans, lagging deposit growth, and rising transactional liquidity—the evidence suggests that monetary easing is no longer transmitting into productive credit formation. 

Rather than catalyzing real investment, it appears to be inflating balance sheets and leverage, heightening systemic fragility without delivering commensurate real-economy gains. 

That is not all. 

Section II—Banks Are Reallocating, Liquidity Is Recycling, Not Financing Growth 

In the BSP’s December central bank survey, currency issuance not only surged to a record Php 3.2 trillion, but its year-on-year YoY growth accelerated to about 17–18%, surpassing the 2018 spike and ranking as the third-highest on record, behind only 2008 and 2020. (Figure 2 middle image) 

Notably, 2018 coincided with the BSP’s baptismal phase of its reserve-requirement (RRR) easing cycle, while 2008 (Great Financial Crisis) and 2020 (Pandemic recession) were both periods marked by domestic economic stress and volatility spikes of the USDPHP. 

History may not repeat—but does it rhyme? 

This liquidity surge, which should be further reflected in the December Depository Corporations Survey, likely contributed to the January-effect euphoria in the PSE, reinforcing asset (equity) price inflation even as credit growth slowed. 

Crucially, this marginal liquidity growth is not coming from private lending. 

Instead, net claims on the central government (NCoCG) held by banks surged to a record Php 5.89 trillion, up roughly 11% year-on-year, the fastest pace since mid-2024. 

At the same time, the BSP’s own NCoCG rebounded to around Php 760 billion—its highest nominal level since March 2025, largely due to a sharp decline in liabilities to the national government—despite falling nearly 20% YoY. (Figure 2, lowest chart) 

This decline most plausibly reflects a drawdown of government deposits at the BSP or reduced sterilization vis-à-vis the Treasury, mechanically releasing base money into the financial system. While debt repayment is a theoretical alternative, the persistence of record public debt levels as of November (Php 17.562 trillion) makes that explanation unlikely. 

Despite falling Treasury yields—which have reduced banks’ mark-to-market losses and should have eased balance-sheet pressures—banks continued to accumulate sovereign exposure.

Figure 3

Held-to-Maturity (HTM) securities climbed to a record Php 4.08 trillion in November, underscoring a significant reallocation into government paper. HTMs now account for roughly 70% of banks’ net claims on the central government. (Figure 3, topmost window) 

Banks have also escalated on investments. After a brief pullback in September from unprecedented highs, Available-for-Sale (AFS) securities rebounded by over 7% to Php 3.30 trillion, approaching HTM levels and reinforcing the portfolio shift away from private credit. (Figure 3, middle diagram) 

Yet despite record nominal credit, aggressive securities accumulation, and abundant liquidity, bank liquidity metrics continue to deteriorate. (Figure 3, lowest graph) 

• Liquid assets-to-deposits fell to about 47%, near pre-easing and pandemic-era lows, effectively erasing the BSP’s 2020-21 emergency liquidity buffers. 
• Cash-to-deposits dropped to roughly 9.7% in November, the second-lowest level on record.

Figure 4

While banks have reduced bills payable, bond payables continued to rise, lifting total borrowings to around Php 1.5 trillion, down from the Php 1.906 trillion March 2025 peak but still elevated. (Figure 4, topmost window) 

Liquidity management has increasingly shifted inward: interbank lending surged to a record Php 502 billion, alongside repo transactions exceeding Php 100 billion, signaling intensive liquidity recycling within the banking system. (Figure 4, middle image) 

Taken together, these figures point to a clear pattern. 

Banks are reallocating balance sheets toward sovereign absorption, liquidity management, and interbank cushioning—not expanding productive credit. The BSP, in turn, appears less to be steering outcomes than accommodating them, validating financial system preferences rather than redirecting capital toward growth. 

Section III — BSP Is Accommodating Outcomes, Not Steering the Cycle 

The BSP’s recent policy trajectory reveals a central bank anchored less to credit conditions or balance-sheet health than to inflation optics and system accommodation. 

Reserve-requirement cuts and successive policy-rate reductions have consistently followed periods of CPI deceleration, even amid deteriorating bank liquidity metrics, balance sheets increasingly tilted toward sovereign absorption, and liquidity being recycled within the financial system rather than funding productive expansion. (Figure 4, lowest chart) 

Monetary easing, in this context, has been CPI-conditioned rather than cycle-stabilizing. 

CPI, therefore, becomes highly politicized and susceptible to the policy agendas of political leadership. 

Why this persistence? 

While the BSP’s inflation-targeting framework does not explicitly target asset prices, it cannot ignore collateral values in a bank-dominated financial system. 

Falling collateral values threaten capital adequacy, impair credit transmission, and raise systemic stress. Policy calibration therefore prioritizes preventing balance-sheet rupture, even when that means sustaining distortions and postponing adjustment.

Figure 5

This implicit bias toward continuity has encouraged banks to manage imbalances rather than resolve them—through accounting optics, ratio management, and asset reclassification. 

Non-performing and related risks (e.g. loan loss provision) are contained not by deleveraging, but by supporting numerator growth (total loan portfolio—TLP—or bank credit growth) relative to denominators, a classic Wile E. Coyote velocity dynamic: balance sheets continue running forward, suspended by liquidity and policy accommodation, even as underlying fundamentals weaken. (Figure 5, top and middle panes) 

The same dynamic appears on the BSP’s external balance sheet. While net foreign assets (NFA) remain elevated, their support increasingly comes from valuation and financing effects rather than organic FX inflows. 

• Rising global gold prices mechanically lift reserve valuations without expanding usable foreign-exchange buffers. (Figure 5, lowest graph) 
• National government external borrowing routed through the BSP temporarily bolsters NFA, but these gains are liability-mirrored, not earned. 
• Bank borrowings similarly augment liquidity while obscuring underlying fragility.

Figure 6

More revealing than the level of NFA is its slowing rate of accumulation, which coincides with persistent USDPHP pressure. (Figure 6, topmost visual) 

This deceleration signals that the BSP’s capacity to manage the exchange rate is increasingly constrained by the very accommodations it sustains. 

Peso dynamics, therefore, are not incidental. Under the BSP’s soft-peg regime, exchange-rate management remains a direct but tacit policy objective, subordinated to liquidity preservation, fiscal dominance, and bailout imperatives. (Figure 6, lowest chart) 

Rather than defending a fixed level, the BSP has been compelled to tolerate managed depreciation, balancing currency weakness against the need to sustain domestic liquidity and support a political economy defined by a widening savings-investment gap. 

USDPHP hit a record 59.46 last week amid declining volume and suppressed volatility, highlighting trade constraints and the footprint of BSP intervention. 

This trade-off is most visible in energy and utility pricing—not through import dependence, but through bailout architecture. Producer subsidies, RPT reliefs, administered pricing, and government-nudged implicit M&A arrangements suppress inflation pass-through while deepening balance-sheet entanglement between the state, the financial system, and regulated corporates. 

CPI relief is achieved, but only by displacing risk elsewhere in the system. 

• In this sense, the regime exemplifies Goodhart’s Law: by targeting CPI, other signals—credit quality, liquidity resilience, capital discipline—are progressively distorted. 
• It also reflects a Heisenberg Uncertainty-style policy problem: intervention alters the system it seeks to stabilize, most visibly in leverage-dependent sectors and currency dynamics. 

Sustained FX intervention further amplifies this fragility, increasing the risk that adjustment, when it arrives, will be sharper and more volatile. 

Viewed together, the pattern is consistent. The BSP is not directing capital toward productive expansion nor pre-empting cyclical deterioration. It is validating outcomes shaped by asset inflation, fiscal dominance, bailout logic, and inflation optics, accommodating systemic constraints in ways that systematically favor incumbents. 

The public is offered stability in appearance, while adjustment is deferred—quietly, repeatedly, and at growing long-term cost. 

Conclusion: Accommodation as Policy, Crisis as Outcome 

The evidence presented does not describe policy error in the conventional sense. It reflects the unintended consequences of an institutional regime constraint operating within a political-economic framework that systematically privileges incumbent interests. 

The BSP and the bank-dominated financial system operate under conditions where inflation optics, fiscal dominance, bailout dependencies, and soft-peg maintenance sharply limit genuine counter-cyclical control. Within this structure, discretion is less about steering the cycle than accommodating existing balance-sheet vulnerabilities. 

What is sold as stimulus is largely balance-sheet preservation; what is promoted as stability is increasingly liquidity- and valuation-driven; and what appears as growth is often internal transactional recycling rather than productive expansion. 

In such a regime, monetary policy does not fail abruptly — it erodes gradually, until markets, balance sheets, or external constraints force destabilizing adjustments. 

The risk is not that the peso weakens, or that interest rates are “too low,” but that accumulated distortions increase the likelihood that eventual correction becomes more volatile, less controllable, and more socially costly. 

This is not an argument about intent or competence. It is an argument about incentives, institutional constraints, and the limits of accommodation once gravity reasserts itself. 

Where political-ideological rigidity suppresses reform, crisis ceases to be an accident and becomes the logical endgame.

 

The BSP’s Seventh Rate Cut, the Goldilocks Delusion, and Technocracy in Crisis

 

Economic interventionism is a self-defeating policy. The individual measures that it applies do not achieve the results sought. They bring about a state of affairs, which—from the viewpoint of its advocates themselves—is much more undesirable than the previous state they intended to alter—Ludwig von Mises 

In this issue

The BSP’s Seventh Rate Cut, the Goldilocks Delusion, and Technocracy in Crisis

I. The Goldilocks Delusion: Rate Cuts as Ritual

II. Cui Bono: Government as the Primary Beneficiary

III. Wile E. Coyote Finance: The Race Between Bank Credit Expansion and the NPL Surge

IV. Minsky’s Warning: Fragility Beneath the Easing

V. Concentration and Contagion, The Exclusion of Inclusion: MSMEs and the Elite Credit Divide

VI. A Demand-Driven CPI? BSP’s Quiet Admission: Demand Weakness Behind Low Inflation

VII. Employment at the Edge of Fiction: Volatility, Illusion, and Structural Decay

VIII. The War on Cash and the Politics of Liquidity

IX. The War on Cash Disguised as Corruption Control

X. From Cash Limits to Systemic Liquidity Locks

XI. The Liquidity Containment Playbook and the Architecture of Control

XII. Curve-Shaping and Fiscal Extraction

XIII. When Discretion Becomes Doctrine: From Institutional Venality to Kindleberger’s Signpost

XIV. Conclusion: The Technocrat’s Mirage: Goldilocks Confronts the Knowledge Problem and Goodhart’s Law 

The BSP’s Seventh Rate Cut, the Goldilocks Delusion, and Technocracy in Crisis 

From rate cuts to cash caps: how the BSP’s containment playbook reshapes power and fragility in the Philippine economy

I. The Goldilocks Delusion: Rate Cuts as Ritual 

In delivering its “surprise” seventh rate cut for this August 2024 episode of its easing cycle, the BSP chief justified their decision on four grounds: 

• 1 Outlook for growth has softened in the near term
• 2 Growth was weaker because demand is weaker. This, in turn, is why inflation is low
• 3 Governance concerns on public infrastructure spending have weighed on business sentiment
• 4 “We’re still refining our estimates. We had thought that our Goldilocks policy rate was closer to 5 percent, now it’s closer to 4 percent. So we have to decide where we really are between 5 percent and 4 percent.” 

For a supposedly data-dependent political-monetary institution, the BSP never seems to ask whether rate cuts have delivered the intended results—or why they haven’t. The rate-cut logic rests on a single pillar: the belief that spending alone drives growth. 

In reality, the BSP’s spree of rate and reserve cuts, signaling channels, and relief measures has produced a weaker, more fragile economy.

Figure 1

GDP rates have been declining since at least 2012, alongside the BSP’s ON RRP rates. Yet none of this is explained by media or institutional experts. These ‘signal channeling’ tactics are designed for the public to unquestioningly accept official explanations. (Figure 1, upper chart) 

II. Cui Bono: Government as the Primary Beneficiary 

Second, cui bono—who benefits most from rate cuts? 

The biggest borrower is the government. Its historic deficit spending spree hit an all-time high in 1H 2025, reaching a direct 16.71% share of GDP. This is supported by the second-highest debt level in history—ballooning to Php 17.468 trillion in August 2025—and with it, surging debt servicing costs. (Figure 1, lower window) 

As explained in our early October post: 

• More debt → more servicing → less for everything else
• Crowding out hits both public and private spending
• Revenue gains won’t keep up with servicing
• Inflation and peso depreciation risks climb
• Higher taxes are on the horizon 

The likely effect of headline “governance concerns” and BSP’s liquidity containment measures—via capital and regulatory controls—is a material slowdown in government spending. In an economy increasingly dependent on deficit outlays, this amplifies what the BSP chief calls a “demand slowdown.” 

In truth, the causality runs backward: public spending crowding out and malinvestments cause weak demand. 

III. Wile E. Coyote Finance: The Race Between Bank Credit Expansion and the NPL Surge 

Banks are the second biggest beneficiaries. Yet paradoxically, despite the BSP’s easing cycle, the growth rate of bank lending appears to have hit a wall.

Figure 2

Gross Non-Performing Loans (NPL) surged to a record Php 550 billion up from 5.4% in July to 7.3% in August. (Figure 2, topmost image)

Because lending growth materially slowed from 11% to 9.9% over the same period, the gross NPL ratio rose from 3.4% to 3.5%—the highest since November 2024. This is the Wile E. Coyote moment: credit velocity stalls and NPL gravity takes hold. 

As we noted in September: 

“Needless to say, whether in response to BSP policy or escalating balance sheet stress, banks may begin pulling back on credit—unveiling the Wile E. Coyote moment, where velocity stalls and gravity takes hold.” 

Even BSP’s own data confirms that the past rate cuts have barely permeated average bank lending rates. As of July 2025, these stood at 8.17%—still comparable to levels when BSP rates were at their peak (8.23% in August 2024). The blunting of policy transmission reveals deep internal imbalances. (Figure 2, middle graph) 

Production loans (9.8%) signaled the slowdown in lending, while consumer loans (23.4%) continued to sizzle in August. The share of consumer loans reached a historic 15.5% (excluding real estate loans). (Figure 2, lowest visual) 

IV. Minsky’s Warning: Fragility Beneath the Easing 

The BSP’s admission that the economy has softened translates to likely more NPLs and an accelerating cycle of loan refinancing. Whether on the consumer or supply side, this incentivizes rate cuts to delay a reckoning 

From Hyman Minsky’s Financial Instability Hypothesis, this deepens the drift toward Ponzi finance: insufficient cash flows from operations prompt recycling of loans and asset sales to fund mounting liabilities. (see Reference)

Figure 3

As major borrowers, lower rates also benefit banks’ own borrowing sprees. While banks trimmed their August bond and bill issuances (-0.79% YoY, -3.7% MoM, share down from 6.52% to 6.3%), both growth rates and shares remain on an uptrend. (Figure 3, topmost graph) 

The slowdown in bank borrowing stems from drawdowns from BSP accounts—justified by recent reserve rate ratio (RRR) cuts. BSP’s MAS reported a Php 242 billion bounce in liabilities to Other Depository Corporations (ODC) in August, reaching Php 898.99 billion. (Figure 3, middle diagram) 

Ultimately, the seventh rate cut—deepening the easing cycle—is designed to keep credit velocity ahead of the NPL surge, hoping to stall the reckoning or spark productivity-led credit expansion. Growth theater masks the real dynamics. 

Rate cuts today are less about the economy and more about survival management within the financial system. 

V. Concentration and Contagion, The Exclusion of Inclusion: MSMEs and the Elite Credit Divide 

MSME lending—the most vital segment—continues to wane. Its share of total bank lending fell to a paltry 4.6% in Q2, the lowest since 2009. Ironically, MSME lending even requires a mandate. BSP easing has little impact here. (Figure 3, lowest visual) 

Some borrowers engage in wholesale lending or microfinancing—borrowing from banks to relend to SMEs. But if average bank lending rates haven’t come down, why would this segment benefit? 

Informal lenders, who fill the gap left by banks, absorb this risk—keeping rates sticky, as in the case of 5-6 lending. 

If lending to MSMEs remains negligible, who are the real beneficiaries of bank credit?

The answer: elite-owned, politically connected conglomerates.

Figure 4

In 1H 2025, borrowings of the 26 non-financial PSEi members reached a record Php 5.95 trillion—up Php 423.2 billion YoY, or 7.7%. That’s about 16.92% of total financial resources (TFR) as of June 2025. Bills Payable of the PSEi 30’s 4 banks jumped 64.55% YoY to P 859.7 billion. (Figure 4, topmost graph) 

This concentration is reflected in total financial resources/assets: Philippine banks, especially universal-commercial banks, hold 82.7% and 77.1% of total assets respectively as of July. 

Mounting systemic fragility is being masked by deepening concentration. A credit blowup in one major sector or ‘too big to fail’ player could ripple through the financial system, capital markets, interest rate channel, the USD–PHP exchange rate—and ultimately, GDP. 

The structure of privilege and fragility is now one and the same.

VI. A Demand-Driven CPI? BSP’s Quiet Admission: Demand Weakness Behind Low Inflation 

The BSP chief even admitted "demand is weaker. This, in turn, is why inflation is low."

Contrastingly, when authorities present their CPI data, the penchant is to frame inflation as a supply-side dynamic. Yet in our humble opinion, this marks the first time that the BSP confesses to a demand-driven CPI. 

September CPI rose for the second consecutive month—from 1.5% to 1.7%. If the ‘governance issues’ have exacerbated the demand slowdown, why has CPI risen? Authorities pointed to higher transport and vegetable prices as the culprit. 

Yet core CPI slowed from 2.7% in August to 2.6% in September, suggesting that the lagged effects of earlier easy money have translated to its recent rise. 

But that may be about to change. 

The drop in core CPI to 2.6% YoY was underscored by its month-on-month (MoM) movement, as well as the headline CPI’s MoM, both of which were flat in September. Historically, a plunge in MoM tends to signal interim peaks in CPI. (Figure 4, middle and lowest diagrams) 

So, while the unfolding data suggest that public spending may slow and bank lending continues to decelerate, “demand is weaker” would likely mean not only a softer GDP print but an interim “top” in CPI. 

If inflation reflects weak demand, labor data should show the same — yet the opposite is being claimed 

VII. Employment at the Edge of Fiction: Volatility, Illusion, and Structural Decay 

Authorities also produced another remarkable claim—on jobs.

Figure 5

They say employment rates significantly rebounded from 94.67% in July to 96.1% in August, even as the August–September CPI rebound supposedly showed that “demand is weaker.” This rebound was supported by a sudden surge in labor force participation—from 60.7% in July to 65.06% in August. (Figure 5, topmost and middle charts) 

The PSA’s employment data defies structural logic. Labor swings like stocks despite rigid labor laws and weak job mobility. The data also suggest that the wide vacillation in jobs indicates abrupt shifts between searching for work and refraining from doing so—as reflected in the steep changes in labor force participation. 

Furthermore, construction jobs flourished in August even amid flood-control probes, reflecting either delayed fiscal drag—or inflated data, to project immunity of labor markets from governance scandals. (Figure 5, lowest graph) 

Yet high employment masks poor-quality, low-literacy work—mostly in MSMEs—which explains elevated self-rated poverty and hunger rates. 

Additionally, both employment and labor force data have turned ominous: a rounding top in employment rates, while labor force participation also trends downward. 

Despite tariff woes, the slowdown in manufacturing jobs remains moderate. 

Nonetheless, beneath this façade, record consumer credit and stagnant wages reveal a highly leveraged, increasingly credit-dependent household sector. 

Labor narrative inflation—the embellishment of job metrics—would only exacerbate depressed conditions during the next downturn, leading to sharper unemployment. 

When investors interpret inaccurate data as fact, they allocate resources erroneously. The resulting imbalances won’t just show up in earnings losses—they’ll manifest as outright capital consumption. 

And while public spending may be disrupted, authorities can always divert “budget” caught in controversies to other areas. 

That said, jobs decay could rupture the banks propping up this high-employment illusion. 

VIII. The War on Cash and the Politics of Liquidity 

This week puts into the spotlight two developments which are likely inimical to the banking system, the economy and civil liberties. 

This Philstar article points to the banking system’s implementation of the BSP’s Php 500,000 withdrawal cap, which took effect in October. 

We earlier flagged seven potential risks from the BSP’s withdrawal limit: financial gridlock that inhibits the economy; capital controls that permeate into trade; indirect rescue of the banking system at the expense of the economy; possible confidence erosion in banks—alongside CMEPA; tighter credit conditions; rising risk premiums and capital flight; and, finally, the warning of historical precedent. (see reference) 

For instance, we wrote, "these sweeping limits target an errant minority while penalizing the wider economy. Payroll financing for firms with dozens of employees, capital expenditures, and cash-intensive investments and many more aspects of commerce all depend on such flows." 

The Philstar article noted, "Several social media users, particularly small business owners, expressed frustration over the stricter requirements and said that the P500,000 daily cash limit could disrupt operations and delay payments to suppliers."

Sentiment is yet to diffuse into economic numbers, but our underlying methodological individualist deductive reasoning is on the right track. 

IX. The War on Cash Disguised as Corruption Control

One of the critical elements in the BSP withdrawal cap is its requirement that the public use ‘traceable channels.’

The “traceable channels” clause reveals the BSP’s dual intent. 

On media, it’s about anti–money laundering and transaction transparency. In practice, it forces liquidity to remain inside the banking perimeter—deposits, e-wallets, and interbank transfers that cannot exit as cash. 

Cash, the last bastion of transactional privacy and immediacy, is being sidelined. This is not a war on crime; it’s a war on cash. 

The effect is to silo money within the formal system, preventing it from circulating freely across the real economy.

Figure 6

In August, cash-to-deposit at 9.84% remained adrift near all-time lows, while the liquid-asset-to-deposit ratio at 47.72% hit 2020 pandemic lows—both trending downward since 2013. (Figure 6, topmost pane) 

X. From Cash Limits to Systemic Liquidity Locks 

What looks like a compliance reform is, in truth, a liquidity containment measure. 

By capping withdrawals at Php 500,000, the BSP traps liquidity in banks already facing balance sheet strain. This buys temporary stability, allowing institutions to meet reserve ratios and avoid visible stress, but it starves the cash economy—especially small businesses dependent on operational liquidity. 

Economic losses eventually translate to non-performing loans, erasing whatever short-term relief liquidity traps provided. When firms struggle to repay, banks hoard liquidity to protect themselves—contracting credit and deepening the slowdown. The policy cure becomes the crisis catalyst. 

XI. The Liquidity Containment Playbook and the Architecture of Control 

This is not an isolated act; it fits a broader policy playbook: 

• Easy Money Policies: Reduce the cost of borrowing in favor of the largest borrowers, often at the expense of savers and small lenders. 
• CMEPA: The Capital Market Efficiency Promotion Act, which expands regulatory reach over capital flows and market behavior, while rechanneling private savings toward state and quasi-state instruments. 
• Soft FX Peg: The USDPHP peg, designed to constrain inflation, masks currency fragility and limits monetary flexibility. 
• Price Controls: MSRP ceilings distort price signals and suppress market clearing, especially in essential goods. 
• Administrative Friction: Regulatory hurdles replace fiscal support, extracting compliance and liquidity rather than injecting relief. 

Add to that the BSP’s ongoing yield curve-shaping—suppressing long-term yields to sustain public debt rollover—and what emerges is a clear strategy of financial containment: liquidity is captured, redirected, and immobilized to defend a strained financial order. 

XII. Curve-Shaping and Fiscal Extraction 

The post–rate cut yield curve behavior in the Philippines reveals a dual narrative that’s more tactical than organic. On one hand, the market is signaling unease about inflation—particularly in the medium term—yet it stops short of pricing in a runaway scenario. This ambivalence is reflected in the belly of the curve, where yields have dropped sharply despite flat month-on-month CPI and only modest year-on-year upticks. (Figure 6, middle and lowest graphs) 

On the other hand, the BSP appears to be engineering a ‘bearish steepening’ through tactical easing, likely aimed at supporting bank margins and stimulating credit amid a backdrop of rising NPLs, slowing loan growth, and liquidity hoarding. 

The rate cut, coming on the heels of July’s CMEPA and amid regulatory tightening, suggests a deliberate attempt to offset balance sheet stress without triggering overt inflation panic. 

Each of these measures—cash caps, regulatory absorption of savings, and engineered curve shifts—forms part of a single containment architecture. What looks like fragmented policy is, in reality, coordinated liquidity triage. 

In sum, fiscal extraction, liquidity controls, and curve manipulation are now moving in tandem. Each reinforces the other, ensuring that capital cannot easily escape the system even as trust erodes. 

The war on cash, then, is not about corruption or transparency—it’s about preserving liquidity in a system that has begun to run dry.

XIII. When Discretion Becomes Doctrine: From Institutional Venality to Kindleberger’s Signpost 

And then the BSP hopes to expand its extraction-based “reform.” This ABS-CBN article reports that the central bank plans to issue "a new policy on a possible threshold for money transfers which will cover even digital transactions." It would also empower banks to "refuse any transaction based on suspicion of corruption." 

Ironically, BSP Governor Eli Remolona cited as an example a contractor’s ‘huge’ withdrawal from the National Treasury—deposited into a private account—which he defended as "legitimate." 

The war on financials is evolving—from capital controls to behavioral nudging to arbitrary discretionary thresholds. BSP’s move to cap money transfers reframes liquidity as suspicion, and banks as moral adjudicators. 

Discretion to refuse transactions—even without proof—creates a regime where access to private property is conditional, not on law, but on institutional discomfort. 

Remolona’s defense of a bank that released a “huge amount” to a contractor despite unease confirms what we’ve recently argued: the scandal was never hidden—it was institutionally tolerated. 

Bullseye! 

Two revelations from this: 

First, it validates that this venal political-economic framework represents the tip of the iceberg—supported by deeply entrenched gaming of the system, extraction, and control born of top-heavy policies and politics. 

Two. It serves as a Kindleberger’s timeless signpost—that swindles, fraud, and defalcation are often signals of crashes and panic: 

"The propensities to swindle and be swindled run parallel to the propensity to speculate during a boom. Crash and panic, with their motto of sauve qui peut, induce still more to cheat in order to save themselves. And the signal for panic is often the revelation of some swindle, theft, embezzlement, or fraud." (Kindleberger, Bernstein)

In this sense, the BSP’s moralistic posture and arbitrary discretion may not be acts of reform, but symptoms of a system inching toward its own reckoning. The façade of prudence conceals a liquidity-starved order struggling to maintain legitimacy—where control replaces confidence, and “reform” becomes a euphemism for survival. 

All this suggests that, should implementation be rigorous, the recent earthquakes may not be confined geologically but could spill over into financial institutions and the broader economy. If these signify a “do something” parade of ningas cogon policies, then the moral decay born of the public spending spree will soon resurface. 

Either way, because of structural sunk costs, the effects of one intervention diffusing into the next guarantees the acceleration and eventual implosion of imbalances that—like a pressure valve—will find a way to ventilate. 

XIV. Conclusion: The Technocrat’s Mirage: Goldilocks Confronts the Knowledge Problem and Goodhart’s Law 

Finally, the BSP admits to either being afflicted by a knowledge problem or propagating a red herring: "We’re still refining our estimates. We had thought that our Goldilocks policy rate was closer to 5 percent, now it’s closer to 4 percent. So we have to decide where we really are between 5 percent and 4 percent." 

This confession exposes the technocratic folly of believing that economic equilibrium can be engineered by formula. It ignores the fundamental truth of human action—there are no constants—and the perennial lesson of Goodhart’s Law: when a measure becomes a target, it ceases to be a good measure. Protecting the status quo, therefore, translates to chasing short-term fixes while evading long-term consequences. 

What this reveals is not calibration but confusion—policy reduced to trial-and-error within a liquidity-starved system. The “Goldilocks” rhetoric masks a deeper instability: that each attempt to fine-tune the economy only amplifies the distortions born of past interventions. 

We close this article with a quote from our October issue: 

"The irony is stark. What can rate cuts achieve in “spurring demand” when the BSP is simultaneously probing banks and imposing withdrawal caps? 

And more: what can they do when authorities themselves admit that CMEPA triggered a “dramatic” 95-percent drop in long-term deposits, or when households are hoarding liquidity in response to new tax rules—feeding banks’ liquidity trap?" 

____

References 

Ludwig von Mises, Bureaucracy, p.119 NEW HAVEN YALE UNIVERSITY PRESS 1944, mises.org 

Hyman P. Minsky, The Financial Instability Hypothesis The Jerome Levy Economics Institute of Bard College, May 1992 

Charles P Kindleberger & Peter L. Bernstein, The Emergence of Swindles, Manias Panics and Crashes, Chapter 5, p.73 Springer Nature link, January 2015 

Prudent Investor Newsletter, The Philippine Flood Control Scandal: Systemic Failure and Central Bank Complicity, Substack, October 5, 2025 

Prudent Investor Newsletter, Q2–1H Debt-Fueled PSEi 30 Performance Disconnects from GDP—What Could Go Wrong, Substack, August 24, 2025 

Prudent Investor Newsletter, Minsky's Fragility Cycle Meets Wile E. Coyote: The Philippine Banking System’s Velocity Trap, Substack, September 14, 2025