THE BANGKO Sentral ng Pilipinas (BSP) is targeting to launch a news sentiment index (NSI) by 2023, as it seeks to ramp up the use of big data in its monitoring activities.
BSP Governor Benjamin E. Diokno on Thursday said the NSI would “capture relevant views or sentiment on key macroeconomic events that may affect the current and emerging economic and financial environment.”
“The NSI will leverage on big data, machine learning and artificial intelligence to enhance the BSP’s monitoring activities for policy development and macro-financial surveillance,” he said.
The NSI project involves the development of software that will instantly gather information on consumer and business sentiment from online news sources.
The information will then be processed using algorithms to derive the general sentiment on the economic and financial fronts. This sentiment can either be positive, neutral or negative.
“As news covers a wide range of subjects, we further take advantage of the rich information available in the news data by categorizing news articles by topic. Through topic modeling techniques, we will be able to extract sentiment data on key themes relevant to our policy decisions,” Mr. Diokno said.
The BSP said the NSI would be a “cost-effective and efficient data-gathering solution” for monitoring economic developments.
“The sentiment index that we are developing is based on most recognized and reputable media outlets in the Philippines only. We define recognized and reputable media outlets as those that have garnered awards or citations and are recognized by other members of the press or organizations,” Mr. Diokno said.
To ensure that the index accurately captures the overall economic sentiment, only news from financial and business sections of media outlets will be included, the BSP chief said.
“The BSP ensures it only uses truthful and fact-checked data in its decisions and policies,” Mr. Diokno said.
The NSI will complement the respondent-based sentiment surveys, such as the business and consumer expectations surveys that the BSP releases every quarter.
The NSI is part of the central bank’s big data roadmap initiative. — Keisha B. Ta-asan