At the launch of “Risk and Resilience in the Philippine Financial System: How Much Has Changed?” the Bangko Sentral ng Pilipinas’ latest publication edited by Ramon Moreno and Veronica Bayangos, BSP Governor Eli Remolona Jr. opened with a line from Nobel laureate Robert Shiller: “Narratives shape economic outcomes.”
It is a good line, and an easy one to quote. But having read the book’s seven chapters, spanning five decades and a dozen-plus BSP economists, I think that line describes the surface, not the mechanism. Every crisis in this book ends the same way: the cost of losing confidence turns out to be a multiple, sometimes a hundredfold multiple, of whatever triggered the panic in the first place. That is the book’s real argument, and it has nothing to do with storytelling. It is about what gets stockpiled, in capital, liquidity and credibility, before anyone needs it, versus what gets improvised after.
My overall assessment is that the book is strongest exactly where it proves this point with numbers rather than sentiment. Each crisis it documents, 1981, 1983, 1997, 2008 and 2020, involved competent people and functioning institutions, with obvious warning signs in hindsight. What separated the episodes that stayed contained from the ones that spiraled was not intelligence but discipline: whether capital, liquidity and credibility had been stockpiled before the test arrived, or were being improvised while it was already underway.
The clearest illustration of that multiple is buried in the chapter on the 1981 flight of businessman Dewey Dee, co-authored by Johnny Noe Ravalo. Dee defaulted on roughly P650 million. Stabilizing the market afterward cost an estimated P77 billion. That is not a story about one man’s fraud. It is a receipt for what happens when confidence collapses faster than institutions can respond.
The chapter on the 1980s debt crisis, which Remolona co-wrote with Justin Fernandez, shows the same mechanism at a national scale: 1970s optimism hardened into a belief, voiced by Citibank chairman Walter Wriston, that “countries don’t go bankrupt.” That belief collapsed with the peso in 1983, and the country spent what the chapter calls La Decada Perdida, the lost decade, paying down the bill.
The book becomes genuinely persuasive when it flips the lens and shows the opposite outcome: what buffers actually buy you. The Philippines avoided the worst of the 1997 Asian Financial Crisis through prudential restrictions already in place, not through size or strength. It dodged a recession during the 2008 Global Financial Crisis that struck wealthier economies harder, thanks to reforms accumulated the prior decade. And when COVID-19 hit in 2020, defying the usual assumption that pandemics are levelers, banks held up because balance sheets had been strengthened years earlier, when no pandemic was in sight.
Three separate chapters, one consistent finding: resilience is purchased in advance, never improvised under pressure.
The book’s most candid chapter, on isolated bank failures such as Urban Bank, Equitable PCI, the Legacy Group and Aman Futures, is the one that speaks explicitly in the language of reputation, and it makes the cost argument again, in miniature. It names governance failure as a driver of what it calls “reputational damage,” and identifies the common thread across these episodes as widespread euphoria, a mindset that ignored warning signs in pursuit of high returns. Every one of those cases was cheaper to prevent than to clean up.
That is the observation worth carrying into any boardroom, regardless of industry. Every organization lives by the stories it tells itself, and some of those stories create genuine blind spots, leaders convincing themselves the company has weathered worse storms before, that customers will remain loyal, or that a reputational issue will simply fade with time.
But the real exposure is not the story. It is what has, or has not, been banked while the story still felt true.
One line from Remolona’s launch speech says this more precisely than the rest of the book combined: buffers must be built before a crisis, not during one; capital must be strong before losses emerge; supervision must be credible before confidence is tested. Trust follows the identical rule. It cannot be accumulated in the middle of a controversy, or improvised once stakeholders start asking difficult questions. Organizations must invest continuously in the reserves of trust, credibility and legitimacy the way banks invest in capital. These reserves never appear on a balance sheet, but as that P77-billion cleanup bill shows, they are the single most expensive thing to rebuild once they are gone.
This is why I have long argued that reputation is not a communications function but an enterprise asset, funded and governed the same way a bank funds and governs its capital position, well before a crisis arrives to test it.
If the book has a limitation, it is that the narrative-economics framing Remolona used at the launch is thinner on the page than the buffers argument the chapters actually build, case by case, decade by decade. A reader expecting a unified theory of storytelling will instead find something more useful: a ledger. Five decades of evidence on what preparedness costs against what its absence costs, with the arithmetic never in preparedness’ disfavor.
That ledger is, in the end, a case for institutional memory.
Every crisis documented here became an opportunity to rebuild resilience at a fraction of what the original panic cost. Institutions that forget that arithmetic are condemned to relearn it the expensive way, and the same is true of reputation. Every controversy should leave behind stronger governance, not just a repaired press cycle, or the bill eventually comes due on a story left unquestioned for too long.
Dr. Ron Jabal, APR, is the CEO of PAGEONE Group (www.pageonegroup.ph) (www.pageonegroup.ph) and the founder and president of the Reputation Management Association of the Philippines (www.rmap.org.ph). Please correspond to ron.jabal@pageone.ph or rfjabal@gmail.com