By Ma. Stella F. Arnaldo / Special to the BusinessMirror
NESTOR A. Espenilla Jr. formally took over the reins of the Bangko Sentral ng Pilipinas (BSP) as governor on Monday, and pushed for the further liberalization of the banking sector, more financial inclusion, and a legislative agenda that would strengthen the institution and its protection of the financial system.
He also warned on “sources of vulnerabilities” that may erode the country’s economic gains, at the turnover ceremony at the BSP General Assembly Hall, which was packed to the rafters with employees eager to hear from their new boss. He takes over from career central banker Amando M. Tetangco Jr., who has been with the institution for 43 years and was its governor since 2005.
The day was also a celebration for the monetary institution, whose anniversary falls on July 3, after its establishment 24 years ago under the New Central Bank Act of 1993.
Prior to the turnover ceremony at the BSP, Finance Secretary Carlos G. Dominguez III, representing President Duterte, administered the oath of office to Espenilla.
Dominguez also swore into office Monetary Board members: former banker and Trade Secretary Peter B. Favila; former Socioeconomic Planning Secretary Felipe Medalla; and former banker Antonio Abacan Jr. Favila served as national government representative to the Monetary Board in 2008 and became a full-time Monetary Board member from 2010 to 2014. Medalla, was reappointed to a second term at the Monetary Board.
During his speech, Espenilla said his priorities include “an even more market-oriented” monetary policy, liberalization of the banking sector to open it up to further competition and promote efficiency among institutions, and pushing for legislation to “amend the BSP Charter, the passage of the Payment System Act and the Islamic Banking Act, and the easing of the deposit secrecy laws. We also join the initiative for the further strengthening of the Anti-Money Laundering Act to win the fight against money laundering and terrorist financing and thus secure the integrity of our financial system”.
Also, he would further push the BSP’s financial inclusion advocacy, to enable more people to benefit from the economic growth, with the creation of more jobs. “We need to work on bringing central banking operations closer to the people. This would entail strengthening our commitment to advance our financial inclusion, financial education and consumer protection agenda to ensure that no one is left behind,” stressed Espenilla, who also chairs the policy-making Monetary Board.
While acknowledging the low-inflation, high-growth environment fostered by the deft handling of monetary policy, the BSP governor warned of uncertainties in global economic policy that could undermine the country’s growth prospects.
“We have to be prepared, as well, for the seemingly imminent wind-down of ultra-easy monetary policies in advanced economies. We need to be mindful of such events and their potentially far-reaching consequences since these could undermine our economic performance and disrupt our carefully laid plans,” he said.
He, likewise, mentioned innovations in technology and communication that could disrupt the financial system. “Digital innovation is rapidly reshaping financial services as we know it to serve a new breed of financial consumers who are young, upwardly mobile, technology-savvy and have exacting demands for the convenient delivery of financial products and services.
“The role of social media, particularly as an information channel, has likewise accelerated, highlighting the speed at which information, both good and bad news, and perhaps even fake news, can spread at an unprecedented speed. We cannot also be blind to the dark specter of cybercrime that can quickly undermine trust in our financial system. There is no substitute for eternal vigilance, proactive action and public education. We are all in this together,” he told BSP employees.
Espenilla has been with the BSP since 1981 and has worked in Economic Research, International Operations and in the Office of the Governor. He was seconded to the International Monetary Fund from 1990 to 1992.
He earned a bachelor of science degree in business economics and a master’s degree in business administration from the University of the Philippines, as well as a masters of science degree in policy science from the Graduate Institute of Policy Science in Tokyo, Japan.