UNDER Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr., the house was kept in good order.
At his helm, the country weathered the global financial crisis of 2007-2008, which had an even larger and more alarming scope and scale than that of the Asian financial crisis that kept us economically edgy from 1997 to 1998. It inflicted a heavy toll not only on the advanced economies of the world, but also on both local and global emerging markets.
Tetangco targeted inflation, making sure that it was within the preferred range. He allowed the market to determine the exchange rate, but remained ever mindful of its inflationary effect.
The BSP chief has been with the office for 43 years, 12 years of which he spent as its captain, navigating the country to monetary solidity. He is the only BSP governor to be reappointed to a second term. Appointed to the post by former President Gloria Macapagal-Arroyo in 2005, his term was extended in 2011 by President Benigno S. Aquino III.
The New York-based Global Finance magazine named him as one of the world’s top central bankers. He has also been acknowledged both here and abroad as one of the world’s best central bankers for nursing the country’s fiscal monetary position to stability and growth.
In him we saw how the BSP tried its best to keep its independence from internal pressures and external shocks, ensuring that the Philippine fiscal and economic health remains buoyant. Tetangco, in previous interviews, has been quoted as saying: “What allowed the Philippines to continue to be resilient, despite the surprises of 2016? Well, we did our homework and kept our house in order.”
Now at 64, he’s finally stepping down on July 2 of this year, with President Duterte still mulling over his replacement.
Along with many from the country’s financial circle, I, too, would rather have him stay, but respect Tetangco’s decision to decline another term. The President was inclined to appoint him to an unparalleled third term, but such would require Congress to amend the BSP’s charter.
The BSP chief is batting for seamless transition, and says his replacement should come from the ranks and be tough enough to keep the independence of the central bank.
“If you want a seamless transition in the BSP, the next governor should be one with central banking experience; an insider. If you look at those competencies, an underlying factor there would be familiarity with the mandate and how to deliver on it, as well as [an understanding of] the culture of the organization,” he says. Tetangco himself came from the ranks. His BSP leadership has been characterized as conventional, sensible, results-oriented and reassuring.
There are some names that have been floated to take his place: BSP insiders Nestor A. Espenilla and Diwa C. Guinigundo, among them.
Others are former trade and industry chief and ex-Monetary Board Member Peter V. Favila and East West Bank President Antonio C. Moncupa Jr., who has been identified with the ruling party’s PDP-Laban Research Planning and Development Institute.
Like the BSP governor, I am biased toward someone who knows every nook and cranny of the BSP. I prefer someone who can defend the independence of the institution; someone who can stand against intense political pressure.
Guinigundo and Espenilla both possess the credentials; with the former being more exposed to the media. He is a resource person who is up to the task of explaining the central bank position in various economic news or the BSP’s policy messages.
Espenilla, however, is the workhorse. He’s more into BSP regulatory issues related to the whole banking system. His herculean determination may not have received much mass media hype as Guinigundo’s, but he was very effective in strengthening the Philippine banking system, such that the country’s banks now are considered to be among the fittest in the Asean. Our banks today have robust capitalization position, affording them the resilience to absorb unforeseen shudders to the economy and bank customers.
I had a brief liaison with Espenilla in the early 1990s when I was doing the Philippine report for Euromoney London. I found him low-key and soft-spoken. He had no air of arrogance, despite having steered the BSP toward the development and implementation of financially inclusive banking regulations. These banking regulations prioritized the needs of local consumers, and institutionalized the National Retail Payment System project. He championed a more inclusive banking system that enabled micro, small and medium enterprises and low-income individuals to gain access to a broad array of financial services in unbanked and underbanked rural areas, through a proportionate regulatory approach.
Whoever is finally chosen as the new BSP chief certainly has big shoes to fill. This corner believes that it is essential, and in the country’s best interest, to sustain an effective fiscal management that is free from political influence. The Philippine central bank is one of our most integral institutions. It deserves someone who has the fiscal acumen, moral integrity and the strength of character to parry intense political pressure, most especially in these trying times.
For comments and suggestions, e-mail me at mvala.v@gmail.com.