IF Finance Secretary Carlos G. Dominguez III had his way, I would venture to guess that his choice for the next Bangko Sentral ng Pilipinas (BSP) governor would be either of the BSP chief’s two deputies, Nestor A. Espenilla Jr. and Diwa C. Guinigundo.
Outgoing BSP Governor Amando M. Tetangco Jr. himself favors someone from the ranks to be his successor.
I myself dread the possibility that the post would be given to an outsider as a political concession. Our banking system is too important to be left to the whims of stooges whose only qualification is their political affiliation.
For Tetangco—who has been credited with developing a robust and credible banking system—the important thing is that whoever wears his mantle would be able to solidify, and establish as the norm, the gains that our nation has achieved during his watch.
Espenilla and Guinigundo both have economic degrees that they put to good use throughout their BSP careers in managing the country’s macroeconomics. Both also sharpened their tools while toiling in the BSP’s economic-research department earlier in their careers.
The two also distinguished themselves in academics. Guinigundo graduated cum laude in 1976 with a diploma in AB Economics from the University of the Philippines (UP), while Espenilla earned a BS Business Economics degree and an MBA from UP, and an MS in Policy Science from the Graduate Institute of Policy Science in Tokyo, Japan.
Both have been involved in monetary-policy formulation.
Before monetary-policy issues are elevated to the Monetary Board, the governor convenes a policy committee composed of himself, Espenilla, Guinigundo and the head of economic research.
Espenilla’s post as bank supervisor is crucial. He gives valuable inputs about the state of the system through which the monetary impulses are transmitted to the real economy. (Although policy impulses are of equal importance to individuals, corporations and banks, the BSP deals only with banks.)
While Guinigundo’s job is to present the issues to the board where Tetangco also sits as a board member, Espenilla is tasked with detailing the shape of the banking system.
Let’s say that the banking system is a big house frequented by banks as its guests. Guinigundo makes sure that there is ample supply of water and enough power flowing to keep the lights on.
Espenilla, on the other hand, has to remain vigilant in keeping the plumbing, drainage and electrical systems in tip-top condition.
If the party goes wild, Guinigundo will temper the water or electricity supply. But for as long as Espenilla maintains in good running condition the electrical switches, the drains and the toilet flushers, the party goes on without a hitch.
Tetangco has been hailed worldwide for his extraordinary fiscal management. I have always believed, however, that the whole is greater than the sum of its parts—synergy if you will. His various international awards also stem from his ability to manage his two deputies.
What I sense, though, is that Tetangco would be more comfortable with relinquishing the BSP pedals to Espenilla. Tetangco is smart enough to know that Espenilla has proficiently kept the BSP’s “plumbing, sewer and electrical systems” in excellent condition; and has also shown resolve in addressing various banking problems.
Espenilla has always been a quiet workhorse. His efforts may not have received much media hype as those of Guinigundo’s, but when he delivers, he delivers big!
He has sculptured the country’s macroeconomic policy by transporting his exclusive viewpoint as the BSP’s main bank regulator to the decision-making process of the high-level BSP Advisory Committee on Monetary Policy. For instance, he has perfected BSP policies by connecting his path-breaking efforts in financial supervision to the promotion of an effective and efficient monetary policy at the backdrop of a rapidly developing financial system.
As the chairman of the bank supervision policy committee—the main platform for dialogue with various banking industry associations—he has established a culture of participation and feedback to aid in the crafting and communication of sound and efficacious bank-regulation initiatives.
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