NOTWITHSTANDING intense lobbying from allies and partymates, President Duterte on Monday appointed Nestor A. Espenilla Jr., current central bank deputy governor for the Supervision and Examination Sector, as the next Bangko Sentral ng Pilipinas (BSP) governor. He will take over from Amando M. Tetangco Jr., who will end his second term as BSP chief in July. Observers said Espenilla’s appointment validates official rhetoric from Malacañang that the President understands the importance of maintaining an independent and credible central bank.
Various sectors welcomed Espenilla’s appointment as the next BSP governor, noting the positive effects of continuity in ensuring that our nation’s coffers are in good hands. International financial services company Nomura said: “This is a positive appointment. It bodes well for a seamless transition and policy continuity. We think under Espenilla’s leadership, the BSP will continue to adhere to its inflation-targeting framework.”
In a news conference a day after his appointment, Espenilla highlighted continuity of reforms for his upcoming term as governor, saying drastic deviations should not be expected. He also spelled out his legislative agenda, which include the push for the pending amendments in the BSP charter, the relaxation of the bank-secrecy law, and the expansion of antimoney laundering provisions to other sectors in the economy.
To ensure continuity of Tetangco’s initiatives, Espenilla is expected to push for financial-market reforms, look out for opportunities for liberalization, and develop a more efficient capital markets. He said, “My main advocacy is to put in place regulation and processes that will make financial markets work more efficiently and make doing business easier. This is slow burn but high yielding. Financial inclusion is a priority and I plan to digitize the financial system while making sure that necessary safeguards are in place. This is going to be a balanced approach.”
Described by friends as the unsung central bank workhorse, Espenilla has proven to be an adept regulator and an economist who helped strengthen the Philippine banking system such that the country’s banks today are seen being among the fittest in the Asean with robust capitalization.
Espenilla joined the BSP in 1981 as a working student, steadily rising through the ranks until he was appointed deputy governor in 2005. Along the way, he was able to accumulate years of operational engagement in all key facets of modern Philippine central banking: Monetary policy, banking supervision and financial regulation, capital markets development, currency management and consumer protection, among others. As the chair 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 bank regulations initiatives.
The outgoing central bank governor earlier expressed confidence in the appointment of Espenilla, saying the choice of an insider for the position ensures the continuity of the policy and thought process in the BSP. Tetangco said, “I am confident that with him at the helm, the BSP will continue to be a pillar of support to the economy that should remain among the top performing economies in the world.”
Kudos, Mr. President, for a good choice.