INCOMING Bangko Sentral ng Pilipinas (BSP) governor Nestor Espenila Jr. envisions a more market-based execution of monetary policy under his watch.
Speaking before bankers last week, Espenilla laid out his early plans for his term upon his assumption of office in July.
Espenilla said while current central bank governor Amando M. Tetangco Jr. has already started with the deployment of an interest-rate corridor (IRC) system, he is to “continue reviewing existing tools and policies” in order to make the monetary system more efficient and market-oriented.
The incoming governor also told members of the Bankers Association of the Philippines during a forum that the BSP, under his watch, will continue to pursue capital market reforms to provide a viable alternative source of financing for long-term investments, including the development of the necessary financial-market infrastructures.
“With respect to liberalization initiatives, we intend to further liberalize the provision of financial products and services, including our existing rules on foreign-exchange transactions, to achieve a more risk-based, transparent and market-determined policy framework,” Espenilla said.
He added he is also keen on pushing for a modern and innovative financial system to be fully responsive to the needs of the domestic economy.
“This would entail providing for efficient retail payments under the NRPS [National Retail Payment System] project and an enabling regulatory environment for financial technology and for digital finance to develop without sacrificing prudent credit underwriting and information-security standards,” Espenilla said.
“This would also entail strengthening our commitment to advance our financial inclusion and consumer-protection agenda to ensure that no one is left behind,” he added.
Espenilla admitted to the local bankers that while he is “delighted” to succeed Tetangco as governor, he sees “very big shoes to fill”.