THE Bangko Sentral ng Pilipinas (BSP) will have a new governor come July 2017 in the person of Nestor Espenilla, Jr. He will serve the BSP in this capacity for the next six years, that is over and above his 36 years of service in the said government agency.
Before his appointment to this position, he was one of BSP’s deputy governors in charge of banking supervision and regulation. He bested another deputy governor, Diwa Guinigundo, and other known personalities like Peter Favila, a former trade secretary and member of the monetary board and Antonio Moncupa, Jr. of EastWest Bank.
He will replace Amado Tetangco, Jr. who was the governor of the BSP for two six-year terms, a pretty big shoes to fill in.
Tetangco, who served the BSP for 43 years, is considered among the best central bankers around the globe. It was during his term that the Bangko Sentral ng Pilipinas garnered the reputation of being one of the finest central banks in the whole world.
So, what is the Bangko Sentral ng Pilipinas?
The Bangko Sentral ng Pilipinas (BSP) was created by RA 7653 or the New Central Bank Act and functions as the Philippine’s central monetary authority. The BSP functions and operates as an independent and accountable body corporate in the discharge of its mandated responsibilities concerning money, credit and banking.
It has supervision over the operation of banks and exercise such regulatory powers over the operations of finance companies and non-bank financial institutions performing quasi-banking functions.
The primary objective of the BSP is to maintain price stability conducive to a balanced and sustainable growth of the economy. It also promotes and maintains monetary stability and convertibility of the peso.
So why is having a new BSP governer big news?
Well, the position is considered to be the peak of one’s banking and finance professional success. Aside from this, the central bank governor is in charge of steering the macroeconomy, especially during tough times.
The appointment of the BSP governor is one of the most important choices to be made by the President. This is because the BSP governor is tasked to manage the country’s wealth, which is not easy, especially with the threats coming from internal and external factors.
Tetangco, for his part, was able to keep the country’s economy stable especially during the time of global recession with fluctuations in world currencies and inflationary pressures.
Much like during Tetangco’s term, the pressure on Espenilla is to keep the economy stable amid worries on the drastic political policies of the current administration. He has already made clear that he will continue the policies that are already in place, and put into play reforms that will enable digital finance and expand the local debt market.
Espenilla will not only have big shoes to fill in but more challenges lie ahead as he takes over the country’s main manager of its wealth.
Some key issues include: the establishment of a more inclusive banking and financial system by providing better financial services to MSMEs across the nation, even in areas where there is minimal or no banking activity at all; establishment of the National Retail Payment System (NRPS) which will change cash and check-based transactions to using an electronic system, linking banks and companies providing services that need payment like mobile phones, etc.; and, external factors, including interest rate hikes by the Federal Reserve of the US and protectionism measures by other countries.
With these issues (and more) at hand, Espenilla’s 36-year experience already prepared him for this, not to mention his education attainment, having finished a business economics degree (magna cum laude) from the University of the Philippines, where he also finished his Masters in Business Administration (MBA) (with honors). He also earned a masters degree in Policy Science from the Graduate Institute of Policy Science in Tokyo, Japan.
Aside from being the governor of BSP, he will also chair the Monetary Board and the Anti-Money Laundering Council (AMLC). He will also represent the Philippines in the International Monetary Fund, World Bank and the Asian Development Bank.
It looks like a gargantuan task for Espenilla, but his knowledge and understanding of the dynamics of a whole gamut of issues, especially in Economics will be of great help to him. With him as the monetary authority’s chief, I can sleep better at night knowing that our economy is in good hands.
