ON ITS 24th anniversary today, the Bangko Sentral ng Pilipinas (BSP) will witness a changing of the guard.
Governor Amando M. Tetangco Jr., who has held the helm of the venerable institution for the last 12 years, will be bowing out of the public service.
He will be succeeded as governor and chair of the Monetary Board by Nestor A. Espenilla, Jr., who has held the position of deputy governor for Supervision and Examination.
Espenilla will be joined in the incoming Monetary Board by Peter B. Favila, Antonio Abacan Jr., Felipe M. Medalla and incumbents Juan D. de Zuñiga Jr., Valentin A. Araneta, and Carlos G. Dominguez III. Alfredo C. Antonio and Armando L. Suratos are bowing out after completing their respective terms.
Espenilla acknowledges that his mentor will be leaving behind a legacy of excellence, a fact which bankers in the local and international communities widely acknowledge.
Espenilla rightly gives his predecessor credit for spearheading the formulation of sound macro-economic policies, which provided a solid foundation for the country's unprecedented growth, and also for strengthening the banking system.
"We have strengthened governance and risk management standards as benchmarks for good banking," he told the Bankers Association of the Philippines (BAP) recently.
"We have adopted global reforms and standards and made sure these are in tune with our own domestic needs and requirements."
Espenilla adds that the financial system's resiliency is evidenced by the following:
1. Stronger balance sheets of banks with steady growths in assets, loans, deposits and capital.
2. The perceived ability of banks to absorb shocks and contain imbalances, both at the firm and the industry levels.
Espenilla said that while he is delighted to succeed Tetangco, "I know I have very big shoes to fill.... The standard is set so high."
But observers in the banking community believe that Espenilla has no cause to be daunted. He has, after all, been part of the team which made things happen at the BSP. Furthermore, his own credentials and experience are rock solid.
Asked by media what to expect during his stewardship, Espenilla replied: "Continuity, plus, plus."
Just exactly what he meant, he laid out before the BAP:
"Under my watch, the BSP will continue to move towards more market-based execution of monetary policy.
"We have started with the deployment of interest rate corridor (IRC) system and we will continue to review existing tools and policies in order to make the monetary system more efficient and market-oriented.
"We 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 (FMI).
"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.
"We are also highly interested in continually reshaping the financial system to be fully responsive to the needs of the domestic economy.
"This would entail providing for efficient retail payments under the NRPS project and an enabling regulatory environment for financial technology and for digital finance to develop without sacrificing prudent credit underwriting and information security standards.
"This would also entail strengthening our commitment to advance our financial inclusion and consumer protection agenda to ensure that no one is left behind."
Bottomline: With the help of a pro-active Monetary Board and BSP's dedicated and loyal staff, Espenilla will work hard towards the "attainment of a truly inclusive, strong and dynamic financial sytem".
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