BANKERS in particular breathed a sigh of relief when Malacañang finally announced on Monday that Deputy Gov. Nestor Espenilla Jr. will take over the helm of Bangko Sentral ng Pilipinas, the regulator of the country’s financial system, when Gov. Amando Tetangco Jr. retires in July.
Relief because in the intervening months since Tetangco decided not to go for a third six-year term earlier this year, the banking industry went through bouts of anxiety at the prospect of having an outsider take over the central bank leadership, especially when outsiders were mentioned as possible candidates, such as former President and now Pampanga Rep. and Antonio Moncupa Jr., the outgoing chief executive officer of East West Banking Corp., on the grapevine.
As a former President and now House representative, Gloria Macapagal-Arroyo carries some weight in the business community with her Economics background to boot, but she is not a central banker. She herself expeditiously doused the speculation about her appointment to the post, issuing a statement that she was, in fact, not interested in the position.
In the case of Moncupa, yes, he is a banker, but then again not a true central banker. His name was officially endorsed by Senate President Aquilino Pimentel 3rd, who belongs to the same political party PDP-Laban as President Rodrigo Duterte.
Then there was also Monetary Board member Peter Favila, also a former banker and more. He was appointed by Arroyo to head the Department of Trade and Industry in 2010. Supposedly, Favila was a trusted consultant of Tetangco in matters related to monetary policies, the prime regulatory function of the central bank.
But the industry, and the outgoing governor himself, knew that leading the Central Bank was a daunting task that must be bestowed upon no other than an insider. What the industry wants, however, and what Tetangco wants as well, is a genuine insider, or the real deal, who could take over the central bank leadership seamlessly without going through the rites of passage. There is also no time to go through the learning curve.
The Philippine banking system is a financial behemoth, registering an annual asset growth of 12.4 percent to P13.6 trillion in 2016, according to the latest BSP data released on April 25.
As of end-2016, there were 602 operating banks and 10,576 bank branches and other offices, including 691 micro banking offices. There were also 19,084 automated teller machines and 119 banks with electronic banking facilities. And the BSP is at work to widen financial access points under the national financial inclusion strategy espoused by the government.
During an interview in Yokohama last week, Finance Secretary Carlos Dominguez 3rd told an international news agency how he helped President Duterte decide on what would probably be the most important appointment the President would have to make.
On the surface, the level of anxiety went up a notch on speculation that the succession would not be a matter of qualification but presidential prerogative. After all, Tetangco was highly regarded by his peers abroad because he oversaw the financial system through one of the most turbulent times in financial history, the 2007-2009 financial crisis from which the United States and other advanced economies are only now beginning to make a full recovery.
At the end of the day, running a central bank is not simply about monitoring and supervising banks as monetary policies have an impact on each and every peso that each and every Filipino spends each day.
For now, the industry Espenilla serves has welcomed him with open arms. And the term of endearment is sincere on the part of bankers that Nesting, the nickname by which they call him, is the right choice by the appointing power in favor of the financial system.