New Bangko Sentral ng Pilipinas (BSP) Governor Nestor Espenilla Jr. vowed on Monday that the central bank will continue to fulfill its core mandates to ensure that both the Philippine economy and the financial system remain strong, stable and resilient to facilitate transformational opportunities for all.
Espenilla made the statement in his inaugural speech at the 24th Anniversary Program of the central bank at the
BSP Complex in Manila. Espenilla also took his oath as the new Bangko Sentral chief before Finance Secretary Carlos Dominguez 3rd, who represented President Rodrigo Duterte.
“The BSP will continue to fine-tune our execution of monetary policy to make it even more market-oriented,” he said, noting for example the deployment of the interest rate corridor system in June last year.
Espenilla said the BSP will work closely with other government agencies and private sector stakeholders to accelerate capital market reforms, including the development of the necessary financial market infrastructures that provide orderly trading, clearing and settlement of the full range of financial transactions.
“Leveraging on the much-improved and continuously improving governance and risk management practices of banks and other supervised financial institutions, we intend to further open up competitive opportunities to lower the cost of doing business, provide more customer choices, promote efficiency, and encourage innovation,” he said.
Espenilla added that the central bank will advocate for the timely enactment of vital legislations such as the amendment of the BSP Charter, the passage of the Payment System Act, the Islamic Banking Act, and the easing of the deposit secrecy law.
“We also join the initiative to further strengthening the Anti-Money Laundering Act to win the fight against money laundering and terrorist financing, and thus secure the integrity of our financial system,” he stressed.
Under his leadership, Espenilla said the Bangko Sentral will do its part and remain focused in pursuing
comprehensive reforms to enable the economy to position well in the rapidly integrating Association of Southeast Asian regional economic system.
He cited the need to bring central banking operations closer to the people by strengthening commitment to
advancing financial inclusion, financial education, and consumer protection agenda to ensure that no one is left behind.
“Our policy agenda is therefore geared towards a truly inclusive, strong and dynamic financial system that is fully responsive to the needs of the domestic economy in line with the government’s medium-term development plan and the AmBisyon Natin 2040,” he said.
Espenilla said that while sound macroeconomic fundamentals and gains from the reforms will continue to support the country’s growth prospects, there is a need for monetary authorities to be mindful of potential sources of vulnerabilities.
He said the monetary authority has to be prepared as well for the seemingly imminent wind-down of ultra-easy monetary policies in advanced economies.
“We need to be mindful of such events and their potentially far-reaching consequences since these could undermine our economic performance and disrupt our carefully-laid plans,” he added.
Moreover, rapid technological innovations in the delivery of financial products and services are changing business models, Espenilla noted, pointing out that digital innovation is rapidly re-shaping financial services to serve a new breed of financial consumers who are young, upwardly mobile, technology-savvy, and have exacting demands for the convenient delivery of financial products and services.
Espenilla stressed that the role of social media, particularly as an information channel, has accelerated, highlighting the speed at which information, both good and bad, and even fake news, can spread at an unprecedented speed.
“We cannot also be blind to the dark spectre of cyber-crime that can quickly undermine trust in our financial system. There is no substitute for eternal vigilance, timely action, and public education. We are all in this together and have a shared responsibility,” he said.
“As policymakers and financial supervisors, we have to be in tune with these emerging market trends and evolving client needs, including the ‘millennial’ upside of our young population,” he added.
The new frontier presents central banking with challenges that have not been there before.
“The changing landscape calls for us to be more vigilant, proactive and dynamic in responding to the needs of our diverse stakeholders,” he said.
Espenilla noted that being the new “team captain” of the BSP have been an immense honor and privilege.
“Believe me when I say that this is a role that I do not take for granted. However, I need your prayers and support, too. They say that it can be lonely at the top. From that vantage point, national issues and high-level problems may overshadow the needs and concerns of the BSP community,” he said.
“Even when the going gets tough, my fervent wish is that I never lose sight of where I came from … I therefore owe it to all of you to stay connected and to continue serving the BSP community even as we all serve our country with skill, honor, integrity, and accountability,” he added.