Job-creating growth is Mission No. 1 for BSP’s Espenilla
ALBERT RODRIGUEZ
Jobs. Specifically, providing employment for Filipinos, the total headcount of which has already topped 100 million. This issue is Mission Number One for Bangko Sentral ng Pilipinas Deputy Governor Nestor Espenilla Jr. who, despite having been tasked with with helping ensure the health of the local banking system, has also kept a cautious eye on the threats being faced by the broader economy.
Espenilla—who is among the candidates being considered for the governorship of the BSP once the current chief, Governor Amando Tetangco Jr., retires in less than five months—is optimistic about the Philippines’ prospects, but warns that policymakers need to keep their “eye on the ball” to ensure that more Filipinos enjoy the benefits of growth.
“We need to stay focused on creating and sustaining a high-growth economy that can provide the productive job opportunities and higher standard of living for our young, large and fast-growing population,” he told the Inquirer in an interview.
“This is key to overcoming large-scale poverty and achieving a peaceful and stable society,” he added. “Six years will not be enough but we can certainly build a lot of momentum.”
Espenilla knows where he speaks of, having joined BSP in 1981 right after his college education, just a couple of years before the combined effects of the Ninoy Aquino assassination and the Latin American financial crisis would force the Philippines to declare a crippling moratorium on the payment of its foreign debt.
After graduating magna cum laude from the University of the Philippines in business economics, he continued with an honors MBA degree in 1982 and steadily rose through the BSP’s ranks until he was eventually appointed deputy governor in 2005.
Along the way, he was able to accumulate more than 35 years of active operational engagement in all key facets of modern Philippine central banking (monetary policy, banking supervision and financial regulation, payments system oversight, capital markets development, currency management, consumer protection and financial inclusion advocacy)—a rare feat in the central banking world where the need for specialization often results in “career silos.”
As head of the banking supervision division—the policemen and enforcers of the financial system—Espenilla steered the BSP toward the development and implementation of financially inclusive banking regulations that prioritized the needs of the Filipino consumer, including the institution of the National Retail Payment System project.
He also promoted a more inclusive banking system that provides access and improved delivery of a broad array of financial services to micro, small and medium enterprises and low-income individuals in unbanked and underbanked rural areas through a flexible and proportionate regulatory approach.
His efforts gained him international recognition as a subject matter expert in both emerging policy areas, leading to constant invitations to advise international bodies such as the Basel Consultative Group, the Global Policy Forum, the Better Than Cash Alliance and the Alliance for Financial Inclusion.
Most importantly, “Nesting” (as he is known to his friends) has acted as the central bank’s “bad cop” whenever dealing with banks been found to be in violation of regulations. It is a role that has earned him the ire and fear of some senior bankers, but also respect among other stakeholders in the financial industry.
However, Espenilla’s main “baggage”—which counts against his appointment to the highest BSP post—is his inadvertent association with former President Aquino. Both men were members of Ateneo de Manila’s high school batch of 1977, although Espenilla belonged to the 4-A honors’ class.
For now, he is focused on helping the central bank fulfill its main mandate of keeping prices of goods and services in check.
“These are basic fundamentals that should be consistently met and not compromised,” Espenilla said. “Without these, we risk a stop-and-go economy. That would be a disaster. It will discourage investments, create a lot of uncertainty and generally undermine confidence.”
Going forward, Espenilla wants the BSP to have a more proactive role in promoting the country’s growth.
“There’s a lot more the BSP can do beyond these,” he said. “A key role is to be a steadfast and credible champion of structural reforms in the financial system — in particular, promoting a modern digital financial ecosystem that allows innovative and competitive financial services, enables all to participate and treats clients fairly.”
That’s a good vision, much needed for the country’s economic wellbeing. But whether Espenilla gets to execute it or not may depend less on his actual ability than the perception of him by the ultimate appointing authority, President Duterte. To be continued.
