As the Bangko Sentral ng Pilipinas under his watch aspires to achieve “truly inclusive growth” through financial inclusion and a market-oriented monetary policy, Governor Nestor A. Espenilla Jr. in his first day as the top monetary official tasked to keep prices low and supportive of economic expansion pledged “continuity plus plus” in reforms and sought support from his central bank family.
In his first speech as BSP governor and Monetary Board chair for a six-year term until 2023, Espenilla expressed gratitude to his mentor and predecessor, the multiawarded Amando M. Tetangco Jr., who served an unprecedented two six-year terms as BSP chief.
“Governor Say, I am truly grateful for your mentoring all these years. Yours are truly big shoes to fill and I am thankful that I am inheriting such an exemplary and world-class institution,” Espenilla said, addressing Tetangco by his nickname.
Moving forward, Espenilla said: “I dedicate my term as BSP governor to building and leveraging on this legacy of excellence.”
“We shall endeavor to fulfill our core mandates with greater vigor and integrity to ensure that both the economy and the financial system remain strong, stable and resilient so that they facilitate transformational opportunities for all,” Espenilla said.
The BSP chief noted that while the Philippines continues to experience strong economic performance amid a stable macroeconomic and financial environment,” such growth could truly be meaningful only if it would be inclusive, creating jobs and improving the people’s welfare.
“The BSP has been promoting reforms in the macroeconomic and financial sectors, but we know that these are not enough. We have to push the envelope further. This is why the BSP has been passionate in its pursuit of its financial inclusion advocacy. We need to work on bringing central banking operations closer to the people. This would entail strengthening our commitment to advance our financial inclusion, financial education and consumer protection agenda to ensure that no one is left behind,” Espenilla said.
“Our policy agenda is therefore geared toward 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,” Espenilla added, referring to the Duterte administration’s aim to slash poverty incidence to 14 percent by 2022 as well as vision to make the Philippines a high-income country by 2040.
But Espenilla cautioned that despite sound macroeconomic fundamentals, the country needs to be mindful of potential sources of vulnerabilities.
“The year 2016 saw the unfolding of unexpected global events that have escalated the level of policy uncertainty and market volatility. We have 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,” Espenilla noted.
“Moreover, rapid technological innovations in the delivery of financial products and services are changing business models. Digital innovation is rapidly reshaping financial services as we know it 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,” the BSP chief added.
“We cannot also be blind to the dark specter 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,” according to Espenilla.
To bring central banking closer to the people, Espenilla said the BSP would continue to fine-tune our execution of monetary policy to make it even more market-oriented.