Favila’s pragmatic approach to central banking

Third of a series

Until last January, no one thought that Peter Favila would be a serious contender to be named the next governor of the Bangko Sentral ng Pilipinas.

Yes, he did serve on the policymaking Monetary Board—the seven-person body responsible for determining the purchasing power of 100 million Filipinos— from 2008 to 2014, but he worked mostly behind the scenes.

And yes, he continues to serve as a BSP consultant, handling delicate “missions” on behalf of Governor Amando Tetangco Jr., and untying policy knots, relaxing political bottlenecks and smoothing over disputes by talking to concerned parties quietly, away from the prying eyes of the public.

For all intents and purposes, Favila serves as the current BSP chief’s troubleshooter, called upon to fix problems that defy conventional solutions.

Nowadays, he often shuns the limelight in deference to Tetangco. Favila politely declined the Inquirer’s request for an interview for this profile saying it would be awkward for him to prescribe future policies or comment on current issues while still working for the current governor.

But he did not always exhibit this level of reserve he has today.

Favila—nicknamed by his peers as “Fabulous,” not mockingly, but in good-natured jest— has had a high profile career that saw him serving as the president and CEO of three banks, Security Bank, Philippine National Bank and Allied Banking Corp.

He has four decades of experience in the financial system that covers investment banking, treasury and trading, credit operations, human resources management and general management.

He became the president and later, chair, of the Philippine Stock Exchange and the Securities Clearing Corp.

His career in government started on an advisory capacity when he was named presidential adviser on infrastructure finance and economic adviser to the House of Representatives. Soon after, he was appointed Secretary of Trade and Industry by President Arroyo, serving for over five years.

As trade secretary, Favila assumed the role of consumers’ champion, fighting violators of price regulations, product standards and fair trade laws. He also served as the top salesman for the Philippines in international investment roadshows.

At a time when international trade deals were being forged left and right, he acquired a reputation for being a tough trade negotiator, fighting for market access and voice for developing countries.

More importantly, Favila leveraged his banking and finance background to bring a “wealth creation” mindset to his job at the helm of the Department of Trade and Industry (DTI).

He shaped the services and programs of DTI on investment and export promotion and small and medium enterprises and industry development towards creating the right institutional support. The goal was to convert opportunities into actual wealth for more Filipinos.

This meant streamlining business processes for SMEs, and looking after the welfare of consumers and employees.

“Growth should emanate from the bottom rather than let people wait for the rewards of development to trickle down,” he once said.

Indeed, Favila’s contributions in the private or government sectors have been well recognized. He has received accolades from his alma maters—the Most Outstanding Thomasian Award from the University of Santo Tomas and Outstanding Bedan from San Beda College. But his most distinguished awards came from heads of states.  From former Philippine President Arroyo, he received the Order of Lakandula, with the rank of Bayani.  From King Juan Carlos I of Spain, he was honored with the Gran Cruz Orden de Isabel la Catolica.

Recently, he was conferred the Order of the Rising Sun, Gold and Silver Star by Emperor Akihito of Japan—an honor bestowed on him for helping forge the Philippines-Japan Economic Partnership Agreement, the landmark free trade deal that made car ownership more affordable for many Filipino motorists.

He came full circle in his banking and government careers when he was appointed to the Monetary Board. There, he gained insights into the inner workings of the central bank and served as chair of the board risk oversight committee, member of the corporate audit committee and an adviser to the MSME committee, bringing an outsider’s pragmatic and no-nonsense approach to the solution of intricate and esoteric monetary policy problems.

It is perhaps because of these experiences that he is now considered by many observers as “the man to beat” in the unpredictable race for the BSP governorship.

When asked about his chances, all Favila is willing to say is: “I’m ready to serve.” To be continued