BSP Deputy Governor Nestor A. Espenilla Jr. Photo courtesy of Bangko Sentral ng Pilipinas
President Duterte on Monday chose Deputy Governor Nestor Espenilla Jr. as the country’s next Bangko Sentral ng Pilipinas (BSP) chief—a choice billed by Finance Secretary Carlos Dominguez III as “the most important economic decision” that the President would have to make.
Dominguez confirmed the long-awaited decision to the Inquirer in a text message saying “It’s N. Espenilla,” adding that this constituted the administration’s official announcement.
Espenilla—a career BSP employee who started his stint at the central bank in 1981 as a debt analyst—bested three other candidates in what administration officials described as a tight race between fellow Deputy Governor Diwa Guinigundo, former Trade Secretary and Monetary Board member Peter Favila and Eastwest Bank vice chair Antonio Moncupa.
Jobs No. 1 mission
In the end, Mr. Duterte appointed the man who had the least amount of political connections and the official who, according to banking industry insiders, had the least ambition for the job.
In an interview with the Inquirer in February, “Nesting” said the country’s next central bank governor would have to adopt job creation as “mission No. 1,” adding that policymakers must “keep their eye on the ball” to ensure that more of the country’s 100 million citizens enjoy the benefits of economic 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 said.
“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 joined the BSP just two years before an economic crisis pushed the Philippines into de facto bankruptcy in 1983, stopping its repayment of foreign debt due to a lack of dollars.
After graduating magna cum laude from the University of the Philippines with a degree in business economics, he worked for an honors MBA degree in 1982 and steadily rose through the ranks at the BSP until he was appointed deputy governor in 2005.
Espenilla accumulated over 35 years of experience in all aspects of modern Philippine central banking like monetary policy, banking supervision and financial regulation, payments system oversight, capital markets development, currency management, consumer protection and financial inclusion advocacy.
As head of the banking supervision division, Espenilla steered the BSP toward the development and implementation of financially inclusive banking regulations, including the institution of the National Retail Payment System project, which prioritized the needs of the Filipino consumer.
‘Bad cop’ role
His most important role, however, was acting as the central bank’s “bad cop” when dealing with financial institutions found to be in violation of regulations.
It is a role that earned him the ire and fear of some senior bankers, but also respect among other stakeholders in the financial industry.
Going forward, Espenilla said he wanted 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.”