BIZ BUZZ: IMF economists get a BSP scolding | Inquirer Business

BIZ BUZZ: IMF economists get a BSP scolding

/ 02:22 AM January 26, 2024

When you’re at the negotiating table with someone like Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona Jr., better make sure you’ve done your homework.

Last October, Remolona confronted the International Monetary Fund (IMF) in Washington D.C. about the quality of the assessment team that had come to town to look at the public sector.

The IMF team had advised that the BSP Department of Loans and Credit (DLC) cease providing emergency loans without collateral, a suggestion that perplexed local regulators.


The DLC oversees emergency funding/rediscounting windows, which enable the central bank to refinance loans provided by banks to their clients.


Remolona, however, reckoned that the IMF team had overly fixated on the inventory of foreclosed assets and appeared to lack understanding of how rediscounting works in this part of the world.

Being the guardian of price and financial stability, the BSP extends discounts, loans and advances to banks—not only to influence the volume of credit, but at times, to extend a lifeline to banks facing precarious conditions (especially when there’s systemic risk).

It was also baffling for local authorities that some of the assessors were not even well-versed with the Silicon Valley Bank collapse in early 2023 (that was followed by two other small to mid-sized bank failures in the United States)

Has the IMF been sending relatively inexperienced economists, some of whom are reportedly “unpublished” or have yet to promulgate scholarly papers that had undergone rigorous peer review?

Is it because the Philippines hasn’t been too demanding? Local officials seem to think so.

Well, Remolona, a US Federal Reserve and Bank for International Settlements official before becoming the country’s chief monetary and banking regulator, won’t put up with it.


He explained and enumerated the items that the team had missed. To be fair, the IMF listened and brought in new economists who are more abreast with relevant literature.

Moving forward, the BSP has requested the IMF to furnish local authorities with the curriculum vitae of each member of the technical team prior to any visit/discussion.

The IMF has granted this request and, more importantly, it agreed to revamp the team assigned to the Philippines for the next technical assessment.

Otherwise, those who are supposed to give the “seal of good housekeeping” will again end up being scrutinized instead. —Doris Dumlao-Abadilla

Glenfiddich raises glass to top local startups

Scotch whisky maker Glenfiddich is raising the bar in the local business scene through a mentorship program for local startups.

Under its Where Next Club program, five “maverick” finalists were selected, including Parlon Wellness and Beauty Technologies by Claire Ongcangco and Miko Cornejo, AlliedHealth Academics led by Maria Borras and Carla Cuadro, Don Transport by Enrique Hormillo and Miguel Locsin, and GoGym, led by Jay Magsaysay and Felicia Perez.

But it was agribusiness-focused Mayani that bagged recognition as the breakthrough maverick for 2023 after rigorous but presumably sober deliberations.

The pitches were reviewed by Glenfiddich’s panel, comprised of Endeavor PH managing director Manny Ayala, Terry S.A. cofounder and president Anne Gonzales and 500 Global partner Martin Cu.

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Mayani will receive mentorship and guidance from the panel while Glenfiddich will provide a P1-million nonequity dilutive grant to the company. —Miguel R. Camus

TAGS: Biz Buzz, BSP, IMF

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