Remolona gets ‘A-’ in global central bankers’ report card

BSP)Governor Eli Remolona Jr. —Photo from bsp.gov.ph

MANILA, Philippines — Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona Jr. bagged an “A-” grade for his first year as head of the Philippine central bank in the 2024 report card of New York-based Global Finance magazine.

Remolona, who took over the BSP helm in June 2023, got the third highest grade in the annual report card that uses an “A+” to “F” scale for success in areas such as inflation control, economic growth goals, currency stability and interest rate management.

Notably, he earned the same grade as US Federal Reserve Chair Jerome Powell, who announced in a hotly anticipated speech last week that “the time has come for policy to adjust” amid a slowdown in the American job market.

“A” represents an excellent performance, with “A+,” “A” or “A-” being the highest grades that central bank governors of nearly 100 key countries can receive. An “F” means outright failure.

Global Finance announced only the top-rated central bankers for this year in a statement dated Aug. 19. Published annually since 1994, the full 2024 report card will appear in its October issue.

Fighting inflation

“Central bankers have waged war against inflation over the past few years, wielding their primary weapon: higher interest rates. Now, countries around the world are witnessing the tangible results of these efforts, as inflation has dropped significantly,” said the magazine’s founder and editorial director Joseph Giarraputo.

“Global Finance’s annual Central Banker Report Cards honor those bank leaders whose strategies outperformed their peers through originality, creativity and tenacity,” Giarraputo added.

In his first year as BSP governor, Remolona carried on the works of his predecessor, Felipe Medalla, in battling persistently high consumer prices.

In a bid to tame inflation, the BSP raised its policy rate by a total of 450 basis points (bp) to a more than 17-year high of 6.5 percent, among the most aggressive tightening in Asia.

This included an urgent 25-bp rate hike during an off-cycle meeting of the BSP’s policymaking Monetary Board (MB) that Remolona presided over in October last year.

A flare-up in inflation was seen again in 2024 due to high global energy prices and the El Niño onslaught.

In July, inflation jumped to 4.4 percent, the first time this year that price growth breached the BSP’s target band again.

But the BSP now expects inflation to go on a downtrend starting in August, as lower rice tariffs reduced the risks of upward price pressures in the coming months.

Meanwhile, the economy grew 6.3 percent in the second quarter, but favorable base effects masked an anemic consumption that had been weakened by high prices and expensive borrowing costs.

To finally give the economy a shot in the arm, the BSP early this month announced a 25-bp reduction in its policy rate, its first easing move in nearly four years, and Remolona said one more cut of the same size is possible either at the October or December policy meeting of the MB.

Solid experience

This year, only three central bank governors got an A+ grade from Global Finance: Denmark’s Christian Kettel Thomsen, India’s Shaktikanta Das and Switzerland’s Thomas Jordan.

Remolona is the seventh governor of the BSP and MB chair.

He has extensive policy and operational experience in monetary policy and international finance, having worked for 19 years at the Bank for International Settlements (BIS) and 14 years for the Federal Reserve Bank of New York.

The Basel, Switzerland-based BIS is an international organization that serves as a bank for central banks, acting as a forum to promote discussion and policy analysis and a center for economic and monetary research.

From 2019 to 2022, Remolona served as professor of finance and director of central banking at the Asia School of Business in Kuala Lumpur.

He also taught at Williams College, Columbia University, New York University and the University of the Philippines-School of Economics.

Before his appointment to the MB in 2022, Remolona served as an independent director of the Bank of the Philippine Islands and chair of its risk management committee.