With Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. set to step down on July 3, the head of one of the country’s top universities is hoping President Rodrigo Duterte will announce the name of his successor by May this year to pave the way for a transition that will assure investors that the economy is in good hands.
According to University of Asia and the Pacific President Dr. Winston Conrad Padojinog, the sooner the BSP leadership is settled, the better it will be for the Philippines’ economic fortunes.
“In large companies, stockholders get nervous when a successful CEO does not have a clear succession plan; the same is true for the country’s business community, which is naturally averse to uncertainty,” said Padojinog, an industrial economist and strategic management expert who obtained his Doctor of Business Administration degree from De La Salle University and his Master of Science in Industrial Economics from the Center for Research and Communication.
On the shortlist for the BSP post are Deputy Governor Nestor Espenilla Jr., the head of the BSP’s Supervision and Examination Sector; Deputy Governor Diwa Guinigundo, who oversees the BSP’s Monetary Stability Sector and also represents the BSP in the National Food Authority Council; and Antonio Moncupa, the President/CEO of EastWest Bank.
“I believe continuity is not as big an issue as familiarity. In Governor Tetangco we had a personality whose judgment we trusted based on his track record. We knew what we had with him at the helm of the BSP,” said Padojinog.
“Whether an outsider or insider is appointed BSP Governor, we are only sure of one thing: his name will not be Tetangco. So the early appointment of his successor will give the public ample time to familiarize itself with the new BSP head––his vision, and his policies. The transition will be very important in maintaining and building investor confidence,” explained the academic.
According to Padojinog, even the appointment of an insider “does not guarantee anything, even continuity.”
“That being said, we should also consider whether we need a BSP head who is willing to look at everything with a fresh eye, someone who will want to improve on what the BSP has done rather than be satisfied with its current performance,” added Padojinog.
The longtime economist added that the next BSP Governor should consider expanding the role of the BSP beyond just curbing inflation and stabilizing markets.
“With the right leadership, the BSP could also play a bigger role in wealth and job creation and lowering the poverty rate––and that is what the President may want to consider when he chooses the next BSP Governor, since those are his economic priorities.”
President Duterte has said that he wants to bring down poverty incidence to 17% by the end of his term in 2022, a 9% reduction from the poverty rate when he assumed office, which was at 26%.
The appointment of a new BSP Governor has been called “the most important, if not the most important appointment that President Duterte will make” by no less than Finance Secretary Carlos Dominguez III, who also sits on the Monetary Board.
Tetangco, who was appointed to his second term at the BSP by former President Benigno S. Aquino III, has said he prefers a BSP insider to take over when his second term as BSP chief ends in July. This sentiment has been echoed by former BSP Governor Jose Cuisia, Jr., who served as Ambassador to the United States, also under the Aquino Administration.
“Selecting Espenilla or Guinigundo will ensure continuity of sound monetary policy,” said Cuisia.
“This is such a critical appointment. Let us pray that President Duterte makes the right choice for the Filipino people.”