BSP Governor reveals cancer scare, to continue with reforms

MANILA, Philippines — Bangko Sentral ng Pilipinas Governor Nestor Espenilla Jr. yesterday revealed he had a health scare – a bout with tongue cancer that was detected last November.

“Unfortunately, I got a curve ball in November last year when I was diagnosed with tongue cancer. Fortunately, it was very early stage and quite localized,” he told reporters via a messaging app.

The BSP chief said he immediately went under the knife to remove the tumor and underwent radiation therapy.

“I underwent surgery soon after to remove the problem. That was successful. My doctors say I’m now cancer-free. So I don’t expect this curve ball to slow me down,” he added.

Indeed, Espenilla was having difficulty talking late last year after reportedly undertaking a “dental procedure.”

“For insurance, I also had to go through radiation therapy as advised by doctors. That’s completed now. However, radiation therapy has unavoidable side effects. Mainly causing speaking difficulties for me due to dry throat and mouth sores,” he said.

Espenilla, 59, assumed office last July after being appointed as BSP chief by President Duterte, replacing former BSP governor Amando Tetangco Jr. who finished an unprecedented two six-year terms last July.

Upon assuming his post, Espenilla hit the ground running, implementing game changing and broad-based reforms.

He prioritized strategic financial sector reforms such as the development of the local currency debt market through a roadmap to be implemented within an 18-month time frame, as well as foreign exchange market and digitization reforms.

Espenilla said his doctors expect him to achieve full recovery within a month or so.

“I just have to hang on and be patient. Meanwhile, it’s work as usual for me. Onward with the financial market reforms! I am confident that this personal medical issue will not distract from the important work at hand,” he assured.

The BSP chief, who is currently on a pilgrimage to Israel with family and friends, said he still closely monitors the domestic financial markets with the impending reduction of the reserve requirement ratio for banks to 19 percent from 20 percent starting March 2.

“I left on Feb. 16 just as we launched a major financial market reform initiative: the phased reduction in our ultra-high RRR regime with any ensuing excess liquidity to be replaced by open market operations in the context of the interest rate corridor and term deposit auctions,” he said.

He explained the cut was not an easing of monetary policy stance, but was in operational adjustment that should have a neutral effect on the monetary policy stance.

“If BSP wants to change the monetary policy stance, BSP will signal that overtly, by changing the policy rate. But it can also do that more subtly without necessarily changing the RRP rate, by allowing the market-determined TDF rates to rise or fall by altering auction volumes,” he said.

The reduction is seen freeing up about P90 billion in additional liquidity into the system that could be absorbed by the term deposit auction facility (TDF). The volume of the facility has been raised to P110 billion from P40 billion at the start of the year.

According to Espenilla, analyst fears of ensuing looser monetary policy that could fuel more inflation is really unfounded.

“Moreover to the extent that speculators use RRR reduction as pretext for peso depreciation, BSP sells foreign exchange from its reserves to manage excessive peso volatility. That in itself also has the effect of draining peso liquidity from the system which causes a self-correction,” he said.

The key reason it is lowering RRR, the BSP chief said, is to promote a more efficient and level financial system that’s less biased against deposit-taking financial institutions that creates market distortions.

“This is really in a sense part of a grand normalization process. Alongside capital market reforms and foreign exchange liberalization. Implementing these reforms is both complex and exciting. It is a very absorbing endeavor for me,” he said.