Ben Diokno

Benjamin E. Diokno celebrated his 75th year on earth with a simple but meaningful party last March 31.

President Ferdinand Romualdez Marcos Jr. came and surprised his chief economic manager with a hearty rendition of a famous 1960s hit. Vice President Sara Duterte also showed up and rendered a lively rendition of another hit song, despite the problematic acoustics of the venue.

Ben is one of the best of our economic czars and long-time public servants.  His work of many decades has had and will have a profound impact in making life better for most Filipinos of today and the coming generations.

There are four things to remember about Finance Secretary Ben Diokno:

1. As the Bangko Sentral governor (March 4, 2019-June 30, 2022) when the COVID-19 pandemic erupted, he engineered the most massive short-term recovery program ever to rescue the economy from total collapse.

He pumped an unheard of P2.3 trillion to the economy to provide liquidity to businesses and households as the economy withered from the blistering attacks of the pandemic and as household incomes dried up during 2020 and 2021.

As a result of Diokno’s strategy, from the deepest recession in the country’s history, with real economic production down by a record 19 percent, the economy marvelously recouped its losses to register robust growth rates averaging 6.5 percent, post-pandemic.

No Filipino has done more to contain the economic impact of the pandemic and to encourage and to do more for the common folk than Diokno.

For his achievements as BSP governor, The Banker magazine made Diokno the best central bank governor, in Asia and in the world.

2. He designed a financial inclusion program to enable some 20 million families to join the banking system for the first time through digitalization, promotion and licensing of digital banks and jawboning of banks to ramp up their respective digitalization and inclusion programs.

3. He coined and financed the greatest economic strategy of all time, the Build, Build, Build (BBB) program that resulted in the allocation of P800 billion to P1 trillion per year. This raised infrastructure spending to record levels, to as high as 5.5 percent of GDP.

Today, with Diokno as the secretary of finance, the BBB program remains the cornerstone strategy of the Marcos Jr. administration suffering from the spillover effects of the Ukraine-Russia war, the 40-year-high inflation rates and 14-year-high interest rates globally.

As DOF chief, Ben leads BBM’s economic team.  The job is immense: Turn around the economy, battle inflation, scale down interest rates, create jobs at the rate of one million additionally per year, solve the severe food and energy shortages and stimulate investments, domestic and foreign.

In Congress, Diokno got some help. The legislature approved three game-changing laws that should encourage business dynamism and investments: 1) repeal the 80-year-old Public Service Act to open areas where foreign investors were banned before, like telco, airlines and tollways; 2) the Retail Trade Nationalization Act which lowered for foreigners the barriers to retail, currently the most dynamic sector of the economy (which is fueled by consumption that supplies 84 percent of demand) and 3) amendments to the Foreign Investments Act to encourage professionals to bring their practice, knowhow and technology to the Philippines.

4. Ben is reforming the Military and Uniformed Personnel (MUP) pension scheme for which the government must pay immediately P11 trillion in pension benefits and perks. The P11 trillion is more than half of a P20-trillion GDP or economic production.

This is a scandalous setup. Imagine a large company grossing P20 billion a year and P11 billion of that is eaten up by the company’s security guards and other uniformed personnel.

The MUP pension system means a man whose education from elementary through high school to college has been funded by the state, is guaranteed a lifetime job till he reaches 56.

After that age, he gets a pension for life (usually till 75 or even 80); that pension (P220,000 a month, tax-free if you are a general) increases every year at a rate equivalent to the annual inflation rate although the guy no longer serves the government nor the people.

After he dies, the pension is transferred to his wife. If he marries a young wife, the pension is like tax-free money for up to 100 years.

5. Despite stiff opposition from many sectors, Ben is orchestrating the merger of Land Bank of the Philippines and the Development Bank of the Philippines, the government’s two largest banks.

The merger will create a superbank that will carve out as much as 30 percent of the Philippine banking business and repurpose LandBank to become the No. 1 bank where every Juan and Juana can store their hard-earned cash and every enterprise worth its salt can draw funding to create jobs and contribute to production.

The consolidation of LBP and DBP would create a super bank, the biggest in the Philippines, with assets of P3.796 trillion, deposits of P3.195 trillion and a loan portfolio of P1.681 trillion.

In contrast, BDO Unibank, the current No. 1 bank, has total resources of P3.727 trillion (just P69 billion smaller), deposits of P2.947 trillion (P248 billion smaller), loans of P2.523 trillion (P842 billion bigger) and capital of P442.95 billion (P161.392 billion

bigger).

Ben has a bachelor’s degree in public administration from the University of the Philippines, 1968; a master’s degree in public administration, 1970 and an MA in economics, 1974, both also from UP.

Abroad, he has a master’s degree in political economy, 1976, from the John Hopkins University in Baltimore, Maryland and a doctorate in economics from the Maxwell School of Citizenship and Public Affairs, Syracuse University, in Syracuse, New York, USA.

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Email: [email protected]