Who will be the next BSP/CB governor?

FROM FAR AND NEAR - Ruben Almendras (The Freeman) - March 7, 2017 - 12:00am

The term of BSP Governor Tetangco will end on June 30, 2017. President DU30 will have to appoint a new governor on or before the end of May this year to allow time for a smooth transition and preparation. There are four leading contenders for the position and they all are interested judging from the media exposure that they are doing. The contenders are: The two Deputy Governors Gunigundo and Espenilla, Ex-Secretary Favila, and Eastwest Bank President Mocupa. Lobbyists, people close to the president, party mates and Cabinet secretaries will be pushing for their candidates but the president will have the final say on the appointment. His choice will be important as it will signal and set again the tone of his governance in terms of morals, anti-corruption stance, adherence to meritocracy, and what is good for the country.

Governor Tetangco has had 12 years as governor with a number of awards from international organizations as among the best Central Bank governors. Given that he took the helm of the BSP at a time when the Philippine economy reached a position of relative stability and significant growth, and the political atmosphere had stabilized allowing him the necessary independence, his would still be a hard act to follow. His academic and professional credentials and his experience as a central banker are impeccable, and the manageable inflation and the peso stability in the last 12 years are proof of the success of his BSP management and on monetary policies. At a time when there is plenty of political noise in the Philippines due to DU30 rhetoric and questionable attacks on his local and international critics which may have economic repercussions, the incoming BSP governor should equal the capability and standards set by Tetangco.

I had and still have the opportunity to interact with Gunigundo and Espenilla as officer/director of two BSP-regulated organizations, and also as a Philippine Deposit Insurance Corporation director a few years back. Definitely, from within the BSP organization, these two are the most qualified and competent to assume as governor. Their academic/professional background and training are in the mold of Tetangco, so continuity would be the biggest advantage of either of these two contenders. The fly in the ointment in the case of Espenilla is his being a classmate of former president Aquino in Ateneo, which may matter to some people in the DU30 government but which should not be an issue to a fair government.

Favila and Mocupa are/were from the private commercial banks and have solid banking training and experience over and above their academic credentials. Favila had a stint as Secretary of Trade and Industry and had been a monetary board member while in that Cabinet position, so he is not a stranger to central banking. Mocupa went through the whole spectrum of banking and finance and eventually became president of one of the top ten universal banks in the country. Mocupa also happens to be the financial adviser of PDP/Laban which is the party that DU30 rode on for his election. Mocupa, however, is an activist that fought the Marcos dictatorship, which may be a plus or a minus for him depending on how the persons recommending or appointing will view it.

The local and international banking industry people are inclined to the two deputy governors as it will mean a seamless transition. The economists opined that central banking is not really commercial banking but more about managing the economy, so the BSP governor should be an economist. I personally know three of the four contenders and I believe all four are capable of taking on the BSP governorship. The rationale for the appointment may be more important.



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