A very critical appointment

On July 3 the unprecedented two-term tenure of Amando M. Tetangco Jr., the most-awarded and best-regarded governor of the Bangko Sentral ng Pilipinas and chair of the Monetary Board, will end.

The natural question is: Who will President Duterte appoint next? According to Finance Secretary Carlos Dominguez, the choice is “the single most important economic decision the President will make.”

Two career central bankers and two commercial bankers are mentioned as candidates:

Deputy Governor Nestor Espenilla Jr. heads the important Supervision and Examination Sector of the BSP which examines the books of all banks and is responsible for their regulation. He has served the BSP and its predecessor bank for 36 years, having worked in economic research, international operations, and the Office of the Governor. He holds a bachelor’s degree in business economics and an MBA from the University of the Philippines and a master’s degree in policy science from the Graduate Institute of Policy Science in Japan.

Espenilla has extensive experience in monetary policy, banking supervision and regulation, payments system oversight, capital markets development, currency management, consumer protection, and financial inclusion advocacy. The banking system today is stronger and more stable because of prudent regulatory measures and effective supervision under his stewardship.

Deputy Governor Diwa Guinigundo oversees the Monetary Stability Sector and has been serving the BSP for 38 years starting at the Economic Research Department. Now its highly respected top economist, he graduated cum laude from the UP College of Economics and earned his master’s degree in economics from the London School of Economics.

Guinigundo oversees the monetary policy and operations, international relations, loans and credit, currency management, and regional operations of 19 branches and three regional offices. He advises the Monetary Board on interest rates, the exchange rate, money supply, etc. He has represented the BSP in international bodies and was the 2010-2013 cochair of the Seacen Experts Group on Capital Flows.

Peter Favila, has over 40 years of experience in the public and private sectors: secretary of the Department of Trade and Industry during the Arroyo administration, Monetary Board member in 2008-2014, chair/president of the Philippine Stock Exchange, president of three banks (Security Bank, Philippine National Bank and Allied Bank), and chair of the Asian Bankers Association.

Favila was the consumers’ champion who leveraged his banking and finance background to bring a “wealth creation” mindset to the DTI. During his term, the Japan-Philippines Economic Partnership Agreement was ratified in 2008. He graduated from the Advanced Management program of the Wharton School, University of Pennsylvania, and earned his bachelor’s degree in banking and finance from the University of Santo Tomas. His awards include Most Outstanding Thomasian (UST) and Outstanding Bedan (San Beda College).

Antonio Moncupa is president/CEO of EastWest Bank and was a board member of the Bankers Association of the Philippines. He occupied senior positions at International Exchange Bank, Union Bank, and United Coconut Planters Bank. He is also a board member of BancNet, Philippine Dealing and Exchange Corp. and Philippine Clearing House.

Moncupa has transformed EastWest Bank into a highly profitable bank with diversified products and services. He holds a double degree in economics and accounting from De La Salle University and an MBA from UP. He heads the policy thinktank of PDP-Laban, which has endorsed him for the BSP position.

All four candidates are impressive but I believe that either of the career central bankers will be the best choice. With over 35 years of experience, they have a deep understanding of the central bank’s role in an economy that is experiencing sustained growth, an appreciation of the balance between growth and price stability, a comprehensive grasp of the issues facing the Philippine banking system, and integrity.

Selecting Espenilla or Guinigundo will ensure continuity of sound monetary policy, avoid the politicization of the BSP, and reinforce investor confidence.

This is such a critical appointment. Let us pray that President Duterte makes the right choice for the Filipino people.

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Jose L. Cuisia Jr. was a Philippine ambassador to the United States and a governor of the Central Bank of the Philippines.