With the public interest in mind

Among the country’s regulatory agencies, the Bangko Sentral ng Pilipinas has constantly escaped accusations of being captured by the very industry it is regulating.

This is rightly so because it has demonstrated that it keeps the common good and the depositors’ interest in mind.

The comprehensive sanctions that the BSP imposed on the Philippines’ second biggest financial institution are the latest proof of its uncompromising stance.

Last week, it presented a list of sanctions on Metropolitan Bank and Trust Co., for a large internal fraud case uncovered last July in which a ranking officer allegedly stole P1.75 billion worth of corporate loans by diverting the funds into bank accounts under her control.

The sanctions against Metrobank include reprimands and the suspension of dozens of directors and officials “who failed to perform adequate oversight or have been complacent or remiss of their duties and responsibilities.”

The BSP’s policymaking Monetary Board also ordered the publicly listed bank controlled by the Ty family to set aside P4.45 billion of its capital to cover for higher operational risk.

Although not a fine, this will cause foregone revenues as the directive effectively precludes the bank from lending that amount and earning interest on it.

Prior to this case, the BSP also imposed a P1-billion fine, among others, on Rizal Commercial Banking Corp. for the latter’s role in the 2016 cyberheist involving funds stolen from the Bangladesh central bank that found their way to the local system and were eventually laundered in the local casinos.

It was the single-biggest monetary penalty on an erring financial institution in the country’s history.

Going largely unnoticed is the BSP’s tight watch on the financial health of the rural banking sector as well. As of the first nine months of 2017, the BSP has ordered the closure of six rural banks and one thrift bank across the archipelago.

These included the Cabanatuan City Rural Bank, Rural Bank of Iligan City Inc., Rural Bank of Ragay (Camarines Sur) Inc., Rural Bank of Goa (Camarines Sur) Inc., Rural Bank of Barotac Viejo (Iloilo) Inc., and Cooperative Rural Bank of Batangas, as well as the World Partners Bank (A Thrift Bank) Inc. based in San Pedro, Laguna.

No wonder the BSP has been receiving accolades from local and foreign institutions. Former BSP governor Amando Tetangco Jr., for instance, served an unprecedented two six-year terms as BSP governor.

In September 2016, the New-York-based business magazine Global Finance named Tetangco one of the world’s top central bankers for the eighth time, earning a prestigious “A” grade on the publication’s Central Banker Report Cards together with eight other heads of central banks worldwide.

Were it not for a legal restriction on the term of the BSP governor, Tetangco would have served a third six-year term
under the Duterte administration.

The BSP is a model regulator that should be emulated by such agencies as the Land Transportation Franchising and Regulatory Board, the National Telecommunications Commission, and the Energy Regulatory Commission.

These regulators have often been criticized for taking the interest of the industries they are regulating into primary consideration instead of that of consumers when deciding on issues.

Controversies involving corruption have also hounded these regulators, leading to frequent changes in their leadership.

Perhaps it would help to appoint to leadership positions those people who rose from the ranks, or those who have been with the agencies long enough to really know how to operate them.

The BSP has had longtime employees being named governor, including the late Gabriel Singson, Tetangco, and its current chief, Nestor Espenilla Jr. Kudos are in order for the BSP, for keeping the public interest foremost in mind.

We fervently wish we could someday say the same for the other regulatory agencies tasked to protect the public interest.