The Bangko Sentral ng Pilipinas on Wednesday expressed full support to the appointment by President Rodrigo Duterte of Budget Secretary Benjamin Diokno as the new governor and chairman of the Monetary Board.
BSP officer-in-charge and Deputy Governor Cyd Tuano-Amador said in a statement that as the fifth governor of the BSP, Diokno would bring with him a special brand of leadership honed from decades of exposure to different facets of government operations to improve the lives of Filipinos, in cooperation with the private sector, the academe and various organizations.
Diokno will formally assume the top position in the BSP Thursday.
“The BSP community looks forward to his assumption into office [Thursday] and to working closely with him to ensure the smooth functioning of the central bank to effectively discharge its mandate to promote price and financial stability, to ensure a safe, reliable and efficient payments system as well as to help sustain economic growth that is inclusive and participatory,” Amador said.
Diokno completed his Bachelor’s degree in Public Administration (1968), Master’s in Public Administration (1970) and Master of Arts in Economics (1974) from the University of the Philippines Diliman. He also earned a Master of Arts in Political Economy from the Johns Hopkins University in the United States (1976) and a Doctor of Philosophy in Economics from the Maxwell School of Citizenship and Public Affairs at Syracuse University (1981).
A seasoned academic and policy expert, Diokno is also a professor emeritus at the University of the Philippines Diliman where he taught for 30 years. He has served three administrations: first as DBM undersecretary for former President Corazon Aquino and eventually as budget secretary under President Joseph Estrada and again for President Duterte.
Diokno pursued an expansionary fiscal policy to invest heavily on public infrastructure and human capital development. For the first time in history, the government disbursed more than 5 percent of the country’s gross domestic product on public infrastructure”•a testament to his firm resolve and expertise.
He also eliminated underspending, a trend where actual government disbursements fell below program. In 2014 and 2015, underspending was as high as 13.3 percent and 12.8 percent, respectively, amounting to P631 billion in the two-year span. This raised concerns about the slow delivery of government programs and projects as well as the poor absorptive capacity of implementing agencies.
Under Diokno’s watch, underspending in 2016 and 2017 went down to just 3.6 percent and 2.9 percent, respectively.
Diokno also pushed for an ambitious budget reform agenda amidst political resistance. Under his guidance, the Executive always submitted the proposed national budget on the day of the president’s State of the Nation Address, 30 days ahead of their Constitutional duty. He also championed the shift towards cash-based budgeting to ensure the prompt delivery of public services and completion of projects.
Diokno’s unexpected appointment as BSP chief surprised a lot of people because many were expecting the president to appoint an “insider” to succeed Espenilla.
Bankers said they were expecting more reforms under the leadership of Diokno that would further strengthen the domestic banking industry.
The Bankers Association of the Philippines welcomed the appointment of the former budget chief as the successor to the late Governor Nestor Espenilla Jr. who died of tongue cancer last month.
“A respected economist, academic and civil servant, Diokno spearheaded various budget and governance reforms which improved the efficiency of the delivery of government services in the country,” the BAP said.
“The BAP is optimistic that the reformist brand of leadership of the new BSP Governor will pave the way in continuing the necessary reforms and policies to strengthen the Philippine banking industry,” it said.
Finance Secretary Carlos Dominguez III, who leads the economic team of the Duterte administration along with Diokno and Economic Planning Secretary Ernesto Pernia, said Diokno would serve the unexpired term of Espenilla. Espenilla was appointed on July 3, 2017 by the president.
Dominguez also said Diokno’s stint as the chief of the interagency Development Budget Coordination Committee would give him “a macroeconomic perspective.”
Metropolitan Bank & Trust Co. expressed its commitment to continue to work alongside the BSP under Diokno’s leadership to support the continued growth of the economy.
Security Bank Corp. president and chief executive Alfonso Salcedo said the appointment of Diokno was not expected because a lot of people were expecting an “insider” to succeed Espenilla. Salcedo said Diokno is smart and competent enough for the post.
“He should be able to move up the learning curve quickly. Former Budget Secretary Diokno will be able to fill in the shoes of Nesting,” Salcedo said.