Bankers are expecting more reforms under the leadership of newly appointed Bangko Sentral ng Pilipinas Governor Benjamin Diokno that will further strengthen the industry.
In a statement Tuesday following the appointment of Diokno by President Rodrigo Duterte Monday evening, 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,” 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.
The organization expressed its support to the new governor, saying BAP would remain committed in its role as a partner of the national government in building a strong economy through an empowered banking sector.
Finance Secretary Carlos Dominguez III, who leads the economic team of the Duterte administration along with Diokno and Socioeconomic Planning Secretary Ernesto Pernia, said Diokno would serve the unexpired six-year term of Espenilla until the year 2023.
Espenilla was appointed on July 3, 2017 by the President.
Dominguez also said Diokno’s stint as the chief of the interagency Develoment Budget Coordination Committee would give him “a macroeconomic perspective.” Dominguez said Budget Undersecretary Janet Abuel will be officer-in-charge of the department.
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. But 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,” he added, using Espenilla’s nickname.
ING Bank Manila senior economist Nicholas Mapa said with the current stable inflation environment, Diokno might “think about easing off the brakes and look to help support the growth side of the equation,” referring to the aggressive stance of the BSP last year when it raised interest rates by a total of 175 basis points to 4.75 percent, in a bid to tame inflation.
“Ben Diokno, appointed late on Monday evening has spent his career on the fiscal side of the fence and has indicated that the “role of the BSP is to ensure sustained inclusive growth,” Mapa said.
Diokno completed his Bachelor’s degree in Public Administration (1968), Masters 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 doctorate in Economics from the Maxwell School of Citizenship and Public Affairs, Syracuse University (1981).
Diokno is also professor emeritus at the University of the Philippines Diliman where he taught
for 30 years. He has also 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 Rodrigo Duterte since 2016.
Before Diokno’s appointment, former BSP Governor Amando Tetangco Jr. said he favored tapping a BSP “insider” to replace Espenilla.
The Palace on Tuesday said it was optimistic Diokno would pass muster with the Commission on Appointments, despite his run-in with congressmen over budget issues.
Presidential Spokesman Salvador Panelo said Duterte decided to name Diokno to the BSP post during the 35th Cabinet meeting.
He said the President saw Diokno as “a man of integrity, competence, and expertise.”
In naming Diokno to the post, the President apparently ignored allegations against him by the House appropriations committee chairman Rolando Andaya, who accused the Budget chief of irregularities in the budget process.
“[He ignored it] because the allegations are not true. I don’t think anybody believed him Andaya,” Panelo said in a Palace press briefing.
Asked if the alleged budget irregularities will impede the approval of Diokno in the CA, Panelo said: “I don’t think so.”
House leaders hailed Diokno’s appointment while those in the opposition criticized it.
Surigao del Norte Rep. Robert Ace Barbers, chairman of the House committee on dangerous drugs, said “Diokno possesses the expertise, knowledge and experience in economic affairs of the state.”
Parañaque City Rep. Gus Tambunting also supported Diokno’s appointment.
“I agree with the President’s choice. Secretary Diokno is an economist with a lot of experience in government, the private sector, and the academe. He is very qualified to head the BSP, the body which charts our country’s monetary policy,” he said.
PBA party-list Rep. Jericho Nograles said he was satisfied with Diokno’s appointment.
“We need an economist in the BSP and Ben Diokno is a good choice… Diokno is more than qualified especially because he is known for his independence. Our economy needs an independent and apolitical BSP and Diokno will bring that to the institution,” Nograles, a deputy majority leader, said.
But Bayan Muna party-list Rep. Carlos Zarate said Diokno’s appointment as BSP governor was a disappointment in light of the corruption allegations leveled against hin.
“No meaningful and substantial change will happen to the lot of our millions of poor people with the repackaging of Secretary Diokno, who is now hounded by corruption charges and of fattening even more the graft-ridden pork barrel system while at the helm of [Department of Budget and Management],” he said.
“He will just bring to BSP his pseudo-reformist mindset and pursue more neo-liberal monetary policies that are detrimental to our country and people,” Zarate added.
Senator Francis Escudero said Diokno’s appointment would ensure stability, continuity and predictability in the country’s fiscal policies.
But Senator Panfilo Lacson said Diokno might not be the best choice because he is not well known to hve much banking experience and has yet to introduce himself to the international banking community.
The Management Association of the Philippines said it was confident that the new governor would do a good job as successor to one of the most important government positions in the land.
“We believe that his expertise as an economist and his extensive experience in the executive branch on fiscal policy and management will serve him well in his new job,” the group said.
The group also supports the BSP’s initiatives to maintain price and financial stability in support of sustained economic growth, a more efficient payments system as well as its efforts to further broaden financial inclusion.
The Philippine Chamber of Commerce and Industry shared similar view.
PCCI Chairman Emeritus Francis Chua said Diokno was a very experienced public servant.
“He can bring new ideas to the banking system. He can also create dramatic changes to the system,” he added.
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