Newly-appointed Bangko Sentral ng Pilipinas (BSP) Governor and former Budget Secretary Benjamin E. Diokno said on Tuesday that he is ready to take on the challenge of leading the central bank in providing a fertile ground for inclusive growth.
“The role of BSP is to ensure steady sustained growth that is inclusive, in a regime of price stability,” he said, six hours after was informed by President Duterte that he would be the next BSP governor. He replaced the late Governor Nestor A. Espenilla Jr. who passed away last February 23 due to tongue cancer.
Diokno, who will turn 71 years old this month, said inclusive growth and the BSP’s role of making certain it is sustained are “the same objectives of the Duterte administration.”
Diokno said he feels “fine” after confirming that he is indeed the next central bank governor, besting market, economists and the banking sector’s favorites which are the three BSP insiders: Deputy Governors Diwa C. Guinigundo, Ma. Cyd Tuano-Amador, and Chuchi G. Fonacier. Tuano-Amador is the Monetary Board-designated officer-in-charge.
“I’m an economist by training so I have the appropriate academic background,” said Diokno.
“My various high level assignments have prepared me well for interfacing with heads of international and domestic financial institutions,” he added.
In a statement, the Bankers Association of the Philippines (BAP) said it is “optimistic” that Diokno’s “reformist brand of leadership” is almost a reassurance that he will continue the “necessary reforms and policies to strengthen the Philippine banking industry.”
“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,” said BAP, adding that the group “supports the new BSP Governor as a new chapter of the BSP is about to unfold. The association will remain committed in its role as a partner of the national government in building a strong economy through an empowered Philippine banking sector.”
Diokno will assume the unexpired term of Espenilla who was supposed to serve a six-year term, from July 3, 2017 until July 3, 2023. He will be the BSP’s fifth governor.
Under the BSP Charter, recently amended as Republic Act No. 11211, the BSP governor will not have to go through the Commission on Appointments to be confirmed.
In good hands
Manila Mayor Joseph Estrada believes that the BSP is in good hands now that it is under the leadership of former Budget Secretary Benjamin Diokno.
Estrada said that the appointment of Diokno, who also served as his budget chief during his presidency, speaks of his high integrity and financial expertise.
“He is well-known to be excellent in financial analysis and fiscal management. This is why I trusted him,” he said.
With this, the former chief executive expressed confidence that Diokno is capable of making the country’s banking and financial institution stronger.
“The allegations pertaining to budget insertion hurled against him by some lawmakers are all untrue,” Estrada said.
“Diokno’s integrity is unstained that is why President Duterte appointed him as BSP Governor,” he added.
Senators
Some senators on Tuesday said they welcome the appointment of Diokno as the new BSP Governor.
Senator Francis “Chiz” Escudero commended President Duterte for appointing Diokno to the post. “This will certainly ensure the stability, continuity & predictability of the country’s fiscal policies and gains. I wish him well!” Escudero said in a text message to reporters.
Escudero, who chairs the Senate Committee on Banks, Financial Institutions, and Currencies, also rejected insinuations that Diokno’s transfer to the BSP from the Department of Budget and Management (DBM) has something to do with the issues leveled against him by Rep. Rolando Andaya, former House majority leader and now head of the House Committee on Appropriations.
Senator Juan Edgardo “Sonny” Angara, chair of the Senate Ways and Means, echoed Escudero’s observation: “It’s something he’ll have to learn fairly quickly as the stakes are high.”
“But as he is known to be extremely bright, he should be alright. We wish him well,” Angara said.
Senator Panfilo “Ping” Lacson said that while Diokno may not be the best choice for the post, he believes his appointment as a BSP Governor is most welcome. “Knowing his long, reputable public service, both in the budget department and in the academe where he served with competence and integrity, he is still a welcome appointment as BSP Governor,” added Lacson.
Reluctant support
Despite some reservations, the business community threw their support behind the appointment of Diokno.
Alegria “Bing” Limjoco, president of the country’s largest business organization the Philippine Chamber of Commerce and Industry (PCCI), said “I must look at the positive. He has the longest experience, he is an economist from the UP School of Economics.” She added: “I cannot question the President.”
PCCI Chairman Emeritus Francis Chua cited Diokno as a “very experienced public servant. He can bring new ideas to the banking system. He can also create dramatic changes to the system.”
Philippine Exporters Confederation President Sergio Ortiz-Luis Jr. said that Diokno “will bring out of the box ideas” being a progressive economist from the UP School of Economics and from the Philippine Institute of Developmental Studies.
“Although many have reservations because the new BSP governor is not a traditional banker, I personally welcome Secretary Diokno. I think the small and medium enterprises will probably welcome him because he is progressive and that is what is good for the country,” said Ortiz-Luis.
The Management Association of the Philippines (MAP) said they welcomed the appointment of Diokno as the new governor of the BSP.
“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,” MAP said.
Diokno was appointed Secretary of the Department of Budget and Management (DBM) on June 30, 2016. A public sector economics and macroeconomics expert, this was his third appointment to the DBM, having served under President Cory Aquino and President Joseph Estrada.
Diokno has a Public Administration degree and Master’s Degree from the University of the Philippines. He holds a UP Professor Emeritus status after teaching at the university for 40 years. He has a Master of Arts in Political Economy from the Johns Hopkins University in Baltimore, Maryland, and Ph.D. in Economics from the Maxwell School of Citizenship and Public Affairs, Syracuse University in Syracuse, New York.
As a private sector professional, he has been an independent director of Asia United Bank. He also worked as chairman and CEO of the Philippine National Oil Company and the Local Water Utilities Administration.
Based on his resume, Diokno served as an adviser and consultant to the World Bank, Asian Development Bank, European Commission, and USAID. He also represented the Philippine government as alternate governor at the World Bank during the joint International Monetary Fund-World Bank annual meetings in 1998, 1999, and 2000.
(With reports from Hannah L. Torregoza, Bernie Cahiles-Magkilat, and Ria Fernandez)
