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Espenilla: A Great Loss to the Nation

The passing of Bangko Sentral ng Pilipinas (BSP) Governor Nestor Aldave Espenilla Jr., a highly admired career central banker, is a great loss to the nation. Barely two years into his six-year term as governor, Espenilla’s death came as the BSP successfully steered the country away from a high inflation regime last year.


It was very unfortunate that Espenilla, still young at 60, succumbed to cancer—a disease that has been causing pain to a lot of Filipino families. I am hoping that one day researchers will discover a cure to this deadly disease.


I met Espenilla on several occasions as an alumnus of the University of the Philippines (UP) College of Business Administration where I earned both my Bachelor’s and Master’s degrees in Business Administration, nearly a decade earlier than he studied there. Nesting, as he is fondly called by his colleagues in the BSP, obtained a Bachelor of Science degree in Business Economics from the UP School of Economics and later a Master’s in Business Administration in the early 1980s, before going to Japan for further studies.


Right after graduating magna cum laude from UP, Espenilla joined the BSP as an analyst, spent his entire career in the banking regulator, gained recognition as the main disciplinarian of erring banks before becoming the BSP governor and chairman of the Monetary Board, its policy-making body.


Espenilla filled the large void left by Amado M. Tetangco Jr., a two-term governor, in July 2017. He is credited for strengthening the financial system, for making sure that banks protect people’s money and for encouraging technological innovations to bring banking services within the reach of the poor.


In a tribute, the Bankers Association of the Philippines said Espenilla’s leadership resulted in progressive reforms that now support a stronger Philippine banking system, including the enactment of the New Central Bank Act. “He leaves a legacy of a stronger and more inclusive banking system,” the bankers said.


The Chamber of Thrift Banks, for its part, noted that Espenilla’s “dedicated public service, his regulations to strengthen the financial viability of banks combined with his continued push for banking reforms and his passion for financial inclusion were greatly admired both here and abroad.”


No less than the Asian Development Bank (ADB) recognized Espenilla’s contribution to financial stability in the Philippines. The Ortigas-based multilateral lender said Espenilla, who also served as ADB alternate governor for the Philippines, championed policies to increase incomes by strengthening the banking sector and developing the domestic capital market. I couldn’t agree more.


“He sought to make financial services and literacy available to all Filipinos, and to modernize the payment system as a means to safely and securely distribute these benefits,” the ADB said.


Among Espenilla’s initiatives are the development of the domestic bond market, new and innovative ways to bring modern banking to rural underserved areas, and the digitalization of the retail payment system.


“Mr. Espenilla’s leadership in BSP’s pursuit of financial sector development and inclusion will remain an inspiration to all of us working to expand access to financial services for the poor and smaller enterprises, a key challenge in Asia. We look forward to continuing our support to his vision—a Philippines with strong, sustained growth and where no one is left behind,” ADB President Takehiko Nakao said in his tribute.


As we mourn Espenilla’s passing, we hope that his successor would be up to the task. The BSP has a very big pool of career central bankers who are highly educated and knowledgeable about the institution’s mandate—ensuring monetary stability.


I believe that anyone of the incumbent deputy governors—Diwa C. Guinigundo, Chuchi G. Fonacier and Ma. Almasara Cyd Tuano-Amador—is highly qualified and it would be beneficial for the country if the next BSP governor comes from within the institution.


The BSP, together with its Monetary Board, has always been independent, allowing the free market economy to work efficiently for the good of the majority. Its proactive response to inflationary pressures has been a source of stability and strength for the economy in recent years.


I believe that the appointment of a career central banker as the new BSP governor, along with President Duterte’s recent signing into law of the New Central Bank Act that expands the bank’s regulatory toolkit, would make the BSP even stronger in handling any inflationary crisis and supporting economic growth.