The BSP’s Bankers’ Night: Market volatility with a mix of Ginseng tea

MANILA, Philippines - It’s a reunion of sorts once more – the Bangko Sentral ng Pilipinas’ version of Malacañang’s Vin D’ Honneur.

Except of course the BSP’s Annual Reception for the Banking Community, commonly known as Bankers’ Night, is held under the glistening evening sky of January every year unlike the Palace’s traditional morning reception.

This year was no different. Last Tuesday night, the 400-year old Fort San Antonio Abad along Roxas Blvd. in Manila transformed once again into a glittering venue for the country’s banking community.

Guests started arriving as early as 5 p.m. Early birds included the men of the Philippine Stock Exchange – president Hans Sicat and chairperson Jose Pardo, and the regulator they are sometimes in disagreement with – Securities and Exchange Commission chairperson Teresita Herbosa. Needless to say, they didn’t arrive at the venue together.

Everyone came in their best as always – the gentlemen, sleek in their suits and barongs while the ladies donned their best evening wear.

Well-dressed as they all were, however, nobody could conceal the jitters on the prevailing stock market volatility, with the different guests exchanging thoughts on this more than the upcoming May elections.

The PSE’s Sicat said: “Nobody’s looking at the fundamentals anymore.”

Indeed, the equities slump might as well be the theme of the night. The day before, the 30-company Philippine Stock Exchange index (PSEi), the local stock barometer, dipped to 6,335.09, down 114.41 points or 1.77 percent.

But BSP Governor Amando Tetangco Jr., dapper as always in a dark suit, seemed to have allayed such concerns.

“Now, we start 2016 from a position of strength. This is a good place to start. We have done our homework. We should be able to manage external risks that may arise from continuing volatility and possible contagion and closer to home avoid excessive leverage and imprudent practices,” he said in his speech.

Tetangco said while the BSP anticipates 2016 will continue to test the resilience of the banking system, market volatility can heighten market liquidity and credit risks.

“We therefore need to stay firmly committed to the pursuit of financial stability as the overarching prudential norm. It is a public good that benefits us all and gives us the space to pursue growth and profit opportunities,” he said.

With the challenges, Tetangco advised the banking community to enjoy Ginseng tea or Maesil cha from South Korea, Oolong tea from Taiwan or Teh Tarik from Singapore, catching the attention of the crowd.

He said all of these different kinds of tea are said to help internal juices flow and rejuvenate the body.

“You may ask, why am I mentioning tea from Japan, South Korea, Taiwan and Singapore? Well, it is because the Philippine banking community is going to be even more dynamic with the entry of six banks from these jurisdictions. Like the tea that is good for our body, the entry of these six banks to the Philippines could catalyze further innovations in our banking sector. We expect more to come in,” he said as he highlighted the entry of new foreign banks in the country.

He said the entry of new foreign banks under a liberalized regime should further enhance the quality of competition among banks and nurture innovations that will ultimately benefit the general public.

In closing, Tetangco, a multi-awarded central banker, said the BSP would continue to pursue its reform agenda to ensure stability for the long-term.

“We are unfazed by the challenges that will come our way because we are prepared, because we have been doing our homework. And we embrace continuing reforms because that is the key to stability and to more opportunities moving forward,” he said.

Spotted during the night were some of the biggest names in the banking and finance industry.

The members of the Monetary Board – the policy-making body of the BSP — were all there: Finance Secretary Cesar Purisima, Freddie Antonio, Phillip Medalla, Andy Suratos, Jun de Zuniga and Val Araneta.

Taipan Lucio Tan graced the event but dodged banking and finance reporters who grilled him on whether or not he would take in foreign investors for Philippine National Bank.

Social Security System president Emilio de Quiros was there, too, and those who bumped into him called him “The (Controversial) Man of the Hour,” with SSS hogging the headlines following President Aquino’s controversial veto of the proposed P2,000 monthly SSS pension hike.

Other government and private sector officials spotted during the night include GSIS president and general manager Robert Vergara, SM Prime president Hans Sicat and sister Tessie Sy, chairperson of Banco de Oro, former Prime Minister Cesar Virata, former PSE president Francis Lim and National Treasurer Roberto Tan,” who arrived fresh from the launch of China’s Asian Infrastructure Investment Bank in Beijing.