MANILA, Philippines - Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr. tagged the global financial crisis as the most challenging event during his 12-year tenure as central bank governor.
Tetangco said during the panel discussion at the 2017 Convention of the Chamber of Thrift Banks (CTB) the global financial crisis in 2008 and 2009 would stand out as one of the most challenging as its scope and magnitude was wider than the Asian financial crisis in 1997 and 1998.
“There have always been challenges but I think the global financial crisis would stand out as one of the most challenging because of the scope as well as the magnitude of the crisis. It affected not only the advanced economies but also emerging markets. Including emerging markets in this part of the world,” he said.
The BSP chief who is set to step down on July 2 after serving the central bank for 43 years said the Philippines survived the shocks of the crisis with the adoption of the inflation-targeting framework of monetary policy in 2002 and a flexible exchange rate.
“We target inflation and we make sure the actual inflation rate is within the target range. We don’t target exchange rate but we also are mindful of the potential inflationary impact particularly to possibly change in expectations of exchange rate movements on inflation,” he said.
Tetangco, now 64, was appointed by former president Gloria Macapagal Arroyo as the BSP chief in July 2005 and became the first BSP governor to be reappointed to another six-year term by former president Benigno Aquino III in July 2011.
He declined the third term offer by President Duterte due to health reasons as he underwent a heart bypass in 2010.
Potential candidates include BSP Deputy Governors Nestor Espenilla Jr. and Diwa Guinigundo as well as East West Banking Corp. president and CEO Antonio Moncupa Jr. and former Trade Secretary and Monetary Board Member Peter Favila.
Tetangco said his successor should have a good understanding of what he is supposed to do as mandated by the BSP charter.
“As head of the BSP, you have to be familiar with primary objectives which would be maintenance of price and financial stability conducive to a balanced and sustainable growth of the economy,” he said.
He added the next BSP governor should also be patient as there would be many challenges.
“Sometimes, the results that you are looking for cannot be achieved quickly but you have to keep on trying. If you really believe that these are the reforms that are needed, then you have to pursue it and persevere,” he added.
Tetangco said he preferred an insider as his replacement to ensure a seamless transition as the BSP is a solid institution that is now ready for a leadership change.
“If you want a seamless transition in the BSP, the next governor should be one with central banking experience, an insider. If you look at those competencies, an underlying factor there would be familiarity with the mandate and how to deliver on it, as well as the culture of the organization,” he said.
Meanwhile, President Duterte said he will gather views from his allies on who should succeed Tetangco at the BSP.
Duterte, however, could not say whether he prefers and insider or an outsider for the BSP post.
“Well, I have to listen to everybody including the Senate and the political leaders of our country. And the appointee, whoever he is, must have (the) acceptance (of) all,” he said in a press briefing in Malacañang.
– With Alexis Romero