Espenilla’s legacy of excellence in central banking
Credit to Author: The Manila Times| Date: Tue, 26 Feb 2019 16:28:19 +0000
THE nation, especially the banking community, mourns the early demise of Bangko Sentral ng Pilipinas (BSP) Governor Nestor Aldave Espenilla Jr., who belonged to a fine breed of homegrown, competent technocrats. He was the fourth governor of the reestablished central bank, one of the key economic reforms of the post-Marcos era.
Having lost his fight with cancer, Espenilla was unable to complete his term, unlike his predecessor, Amando Tetangco Jr., who served two six-year terms. But his litany of accomplishments as a central banker preceded his short stint as governor.
Espenilla held perhaps one of the most difficult jobs in government — making sure the nation’s banks don’t fail. For years, Espenilla held the deputy governorship in-charge of the BSP’s Supervision and Examination Sector, overseeing bank and even non-bank financial institutions and instituting risk-based regulations.
He had the unenviable task of shutting down problematic banks, including Banco Filipino and LBC Bank, as well as a host of undercapitalized rural banks. The job included fining violators of banking regulations, as in the case of Rizal Commercial Banking Corp., which was made to pay P1 billion for its role in the 2016 Bangladesh Bank heist.
Espenilla was exposed to banking at a very tender age, with his mother establishing a rural bank in their native Masbate province in 1968. After high school studies at Ateneo de Manila University, he finished business economics, magna cum laude, at the University of the Philippines (UP) in 1981; his MBA a year after, also at UP; and policy studies at Japan’s National Graduate Institute for Policy Science. He quickly built a reputation as a stern regulator and a public servant with integrity, never allowing his family background to influence his decisions.
Despite his tremendous influence and career success, Espenilla never forgot about the ordinary Filipino. Among the sound policies he had pursued was financial inclusion, which meant providing banking services to the multitude of the “unbanked,” and small entrepreneurs access to credit. The Philippine microfinance sector would not be as strong as it is today if not for Espenilla’s vision and guiding hand.
Filipinos who enjoy the convenience of electronic and online payment channels also have Espenilla to thank for; one of his principal achievements as deputy governor was the establishment of the National Retail Payment System, a policy and regulatory framework that aims to provide direction in carrying out retail payment activities through BSP-supervised financial institutions.
As BSP governor, Espenilla provided stability and continuity, and steered monetary policy throughout a period of heightened inflation. Under him, the BSP successfully lobbied Congress to pass a new charter, providing it with more financial and regulatory muscle.
The loss of Espenilla, known as “Nesting” to his colleagues and the business press, will be deeply felt for years to come. But we are confident that he has instilled his own brand of dedication, integrity, professionalism and competence in central banking on the BSP workforce, with whom he had served outstandingly for three decades.
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