The passing of BSP Governor Nestor Espenilla

PHILIPPINES - In Brief 24 Feb 2019 by Romeo Bernardo

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Many had surmised that his job, particularly stressful last year with inflation on the uptrend, was probably making BSP Governor Espenilla's tongue cancer worse. His intermittent medical leaves signaled a daunting disease. But even though people thought it was only a matter of time before he resigned from his post, his death Saturday night was wholly unexpected. He was only 60 years old.The question now in financial markets is, who will replace him? The hope is that one of two insiders will be appointed: Deputy Governor Diwa Guinigundo who was the only other shortlisted candidate at the time of Governor Espenilla's appointment; and Mr. Peter Favila, a member of the Monetary Board. The latter is a seasoned commercial banker (headed 2 universal banks) and served as trade secretary under the presidency of now Speaker Gloria Arroyo, a close ally of the President. Speaker Arroyo herself, who is retiring from congress midyear, is talked about in Manila's small financial circle as a dark horse. Therein lies the disquiet. Quite apart from the crucial task of monetary management and banking supervision, the BSP Governor also chairs the Anti-money Laundering Council (AMLC). The latter post gives the holder tremendous power over political opponents. Thanks to a succession of professionals appointed as Governor, the BSP has earned praises as an outstandingly run independent non-political institution both locally and internationally. A political appointment gravely risks that reputation.Finance secretary Carlos Dominguez had once before told the President that the post of BSP governor was the most important appointment he would have to make as President. This time around, he may ha...