ON JULY 3, 2018, Nestor A. Espenilla, Jr. completed one year of his six-year term as governor of Bangko Sentral ng Pilipinas (BSP) and chairman of the Monetary Board.
When he assumed office last year he promised that during his watch “BSP will aspire to achieve truly inclusive growth through financial inclusion and a market-oriented monetary policy.”
He started his term with the peso closing in at P50.58 to the US dollar. The exchange rate of the peso to the dollar has risen to P53.41 this weekend, pulling up prices of goods and services.
At the outset, we asked Mr. Espenilla in our column of July 11, 2017 when he assumed office about what he was going to do to minimize the effect on prices with the continuous decline of the peso as against the US dollar.
We also wrote about our observation that there was not much banking expansion in the country, with bank offices concentrated only in urban centers. During the time of his predecessor, Amando M. Tetangco Jr., we saw the closure of many banks at the slightest infraction of the rules such that, even with his long service of 12 years as BSP governor, 36.4 percent of our municipalities in the country have remained unbanked.
It is ironic that during the first Consumer Finance Survey (CFC) conducted by the Bangko Sentral ng Pilipinas, monetary officials themselves underscored the pressing need for the banking sector to reach out to more Filipinos and teach them the value of saving. There is a need for greater effort towards a more inclusive financial system so more people would have access to bank products and services, such as deposit and loans and reduce poverty incidence, they stressed. But banking service is very limited up to now to the ordinary citizen.
BSP Gov. Espenilla’s policy, even after a year into his position, has become largely reactionary instead of being planned out in advance in the light of our volatile economic conditions.
On July 2, 2018 a strong editorial of a leading national daily titled “BSP’s ‘mission creep’” should serve as a wakeup call to Bangko Sentral authorities in the performance of their primary mandate. It aptly pointed out that Filipinos are going through difficult times now more than they should with the diminishing value of their savings and the erosion of what spending power they have left.
The editorial continued: “The BSP must get its act together to respond more forcefully against current inflation and, perhaps more importantly, act with more decisiveness – and independence — to prevent inflation from escalating further.”
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Historical Quote of the Week
“The first Filipino to fly an airplane for passengers – Ilonggo Jose Tinsay in 1925.”
(For comments or re-actions, please e-mail to jnoveracompany@yahoo.com)/PN
