By Lee C. Chipongian
Bangko Sentral ng Pilipinas (BSP) Governor Nestor A. Espenilla Jr. has won a grade B+ in the 2018 central bank report card issued by the New York-based Global Finance publication.
Nestor A. Espenilla Jr. (Bloomberg)
Espenilla assumed the BSP’s highest-ranking position in July last year. When the 2017 central bank report card was released, he had a tag “too early to say” and did not rate a score since he was considered a “rookie.”
Global Finance grades central bank chiefs on “how well they do their jobs.”
The publication noted the BSP’s monetary policy actions of past months which was “designed to safeguard macroeconomic stability in an environment of rising commodity prices and ongoing normalization of monetary policy in advanced economies.” Since May, the BSP has raised key rate four times in a row to a cumulative 150 basis points to curb high inflation and potentially ease pressures on the exchange rate market.
Global Finance also noted that while the Philippine GDP grew 6.8 percent in the first quarter this year, and employment and wages are increasing, it said the local currency has depreciated to a 12-year low at the time of review, as “government spending on infrastructure drew in imports, widening the current account deficit.”
It added that "many emerging-market central banks (such as the Philippines) have been forced to raise interest rates this year to prop up their currencies in the face of a stronger dollar. Others have intervened heavily in the foreign exchange market, drawing down currency reserves.”
Global Finance said its ratings are based on inflation control, economic growth, currency stability and interest-rate management, among other criteria. “The determination of central bankers to protect their independence in the face of political pressure and their skills in supervising financial institutions are also taken into account,” it said.
The 2018 central bank report cards rated the performance of 89 central bank governors of which 14 are rookies and not graded.
Among central bank governors in Asia Pacific, only the Philippines and Vietnam received B+ grades. Those given a higher grade of A are Australia, India, South Korea, and Uzbekistan. The rest either have B or B-, or had “too early to tell” tags.
Before his appointment as the BSP’s fourth central bank governor, Espenilla was a deputy governor in charged of the banking sector’s examination and supervision.
He is currently on an extended medical leave and is expected to return to work after October 17. In February he announced that he had tongue cancer and had surgery. He went on medical leave last September 19.