Former central bank chief and now Finance Secretary Benjamin E. Diokno on Monday, July 4, reiterated his full confidence in his successor, Felipe M. Medalla, in ensuring a pandemic-proof, digitalized and “agile and innovative” banking system that is even closer to the people.
“I am confident that with the leadership of your new team captain — Governor Medalla — and the Monetary Board, you will continue to deliver game-changing reforms and bring the BSP even closer to the Filipino people,” said Diokno during the 29th BSP anniversary and handover event.
The BSP in its present form was established on July 3, 1993. Including the years as Central Bank of the Philippines (CBP), the central bank has been operating for 73 years. The BSP was created to replace the bankrupted CBP under the former Marcos regime which ended in 1986. The old CBP’s woes were passed down to the Central Bank-Board of Liquidators (CB-BOL) whose debt to the government was still at P413.45 billion at the end of 2016. The CB-BOL lapsed in 2018 after it transferred about P3.2 billion of its assets to the National Treasury.
Diokno, after serving only three years as BSP chief, was appointed as the new DOF head under the Marcos administration. The BSP governorship has a fixed term of six years. The remaining 12 months in Diokno’s term – which was originally the late Governor Nestor A. Espenilla Jr.’s term – will be served by Medalla.
Medalla’s own six-year term as Monetary Board, in turn, will be filled up by a new Monetary Board member which will be named soon. Under the BSP Charter, there has to be seven Monetary Board members including the BSP chief which is the chairperson.
He only served for three years as BSP governor but Diokno was at the helm during the worst period of the Covid-19 pandemic.
“We have gone through a crisis like no other, with no emergency response playbook to which we could refer. But we kept our eyes on the ball. We remained agile and innovative. We boosted market confidence. We implemented extraordinary liquidity measures,” said Diokno in his first speech as DOF secretary.
“The pandemic has lasted years, and we know it is not yet over. But throughout this period, we did not sit idly by. We pursued many reforms, including on the legislative front,” said Diokno.
These BSP-backed reforms include the Financial Institutions Strategic Transfer Act and the Financial Products and Services Consumer Protection Act, among others. Before the pandemic, the BSP also helped in the enactment of the Gold Law, the PhilSys Act, the Islamic Banking Law and the BSP Charter’s own amendments in 2019.
Diokno will still be a Monetary Board member as ex oficio or cabinet member. He will still be involved in crafting monetary policy to temper rising inflation and to ensure a capital-strong banking industry.
The BSP as a highly independent government financial institution (GFI) is a much sought-after GFI employer. It is not only prestigious to work at the central bank, but employees have the highest state-funded salaries across the government system.
During the pandemic, BSP employees – which in 2019 before the pandemic numbered 5,000 including the regional offices – had their medical insurance subsidies increased and granted hazard pay.
In January this year, the Monetary Board approved “significant” pay hikes for all BSP employees. They were also granted with an anniversary bonus equivalent to one month and a half of their monthly salary, net of tax, this month.
“Throughout these trying times, it was business as usual for us. We continued with our weekly press chats virtually. We had online book launches, signing of agreements, even Christmas parties. We were not able to hold physical exhibits, so we built microsites instead and took advantage of our projection mapping facility. We also boosted our presence on social media,” said Diokno, addressing BSP employees, also known as “BSP-ers”.
Diokno said he expects the BSP to remain sensitive to the needs of Filipinos by providing financial relief, incentivizing lending, and facilitating access to more financial services.