Since taking up office as the fourth Governor of the Bangko Sentral ng Pilipinas (BSP) on July 3 last year, Nestor A. Espenilla, Jr. has been kept busy by the times. With the central bank delivering on the recent news of its fourth interest rate hike this year to rein in the country’s soaring inflation rates, the challenges currently facing Mr. Espenilla are numerous and significant.

The responsibilities that come with the role of BSP governor include serving as the chairman of the Monetary Board, the central bank’s principal policy-setting policy, as well as concurrently serving as chairman of the Anti-Money Laundering Council and the Financial Stability Coordination Council. Prior to his appointment as governor, Mr. Espenilla cut his teeth bearing the duties of deputy governor in-charge of the Supervision and Examination Sector (SES), which regulates and supervises banks and non-bank financial institutions under BSP jurisdiction. In that capacity, he focused on banking supervision, capital market development, credit policy, and financial inclusion.

According to the BSP’s own profile of him, Mr. Espenilla “institutionalized risk-based and proportionate regulations, enabling BSP-supervised institutions to innovate business models and adopt digital financial services. He likewise championed the issuance of regulations that promote financial inclusion and consumer protection. He is a staunch advocate of an efficient, interoperable, and consumer-friendly digital payments system.”

This is not surprising for those who know him, as such accomplishments come from a history of personal successes: from graduating magna cum laude with a bachelor’s degree in business economics from the University of the Philippines (UP), to his graduate degrees from UP and the Graduate Institute of Policy Science in Tokyo, Japan. Starting as an external debt analyst at the BSP in 1981, Mr. Espenilla steadily worked his way up through the ranks, finding a successful career under the institution through grit and perseverance.

Amando M. Tetangco, Jr., the third governor of the BSP and Mr. Espenilla’s predecessor, was quoted as saying in a text message to reporters, “DG Espenilla is well respected in the banking community and highly regarded by other central banks and financial regulators both here and abroad. He is also well supported by the BSP family. I am confident that with him at the helm, the BSP will continue to be a pillar of support to the economy, that should remain among the top performing economies in the world.”

Mr. Espenilla, in a speech made to students at the launch of the UP BGC Graduate Business Program, said that his ‘sticktoitiveness’, his quality of finding the determination to overcome obstacles, has made all the difference in his career.

“There are good days and there are bad days. While we are presumably talented and intelligent uniformly each day (at least we hope to be!) — the feeling of wanting to persevere and stay on, changes. It changes with our moods and is affected by situations and circumstances. This is why sticktoitiveness, commitment, is the true formula for success,” he said.

“In the central bank, grit is always required. Grit is what brings about constancy, continuity, credibility and stability to the financial system.
Grit translates to us preparing well, committing to the implementation
of difficult but necessary and bold reforms. Grit is synonymous to the
perseverance needed to cushion the economy from any volatility.”

“When I first joined the Central Bank in 1981, I was idealistic. My grit was tested all at once! During the turbulent 80’s, there was political unrest. A debt crisis was unfolding and it forced the country to declare a moratorium on the payment of its foreign debt by 1983. Dollars had to be rationed. Central Bank interest rates shot up to around 40% per annum. Compare that to 3% today. The economy was in recession. In 1986, Senator Benigno Aquino, Jr. was assassinated. What a challenging time for the central bank and a young central banker like me! I certainly had days when I wondered if I should continue. I am glad I did,” he said.

As challenges like the rising prices of commodities and the weakening peso threaten to derail the growth and development of the Philippine economy, in addition to personal struggles like his bout with tongue cancer, Mr. Espenilla might be facing his biggest obstacles yet.

Shortly after he took office, Mr. Espenilla proposed a number of changes so that the central bank would continue to become more responsive to the needs of the domestic economy, including the movement toward a more market-based execution of monetary policy; constant review of existing tools and policies to make the monetary system more efficient and market-oriented; pursuit of capital market reforms to provide a viable alternative source of financing for long-term investments; and liberalization of the provision of financial products and services to achieve more risk-based, transparent and market-determined policy framework. Whether such measures would ultimately achieve the goals he set out for them, only time will tell.

“In the central bank, grit is always required. Grit is what brings about constancy, continuity, credibility and stability to the financial system,” Mr. Espenilla said. “Grit translates to us preparing well, committing to the implementation of difficult but necessary and bold reforms. Grit is synonymous to the perseverance needed to cushion the economy from any volatility.”

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