Bankers, solon upbeat as Remolona takes BSP helm

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THE Bankers Association of the Philippines (BAP) has expressed confidence that the international experience of the incoming Bangko Sentral ng Pilipinas (BSP) Governor will boost competitiveness of the local banking industry.

Last Friday, the President appointed Monetary Board member Eli Remolona as the new BSP governor. He was selected for “his extensive experience and remarkable achievements in central banking, economic policy, international finance, and financial markets.” (Full story here: https://businessmirror.com.ph/2023/06/23/pbbm-names-new-bsp-governor/)

The BAP welcomed the appointment of Remolona and said it looked forward to working with him on various initiatives such as market development, cybersecurity, and sustainability.

“With his extensive global experience and expertise in financial markets and regulations, we are confident that Dr. Remolona will anchor the Philippine industry not only towards continuous stability of the financial system, but also to growth and competitiveness in the regional stage,” Jose Teodoro K. Limcaoco, President of BAP, said.

With the appointment of a new central bank chief, a leader of the House of Representatives expects policy continuity from the highly successful balancing act of  Bangko Sentral ng Pilipinas (BSP) Governor Felipe Medalla to protect the peso without exhausting the country’s gross international reserves.

House Committee on Ways and Means Chairman Joey Sarte Salceda of Albay congratulated Monetary Board member Eli Remolona for his appointment as Governor of the BSP once Medalla’s term expires this July 2.

“I congratulate Dr. Eli Remolona for his appointment as Governor of the BSP. Dr. Remolona has formidable experience in modern central banking, from his stint in the Bank of International Settlements and from the Federal Reserve Bank of New York. His appointment was widely expected by many in the banking and finance sectors, and is welcome news,” Salceda said.

Salceda added that the appointment of Remolona should also signal the country’s keenness on certain recent developments in central banking, such as digital central bank currencies and de-dollarization. 

“He is the best person for these areas of development,” said Salceda.

According to Salceda, Remolona was also involved in regulatory reform for much of his career, which signals a BSP that will likely continue to err on the side of caution when it comes to dealing with the banking sector.

“The market will most likely test the new Governor’s policy direction and will once he takes over on July 2. I also expect policy continuity from the highly successful balancing act of Governor Medalla to protect the peso without exhausting our gross international reserves,” he said.

BAP hails Medalla

The BAP, meanwhile, saluted outgoing BSP Governor Felipe Medalla for his steadfast leadership of the financial industry and for laying the foundations to help Filipinos navigate and address their financial needs during
this time of global challenges and uncertainties.  

“Dr. Medalla is notably a pillar of a strong and resilient Philippine banking system not only for his term as BSP Governor, but also for his 12 years of service in the Monetary Board. The BAP wishes him the very best in his future endeavors,” Limcaoco added.

Remolona has extensive international experience in central banking, having worked for 14 years at the Federal Reserve Bank of New York, and for 19 years at the Bank for International Settlements in Switzerland and Hong Kong.

Remolona, who joined the central bank’s policy making Monetary Board in August 2022, will be the seventh BSP Governor since the enactment of the New Central Bank Act in 1993.

Before moving to the BSP, Remolona served as an independent director of the Bank of the Philippine Islands and chairman of its risk management committee.

He was also a finance professor and director of central banking at the Asia School of Business in Kuala Lumpur, Malaysia, a collaboration with the Massachusetts Institute of Technology Sloan School of Management.

He taught at Williams College, Columbia University, and New York University in the United States, as well as at the University of the Philippines. He holds a Ph.D. in Economics from Stanford University. A product of public schools, he graduated valedictorian from V. Mapa High School.

“As a side note, the BSP governorship returns to Ateneo with Dr. Remolona’s appointment. The last instance that was the case, we had Dr. Amando Tetangco, who is widely regarded as the best central banker in Asia during his time,” Salceda noted.

Salceda, however, reiterated that “there are challenges for Dr. Remolona to address the moment he takes over.”

“The global market remains disrupted although some equilibriums are being created in key commodities, so it’s helping ease inflation. There are also jitters about the health of US financial markets,” he said.

“Dr. Remolona will have the very difficult task of protecting the country from external shocks and higher prices while providing enough policy space for growth. Dr. Medalla walked that tightrope skillfully. I am optimistic Dr. Remolona will also do so,” he said.