These are probably the two most important words to investors and everyone else concerned with economic growth and progress: stability and continuity.
In general, investors look for markets that can offer, among others, a predictable environment for business and trade. Investors are allergic to political, economic and social instabilities that interfere with continued, undisturbed business operations such as armed conflicts, disturbance in peace and order, war, and similar social turmoils. It is for this reason, I believe, that the economy continues to grow under President Rodrigo Duterte. His focus on peace and order, and security has generally been viewed positively by the business community.
Another important indicator of stability is the continuity of economic and business policies under a familiar set of policymakers and government officials. The business community generally frowns upon abrupt changes in policies and sudden replacements of the country’s economic managers. This is why I applaud the recent decision of the President to appoint Mr. Nestor Espenilla, Jr. as governor of the Banko Sentral ng Pilipinas (BSP), replacing the widely respected Mr. Armando Tetangco, who will step down in July after serving the maximum two six-year terms allowed under the law creating the BSP.
This decision of the President ensures continuity and stability not only in the performance of the BSP but also in the overall monetary and economic policy of the country. Mr. Tetangco has praised the President for this decision. In a statement reported by the Manila Bulletin, he said that “the choice of an insider…ensures the continuity of policy and thought process in the BSP. He extolled Mr. Espenilla as a “well respected (official) in the banking community and highly regarded by other central banks and financial regulators both here and abroad.”
I join the chorus of commendation for this executive decision. The President’s decision strengthens the Philippines’ position as the fastest growing economy in Asia. The experience and familiarity of Mr. Espenilla with the job at hand will certainly help him in working to sustain, together with the other economic managers of the Duterte administration, the spectacular economic performance we are currently experiencing.
Let me also commend outgoing BSP Governor Tetangco for a job well done, which is a supreme understatement given his accomplishments. The Global Finance magazine has named him one of the top chiefs of central banks in the world seven times. Since his assumption to office in 2005, Tetangco has presided over the growth of the Philippine economy by reining in the volatility of the foreign exchange market and reacting with decisiveness whenever global events threaten to undermine that growth. He has held a steady watch on our economic stability. We thank him for his service to the country and wish him good luck in his next endeavor.
We likewise wish incoming Governor Espenilla the best of luck in continuing the work started by his predecessor and in ensuring a stable environment so that President Duterte’s economic policies realize its goal of giving all our people the progress they deserve. He is now part of the excellent economic management team of the Duterte administration that includes Finance Secretary Carlos Dominguez, Budget Sec. Benjamin Diokno, and NEDA Secretary Ernesto Pernia.
Secretary Dominguez has correctly described Espenilla’s appointment as a “very wise choice.” I must add here that Espenilla completes an excellent team of economic managers who will help the President implement “Dutertenomics” — his blueprint for a more prosperous and peaceful Philippines.
From the tax reform package to the ambitious infrastructure program under the slogan, “build, build, build,” I am confident that his economic management team helps us “build a dynamic and inclusive economy.” I fully agree with what Secretary Dominguez said in a speech last month: “All the favorable factors are present. It is time now for a breakout.” Indeed, after decades of boom-bust economic performance, our time is now.