By Business World, March 5 2019

Image Credit to Philippine Star

PRESIDENT Rodrigo R. Duterte has chosen Budget Secretary Benjamin E. Diokno to replace the late Bangko Sentral ng Pilipinas (BSP) Governor Nestor A. Espenilla, Jr., who died of cancer last Feb. 23, top administration officials announced on Monday night.

“The Palace wishes to inform [the public on] the appointment of Department of Budget and Management Secretary Benjamin Diokno as the new Governor of Bangko Sentral ng Pilipinas, succeeding the late Governor Nestor Espenilla, Jr.,” Salvador S. Panelo, chief presidential legal counsel and presidential spokesperson, said in a statement e-mailed to reporters, adding that Mr. Duterte “made this announcement at the start of the 35th Cabinet Meeting on Monday, March 4.”

Executive Secretary Salvador C. Medialdea earlier in the evening confirmed the information in a mobile phone message, while Finance Sec. Carlos G. Dominguez III told reporters via Viber message: “Dr. Benjamin E. Diokno brings together that elusive combination of seasoned technocrat and professional manager.”

“He knows the inner workings of government and industry, and has repeatedly demonstrated the ability to run a large, complex organization with intellectual leadership and a steady hand. All of these will contribute to his successful stewardship of the Bangko Sentral ng Pilipinas as its next governor and chairman of the Monetary Board,” Mr. Dominguez said.

“His competence is unquestionable, owing to his deep expertise in macroeconomics and extensive senior management experience in government and the private sector.”

Mr. Dominguez said Janet B. Abuel, Budget undersecretary in charge of the Local Government and Regional Operations Group, will serve as the Budget department’s officer-in-charge.

Mr. Diokno — who also served as Budget chief under former president-now-Manila Mayor Joseph E. Estrada from 1998 to 2001 and was undersecretary at the same department in 1986-1991 under the late former president Corazon C. Aquino — will serve the remainder of Mr. Espenilla’s six-year term that was to end in July 2023.

Mr. Diokno had been instrumental in making the government spend closer to program last year — through regular meetings with chiefs of line departments that have had a poor disbursement track record — in a bid to spur overall economic growth to 7-8% annually until 2022, when Mr. Duterte ends his six-year term, from 6.3% in 2010-2016 under former president Benigno S.C. Aquino III.

In the process of reforming the national budget to take into consideration the historical spending capacities of state departments, agencies and offices, however — resulting in a slightly smaller proposed P3.757-trillion general appropriations act for 2019 — he ran into opposition at the House of Representatives, whose leaders bared alleged irregularities in the Executive branch’s submitted spending plan.

Consequently, the 2019 national budget failed to be enacted by end-2018, resulting in a reenacted spending plan that left new projects unfunded.

This year’s budget still awaits Mr. Duterte’s signature.

That delay, plus a 45-day ban on public works ahead of the May 13 midterm elections and a brewing El Niño episode that will hit farm production has cast a pall over the country’s economic growth prospects this year.

Mr. Diokno is professor emeritus at the University of the Philippines-Diliman and holds a Bachelor’s Degree in Public Administration (1968) and Masters’ Degrees in Public Administration (1970) and Economics (1974) from the same university. He also earned a Master of Arts in Political Economy (1976) from the Johns Hopkins University, USA and a Ph.D. in Economics (1981) from the Maxwell School of Citizenship and Public Affairs, Syracuse University, USA.

“In his new tour of duty in the BSP, we expect incoming Governor Diokno to spearhead reform initiatives that will align the financial institution’s operations with international best practices and improve its corporate viability, among others, in line with Republic Act No. 11211, which was signed into law by President Duterte just last February 14,” Mr. Panelo said in his statement, referring to The New Central Bank Act that fortifies the central monetary authority.

“With him at the helm of the Bangko Sentral ng Pilipinas, our banking institutions are in good and competent hands.” — with inputs from ALBKANV and MLTL