Amando Tetangco: Of central banking, art and legacies
Speech by Mr Amando M Tetangco, Jr, Governor of Bangko Sentral ng Pilipinas (BSP, the
central bank of the Philippines), at the launching of the books "Philippine Central Banking: A
Strategic Journey to Stability" and "Likha: Enduring Legacies of Filipino Artistry", The Decorative
Arts Collection of the Bangko Sentral ng Pilipinas, Manila, 25 May 2017.
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The Members of the Monetary Board of the BSP thank all of you for accepting our invitation to
the launching of two important books.
The first book "Likha: Enduring Legacies of Filipino Artistry" celebrates our heritage by
showcasing the decorative arts collection of the Bangko Sentral ng Pilipinas which includes
artifacts from 2000 years ago.
Both functional and aesthetically pleasing, the decorative art pieces include intriguing
preHispanic pottery, finely crafted Hispanic gold, expressive religious art, exquisite embroidery and
cleverly designed furniture. They provide insights into our evolution as a nation and instills a
strong sense of identity as a people. These enduring works of art are testaments to the artistry,
creativity, adaptability, strength, competitiveness and tenacity of our people. They make us
proud to be Filipinos.
This is important. In this time of globalization, it is important that we do not lose sight of who we
are as a people, what we have achieved and what we can achieve.
The second book "Philippine Central Banking: A Strategic Journey to Stability" looks at the core
aspects of central banking from the point of view of professional central bankers with broad and
deep experience in the science and the art of central banking.
The two books represent very different disciplines. If you look around this hall therefore, you will
see that aside from bankers, there are quite a number of individuals from diverse fields.
Many would probably think that central banking and the arts share little in common. To us,
however, both are linked by their capacity to reflect the story of our past. This is important.
At the BSP, we believe that history must inform our country's journey; we must learn from the
past so that we will be better and stronger for the future.
For this reason, the BSP has a continuing program to share information, document its learnings
and promote appreciation of our country's rich culture and history across the country.
Thus, these two books are the latest in a series of publications under the Bangko Sentral ng
Pilipinas.
On central banking, our earlier books include "Money and Banking in the Philippines-
Perspectives from the Bangko Sentral ng Pilipinas," the next was "The BSP and the Philippine
Economy" followed by Central Banking in Challenging Times. We have also published
annotated books on "The New Central Bank Act," "The General Banking Act" and the "Special
Banking Laws."
This latest book on central banking compiles in one volume the challenges we faced over the
past decade and how we managed the evolving conditions, all for the singular purpose of
coming out better than before. The charts and tables provide us a succinct view of the myriad of
details before us but it is the accompanying narrative from our subject matter experts that allow
readers a front row view of our operations and our resulting track record.
Central Banking in Perspective
Perhaps more than most, central bankers appreciate the dynamics that is inherent with time.
After all, the decisions we take with respect to monetary policy will take several quarters to fully
take effect. Thus, our actions today are based on the evidence over the recent past, but our
policy stance is always directed towards the future.
On the part of banking policy, we craft regulations and guidelines to influence prudent behavior
within an enabling environment. The actual impact of this regulatory framework will also take
time to develop, both on the operating condition of banks and on the well-being of financial
consumers.
In other words, ladies and gentlemen, this book reflects the outcome of the interaction of the
central bank with the banking industry and other sectors of the economy. Simply put, this is our
story.
Our journey to stability has been challenging but with the support and collaboration of our key
stakeholders we continue to reap the benefits from our past actions and decisions that have
been strategic.
Thus, even as international crises afflicted the global economy and roiled markets with volatility,
the Philippine economy continued to grow as sound monetary and banking policies provided a
stable environment for our economy - we have low inflation, a sound and stable banking system
as well as a safe and reliable payments system.
We beefed up our macroeconomic analysis and surveillance tools, introduced crucial and timely
reforms such as the Interest Rate Corridor framework, and increased public engagement in our
policymaking process. At the same time, BSP and the banking industry continued to pursue a
broad reform agenda to strengthen their ranks in terms of capitalization, risk management, and
corporate governance. This successful collaborative strategy has given the banking system
sustained growth momentum.
Indeed, we have made great strides in various aspects of our operations. Ours is a narrative of
proactive management and reform to advance our vision for the country.
Moving Forward
With all that we have achieved so far, are we then set for the future?
Well, no environment is ever static. As the central monetary authority, our role is always
evolving. This is the de facto norm in central banking amidst the transformation of the global
environment, our country's objectives and its needs. This task is not straightforward, as it has to
contend with unexpected financial shocks, political upheavals, and natural calamities.
Nevertheless, amidst the tides of change, we will continue to remain focused on ensuring price
and financial stability in the country. We will find better ways to adapt the Flexible Inflation
Targeting framework to the lessons of the Global Financial Crisis - that price stability, on its
own, cannot guarantee overall financial stability. Thus, sustained monitoring and active
surveillance of monetary linkages will consider more granular relationships within the financial
market. This will allow us the added perspective of identifying pressures that may be quietly
building-up. New tools may be considered based on our very own experience to ensure the
delivery of the BSP's mandate.
This requires us to organize ourselves, strengthen our ranks, refine our tools and innovate in our
approach to ensure that we secure the interests of our stakeholders and keep pace with the
shifts in the environment. We will continue to be strategic in identifying a vision and setting down
a framework to achieve it.
In this connection, an S&P report on the banking system, dated May 14, 2017 makes us proud
of what the men and women of the BSP- past and present - have achieved. The report said:
"The central bank has a record of supporting sustainable economic growth and responding
appropriately to changing economic circumstances. Its ability to maintain macroeconomic and
price stability through an economic cycle has been tested, including a period of exogenous
shocks."
For this I thank and congratulate everyone under TEAM BSP!
The Journey Continues
Ladies and gentlemen, my term as Governor of the Bangko Sentral ng Pilipinas ends in July 2 or
38 days from today.
I take this opportunity therefore to thank all institutions, individuals, family and friends who have
contributed to our continuing success at the BSP. You all deserve a round of applause.
At the BSP, we move to great lengths to develop our people to be world class central bankers
through a continuous program of staff development, strategic training and effective succession.
Thus, we have developed in our midst a highly qualified successor - I refer of course to
Deputy Governor Nestor Espenilla, Jr., a career central banker for 36 years now, who will
assume the post of BSP Governor on July 3, 2017.
Nesting has described his term as "continuity plus, plus."
Indeed, we have a firm pipeline of policies and programs across the BSP that we have identified
as critical, moving forward. This includes further refinements of our Interest Rate Corridor, the
implementation of our National Retail Payment System, the continuing banking sector reform
agenda, and ASEAN integration.
We can therefore say that the BSP Journey to Stability continues.
Ladies and gentlemen. The Philippine economy is in the cusp of a demographic window of
opportunity, with our young population holding so much promise to reset and accelerate the
country's growth and development.
We sincerely hope therefore that our books - with their lessons of the past - will serve not
only inform but also inspire our readers, academics, and future generations of BSPers to do
their share in our continuing journey to stability.
Maraming pong salamat!
Mabuhay ang Bangko Sentral ng Pilipinas! Mabuhay ang ating mahal ng bansang Pilipinas!
Mabuhay po tayong lahat!