Bangko Sentral ng Pilipinas

Diokno’s back, but Bangko Sentral ‘not sure’ if Ralph Recto will sit in its powerful Monetary Board

Lance Spencer Yu

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Diokno’s back, but Bangko Sentral ‘not sure’ if Ralph Recto will sit in its powerful Monetary Board

Marian Hukon/Rappler

'There’s an appointed secretary of finance but me personally, I’m not sure if the secretary of finance will sit as a member of the Monetary Board,' says BSP Deputy Governor Eduardo Bobier

It’s a “return to his natural habitat” for Benjamin Diokno as the former finance secretary and central bank governor comes back to the Bangko Sentral ng Pilipinas (BSP).

With his appointment as the latest Monetary Board member effective January 15, the BSP said that Diokno finally “completes” the 7-member Monetary Board (MB).

But even with Diokno’s return, there are so far only six MB members who have been explicitly named – and newly-appointed Finance Secretary Ralph Recto isn’t one of them.

Does that mean the BSP has chosen not to have the head of the Department of Finance on board?

Officials from the BSP responded in cautious tones.

“Just to be clear, ‘yung provision kasi, ang sinasabi (the provision says), representative from the government,” said Deputy Governor of the Corporate Services Sector Eduardo Bobier.

According to the New Central Bank Act, the MB must be composed of the BSP governor, who will serve as chairperson; five members of the private sector; and a member of the Cabinet designated by the President.

“For now, there’s an appointed secretary of finance but me personally, I’m not sure if the secretary of finance will sit as a member of the Monetary Board because the provision says representative from the government,” Bobier said during a media information session on Friday, January 19.

Currently, the BSP publicly lists the names of six members of the Monetary Board: BSP Governor Eli Remolona Jr., former finance secretary Benjamin Diokno, Bruce Tolentino, Anita Aquino, Romeo Bernardo, and former treasurer of the Philippines Rosalina de Leon.

In its press release announcing Diokno’s appointment to the MB, the BSP merely listed the seventh member of the board as “a member of the Cabinet designated by the President” without mentioning any name.

The government representative chosen to sit on the MB is usually the secretary of finance. For instance, former finance secretaries Carlos Dominguez III and Cesar Purisima both served as members of the Monetary Board. But this isn’t a hard and fast rule.

“Just to cite past experience, there were times when the government representative in the board was the NEDA secretary. Meron din time na (There was also a time when) DTI was representing,” said Deputy Governor of the Monetary and Economics Sector Francisco Dakila Jr.

Dakila may have been referring to Cayetano Paderanga Jr., the former secretary of the National Economic and Development Authority (NEDA), who also sat as an ex officio member of the central bank’s MB from 1990 to 1992.

Whoever is chosen to sit at the Monetary Board will take part in steering the country’s monetary policy and supervising its financial institutions. Part of the board’s responsibility is also limiting inflation, which it controls by raising, lowering, or maintaining its key policy rate. (READ: What Bangko Sentral’s interest rate hike means for consumers and the economy)

Until an official announcement is made, the identity of the government representative sitting at the MB remains unknown. But if it won’t be Recto, who could it be? – Rappler.com

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Lance Spencer Yu

Lance Spencer Yu is a multimedia reporter who covers the transportation, tourism, infrastructure, finance, agriculture, and corporate sectors, as well as macroeconomic issues.