by Atty. Ignacio R. Bunye
The President has his State of the Nation Address (SONA). Local governments have their own equivalents: SOPA for provinces, SOCA for cities and SOMA for municipalities.
The SONA is delivered every third Monday of July. Those for local governments usually coincide with the LGU’s founding day.
The Governor of the Bangko Sentral ng Pilipinas (BSP) has his own version, the State of Banking Address (SOBA). It is delivered every January. But unlike above-mentioned policy speeches, the SOBA is delivered in two “installments” and before two different audiences.
For the last 20 years, it has been the tradition of all BSP governors (since Governor Gabriel Singson) to speak before the 1st General Assembly of the Rotary Club of Manila. This usually happens on the very first week of the year.
And on the third week, the BSP governor speaks before representatives of the banking and financial community. The latter speech isusually followed by a New Year’s toast, led by the Governor (who is also the Chair of the Monetary Board) and all the members of the Monetary Board.
Good weather permitting, the speech before the captains of the banking and financial industry is held in open air in the historic Fort Antonio Abad within the BSP complex.
The Rotary speech (attended by the members of the the Rotary Club of Manila, Rotary Club of Makati West and Rotary Club of Forbes Park) went on as scheduled last January 4. The speech before the banking sector was scheduled last Friday evening.
It was the first SOBA for BSP Governor Nestor A. Espenilla, Jr., who succeeded Governor Amando M. Tetangco, Jr. last July.
Before the Rotary Club of Manila (headed by my Aquila Legis brod Jimmie Policarpio), Espenilla framed his talk around BSP’s mandates, and what the BSP regards as its pillars of central banking.
He then focused on “the Philippine economic outlook given factors in the immediate past, work we are doing in the present, and plans to face challenges of the future.”
Espenilla talked on (1) recent developments in the global economic environment (2) BSP’s delivery on its mandate of maintaining price stability; and (3) the challenge of digitization and how our payments and settlements system plays a role; and (4) finally, the BSP’s mindset for embracing the future.
2017 saw increased momentum in global economic growth, Espenilla said, triggering, among others, movement of funds from emerging markets like the Philippines.
Espenilla described how the peso weakened and how the BSP responded with a flexible exchange rate policy and by providing foreign currency liquidity.
Over-all, Espenilla said, the BSP succeeded in maintaining a sound and liquid financial system which provided support to Philippine economic activity in 2017.
“Banks’ balance sheets expanded with a double-digit growth in assets and deposits.
“Credit continued to flow steadily to productive sectors.”
One of the many reasons for another credit upgrade by Fitch last December.
For 2018, Espenilla talked of a well-calibrated and carefully sequenced series of reforms which include, among others:
- developing deeper and more efficient domestic capital and money markets over the medium term complementary foreign exchange reforms
- close monitoring of excessive credit and leverage
- continuous development of the country’s backbone for payments and settlements
- leveraging digital innovation to reach the financially unserved and underserved, and
- further enhancing a responsive security management framework to help guard our financial system against cyber-threats.
It is an interesting read (or ‘hear’ if you will) considering the very important role played by the Bangko Sentral which affects the lives of every Juan and Maria.
For those interested, a full text of this and other policy speeches are downloadable from the BSP’s website: http://www.bsp.gov.ph/publications/speeches.asp.
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