Moving mountains, ‘continuity plus’

July 3 — Changing of the guards at the Bangko Sentral ng Pilipinas. At the Bankers Association of the Philippines cocktails, someone remarked that multi-awarded BSP Governor Amando “Say” M. Tetangco, Jr.’s shoes are too big to fill. Then incoming Governor Nestor “Nesting” A. Espenilla, Jr. agreed and said, thus the shoe pattern will likely change. He confirmed continuity and more, so it’s “Continuity Plus Plus.”

At the Bankers Institute of the Philippines (BAIPHIL) induction with the theme “Scaling New Heights in Banking Excellence” of incoming President Philippine Deposit Insurance Corp. Vice-President Irene Arroyo, the special guest was Gov. Nesting. He used Mt. Everest in an analogy to illustrate the ultimate goal of hard core mountain climbers: the heights of height. The difference, he says, is that in banking, there is no final peak to overcome. Yes, Mount Everest is formidable, but it is not moving. Unlike in banking where he says “the process of scaling new heights is an active and continuing endeavor.”

In scaling any mountain, Gov. Nesting, who climbed Mt. Fuji as a millennial graduate student in 1988, says the following are required:

• Intense training and preparation — He said, in mountain climbing, each team member has to be skilled, fit, prepared physically and mentally. This takes years of conditioning if one is to take on the tasks involved. Banking products, financial services and needs, technology and consumer preferences are always levelling up. We have to keep pace. We do this with training and education, updated and relevant regulations.

• Environmental sensitivity — The climber needs to be aware of surroundings and changes in the weather. Gov. Nesting says that the Philippine economy remains in a position of strength. It continues to expand, despite challenges in the external environment. Growing regional financial integration and the entry of foreign banks, competition pressures have increased. New sophisticated players such as financial technology solution providers have entered the market. While fintech provides interconnectivity, convenience and efficiency in delivery of financial products and services, one must exercise vigilance as it also ushers in cyber-security concerns. In this regard, the BSP has been laying the groundwork on promoting cyber-security and related regulation on technology.

• Well-maintained equipment and gear — As the central monetary authority, Gov. Nesting said the BSP has a well-articulated policy framework and an enhanced policy tool kit. Like good and ready climbers, “our gear is ready and we have improved surveillance methods.”

He said, “assessing the mountain, we are thoughtful about weather shifts. For instance, the increasingly clear signal for policy normalization in western economies points to a rise in global interest rates, just a question of timing and pace.”

BSP’s approach is preemptive to mitigate any undue risk buildup in the financial system. It also built up solid macroeconomic fundamentals that serve as buffers to weather potential external shocks. BSP continues to refine existing early warning systems, distress indices and stress tests. BSP is constantly developing financial and economic models that improve the understanding of how relevant variables move.

• Trusted and dedicated team — Gov. Nesting said that much like facing challenges in the banking industry, to be successful in mountain climbing, one cannot go up alone. Climbers must learn the basics from other climbers, as well as help each other up from time to time.

This means, he said, “close collaborations and relationships” and communication. Gov. Nesting says he’s fortunate to inherit a very capable and competent BSP team. He said, “we can also depend on the collaboration and synergies among valued stakeholders like BAIPHIL. Indeed, we cannot do it alone.”

• Competent leadership — Possessing close familiarity with “the mountain and mountains” of banking, we could consider the BSP and BAIPHIL as the industry’s “sherpas”. BSP provides guidance and direction towards the shared vision of upholding a stable and inclusive banking system. Together, Mr. Espenilla said, “we have to prepare the banking community by anticipating harder but more fulfilling climbs ahead. Through continuous training and education, the banking profession will be better equipped and prepared to keep pace.”

• Tenacity and courage to keep going amidst challenges — Gov. Nesting says the BSP is always motivated to raise the bar of professional excellence and business integrity for banks. BSP has the determination and passion to excel in its current craft, of pursuing excellence and constantly improving their work so that they could deliver the best financial services to the Filipino consumer and our country.

Gov. Nesting wishes for others to experience climbing mountains, as one’s view is wider and sees the bigger picture clearly. And as the Philippines progresses, his goal is for more people to be included in the financial system for a truly meaningful economic growth.

Former Monetary Board Secretary Fe Barin said Gov. Nesting comes “highly qualified, an insider, a quiet thinker with substance.” United Coconut Planters Bank President Joey Macadaeg, his schoolmate, sums up the consensus that “Nesting’s appointment is a welcome development because it signals both continuity and further improvements when it comes to monetary and banking policies.”

Gov. Nesting, God speed!

Flor G. Tarriela is chairman of PNB and a director of FINEX. She was formerly undersecretary of Finance, the first Filipina vice president of Citibank N.A. and past president of BAIPHIL.