Philippines chooses Espenilla as next cenbank governor

[May 08, 2017]  By Karen Lema

MANILA (Reuters) - The Philippines has chosen Nestor Espenilla to be its next central bank governor for a six-year term, two Cabinet ministers said on Monday, ending months of speculation about what could be President Rodrigo Duterte's most important appointment.

Espenilla will replace Amando Tetangco, the widely respected career central banker, who will step down in July after serving the maximum two six-year terms allowed under the law.

The appointment was confirmed in text messages sent to Reuters by Finance Secretary Carlos Dominguez and economic planning secretary, Ernesto Pernia.

Espenilla, 58, is currently deputy governor in charge of banking supervision.

The choice of a Bangko Sentral ng Pilipinas governor had been regarded as the most crucial economic appointment Duterte will make during his six-year term.

Dominguez described Espenilla's appointment as a "very wise choice after a thorough evaluation of the future needs of the country."

He praised Tetangco and said he had "carefully trained his potential successors".

The selection of Espenilla suggests a smooth transition and continuity in monetary policy and reforms that kept the banking industry sound, the peso stable, inflation stable and sustained the country's strong economic growth.

Deputy Central bank Governor Nestor Espenilla is pictured during a meeting at the Bangko Sentral ng Pilipinas complex in Manila, Philippines March 31, 2017. REUTERS/Karen Lema

Espenilla, headed a shortlist of candidates that also included fellow deputy governor Diwa Guinigundo, East West Banking Corp <EW.PS> chief executive Antonio Moncupa and former monetary board member and ex-trade minister Peter Favila.

The Philippine economy has long left behind its reputation as a regional laggard. In 2016, it reported annual GDP growth of 6.9 percent, among the fastest in Asia. This year growth is expected to be in the midpoint of the government's 6.5-7.5 percent target.

As deputy governor in charge of banking supervision, Espenilla has driven many of the central bank's recent reforms, including raising minimum capital requirements, improving financial transparency, and overhauling mismanaged banks.

(Additional reporting by Neil Jerome Morales; Editing by Martin Petty & Simon Cameron-Moore)

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