Espenilla completes BSP reorganization
Ten months into the job and Bangko Sentral ng Pilipinas (BSP) Governor Nestor A. Espenilla Jr. has reorganized the independent financial institution in a major way.
The reorganization was formally announced Friday and it involved the creation of one more BSP sector or from three to four sectors, and the transfer of a lot of officials and personnel around the BSP, in the hope that the change in each sectors’ focus will improve its ability to perform its mandate of ensuring financial and monetary stability amidst an “ever-shifting economic landscape.”
“The reorganization will also result in reinforced units that promote effective risk management and compliance as well as internal audit,” the BSP said, explaining the move. “It will institutionalize the top level commitments to pro-active systemic risk management and to a more inclusive and responsive financial system.”
There are now four major sectors despite that BSP only has three deputy governors under the New Central Bank Act (Republic Act 7653). Three of the sectors are headed by deputy governors and one sector – which had been beset by controversies years ago – continue to be handled by an assistant governor.
BSP Deputy Governor Diwa C. Guinigundo’s Monetary Stability Sector or MSS is now renamed Monetary and Economics Sector or MES, in-charge of monetary policy formulation, implementation, and assessment. The MSS used to include most of the functions of the Currency Management Sector or CMS -- now one of the major four sectors -and the Cash Department, the Currency Issue and Integrity Office, as well as the BSP Regional Offices and Branches. When CMS was under the MSS, it was a sub-sector.
In a statement, the central bank said: (The
MES) will be composed mostly of units that were formerly part of the MSS, specifically the departments and offices for economic research and statistics, monetary and financial policy, international operations and relations, and loans and credit.”
What is new is that Guinigundo will now handle the BSP’s Treasury Department which used to be under the Office of the Governor during the time of Amando M. Tetangco Jr. MES will still have Payments and Settlements Office, and Investor Relations Office. Compared to other sectors’ organizational chart, the MES has the slimmest number of departments and offices.
Espenilla’s former sector, the Supervision and Examination Sector or SES is now the Financial Supervision Sector or FSS, headed by Deputy Governor Chuchi S. Fonacier who was appointed to her position in July last year when Espenilla became BSP chief.
As with SES, the FSS will regulate banks and other BSP-supervised financial institutions, and will have oversight functions on financial technology, payment systems, and consumer protection. This sector directly handles anti-money laundering matters.
BSP Deputy Governor Maria Almasara Cyd N. Tuano-Amador, who heads the Resource Management Sector or RMS pre-reorganization, is now in-charge of the Corporate Services Sector or CSS for the “effective management of corporate strategy, communications, and risks, as well as the BSP’s human, financial, technological and physical resources to support the BSP’s core functions.” In past years, the RMS oversees the Security Plant Complex (SPC).
The newly-created CMS will be headed by the current SPC head, Assistant Governor Dahlia D. Luna in an acting capacity.
The CMS, like when it was still part of MSS, will be responsible for the “forecasting, production, distribution and retirement of Philippine currency.” Since it will also take charge of the SPC, it will be on top of banknotes, coins and securities production, mint refining, as well as the currency production support activities. It will also take over the departments and offices of the MSS such as the Cash Department, the Currency Issue and Integrity Office, and BSP Regional Offices and Branches.
In 2010, the head of the SPC resigned, around the time when there was speculation about the central bank’s outsourcing of banknotes which were rejected due to errors or low standards.
Whoever heads the SPC assumes a deputy governor position but this will only be formalized when the proposed amendments to the BSP charter is finally approved.
One of the charter proposal was to expand the list of deputy governors from three to five. Increasing this authority would give BSP more leadership and improve the effectiveness of its mandate to ensure effective monetary control.
Other proposed amendments to its charter include the increase in capitalization from P50 billion to P200 billion; the setting up of a formal arrangement on the sharing of gains and losses between the National Government and the BSP; the restoration of the BSP’s ability to issue its own debt securities to enable it to siphon excess money supply from circulation; the setting up of reserves to absorb losses from foreign exchange fluctuations; and the granting of tax exemption.