Espenilla, Philippine Central Bank Chief, Dies at 60

(Bloomberg) -- The governor of the Philippine central bank, Nestor Espenilla, died Saturday after a battle with cancer, Bangko Sentral ng Pilipinas said. He was 60.

Espenilla, known as “Nesting” by friends and colleagues, disclosed his medical condition in February 2018 as he recovered from surgery and radiation therapy for tongue cancer. At the time he was on a pilgrimage to Jerusalem with his wife and friends, and told reporters in a lengthy text message that his doctors had told him he was cancer-free.

The cancer returned, however, and Espenilla had taken intermittent medical leave since September in addition to an overseas trip for treatment in January.

The Monetary Board has designated Deputy Governor Cyd Tuano-Amador as the central bank’s officer-in-charge effective immediately until President Rodrigo Duterte appoints a successor, the bank said in a statement Sunday. Analysts say although the monetary authority has a clear policy direction over the medium term, it’s imperative that a new governor be named soon.

“Investors and the markets shouldn’t be distracted by this unfortunate event and price in more risk,” given the central bank has provided stability while Espenilla was away for treatment, said Manny Cruz, head of research at Papa Securities Corp. in Manila. It is “critical” for the government “to pick someone who will continue the central bank’s track record of independence and role as a provider of financial stability,” Cruz said.

Espenilla, Philippine Central Bank Chief, Dies at 60

Espenilla was a three-decade veteran of the central bank when he took office in July 2017. During his first year as governor, he faced mounting pressure as inflation soared and the peso slumped. He cut banks’ reserve-requirement ratio by 2 percentage points to 18 percent last year as part of a medium-term plan to bring it to single-digit levels.

After initially facing criticism for being slow to act to rein in price growth, he delivered five successive interest-rate increases between May and November 2018, making Bangko Sentral one of the most aggressive central banks in Asia last year. The peso went from one of the worst-performing currencies in the region in the first half to rebound as its second best in the following six months.

Inflation cooled for a third month in January, after climbing to a nine-year high in September and October. The peso has strengthened a further 1 percent against the dollar this year.

Trusted Instincts

“I respond to moments and situations,” Espenilla said in an interview in June 2017, revealing that he was a fan of Malcolm Gladwell’s book Blink. “I trust my instincts.” Gladwell argued that split-second decisions in complex situations can be as good as, or even better, than ones made under careful thought.

The only boy among five children, Espenilla joined the central bank as a debt analyst in 1981 after graduating magna cum laude in economics from the University of the Philippines. He juggled law school while working, but knew after a year that he had to choose one path for his career. At that time, he was considered talented enough to join then-Governor Jaime Laya on foreign trips, and said that made the choice easy for him.

At the central bank, Espenilla had a number of roles -- from advising the International Monetary Fund to investigating the nation’s biggest financial scams. He also crunched numbers and wrote speeches for governors, including his predecessor Amando Tetangco. He worked his way up to become one of three deputy governors in 2005 and head of the bank supervision division.

Espenilla was a champion of so-called financial inclusion programs, such as the use of electronic wallets and better credit access for farmers and rural entrepreneurs. He sought to strengthen the capital market and cut the cost of doing business. Some of the initiatives included establishing a bond repurchase market, loosening foreign-exchange rules, and financial technology innovations.

Strict Father

“During his tenure, the amendments to the BSP charter were finally passed, strengthening the capability of the central bank to deliver its mandate to promote price and financial stability and to foster a safe, efficient and inclusive payment system,” the bank said in a statement.

As a father, Espenilla was strict but gave his children enough freedom to pursue their passion, his son, Nikko, said in a 2017 interview. Espenilla is survived by his wife Tess, their daughter, two sons and a grandchild.

“If you treat people like they can’t be trusted, they won’t be mindful of their responsibilities,” Espenilla said in a previous interview.

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