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Benjamin Diokno is the New BSP Governor

President Duterte made a surprise appointment of the former Budget Chief who’s facing corruption allegations.
IMAGE Department of Budget and Management
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The Bangko Sentral ng Pilipinas (BSP) has a new chief.

Moving from the Department of Budget (DBM), now-former Secretary Benjamin E. Diokno has assumed the top position at the Bangko Sentral ng Pilipinas (BSP) starting today, March 5.

Diokno replaced the late BSP Governor Nestor Espenilla, who died of tongue cancer on Feb. 23. He will serve the remaining years under President Duterte’s term until mid-2023.

This came as a surprise, especially to central bank watchers. Bloomberg reported that observers thought the potential successor of Espenilla were among the three deputy governors, the monetary board, or the private banking sector. 

But that doesn’t mean Diokno is not qualified for the job.

A seasoned budget professional, Diokno has served in the Department of Budget (DBM) under three Philippine administrations: as undersecretary during Corazon Aquino’s term, and as secretary during both Joseph Estrada’s and Rodrigo Duterte’s terms.

He is also a Professor Emeritus at the University of the Philippines School of Economics and has experience working as a consultant for other countries on budget matters.

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Riddled with corruption allegations

However, Diokno’s appointment as central bank chief has not been received very well since he was embroiled in corruption allegations late last year.

House of Representatives Appropriations Committee Chairman Rolando Andaya Jr. has accused him of anomalous “insertions” in the General Appropriations bill of 2019.

This has caused a delay in the passage of the budget, which was only approved by Congress in early February. The government has been functioning under the re-enacted budget in the meantime.

Andaya accused Diokno of corruption and called for an investigation into the alleged “insertion” of P75 billion in the proposed budget of the Department of Public Works and Highways (DPWH). He also alleged that the former budget chief even tried to bribe House representatives with P40 billion in government savings.

Diokno has denied the claims and has refused to attend congressional hearings after his first appearance. Andaya also didn’t pursue any of his threats to sue him before the Supreme Court.

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The Central Bank governor is the highest-paid government official in the Philippines. In 2017, the latest data available from the Commission on Audit, Espenilla received the highest salaries and allowances at P14.9 million--up 21.5 percent from P12.3 million the previous year. It was in 2017 when he was appointed to the post.

His predecessor Amando Tetangco Jr. was also named as the highest-paid public official for two years in a row prior to his retirement. He received P15.9 million in salaries and other emoluments in 2016 alone.

Market sentiments after Day 1

While the announcement of inflation returning to government targets at 3.8% was a bright spot for the economy, the Philippine peso weakened by 0.8 percent against the dollar on Tuesday, March 5, the day Diokno assumed his new post. This is the biggest decline in a year according to Bloomberg.

Likewise, the Philippine Stock Exchange index closed at 7,670.62, falling by 0.06%.

Despite this, bankers in the country welcomed Diokno’s appointment.

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“The (Bankers Association of the Philippines) is optimistic that the reformist brand of leadership of the new BSP Governor will pave the way in continuing the necessary reforms and policies to strengthen the Philippine banking industry,” the group said in a statement.

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About The Author
Pauline Macaraeg
Esquire Philippines
Pauline is Esquire Philippines’ data journalist. Follow her on Twitter @paulinemacaraeg.
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