The banking community yesterday welcomed President Rodrigo Duterte’s appointment of Budget Secretary Benjamin Diokno as the new Bangko Sentral ng Pilipinas (BSP) governor, a development that was also cheered by economic leaders and government executives.

The Bankers Association of the Philippines (BAP) also expressed optimism with Diokno’s appointment which Malacañang said will place the country’s banking institutions in “good and competent hands.”

“The (BAP) welcomes the appointment of Department of Budget and Management (DBM) Secretary Benjamin Diokno as the new (BSP) Governor,” the BAP said.

“A respected economist, academic and civil servant, Diokno spearheaded various budget and governance reforms which improved the efficiency of the delivery of government services in the country,” it added. “The BAP 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 BAP supports the new BSP Governor as a new chapter of the Bangko Sentral is about to unfold. The association will remain committed in its role as a partner of the national government in building a strong economy through an empowered Philippine banking sector,” the association said.

President Duterte announced Diokno’s appointment at the start of the 35th Cabinet meeting on Monday in Malacañang.

BANGKO Sentral ng Pilipinas will have a new governor in Benjamin Diokno.

Senators also welcomed Diokno’s new tour of duty, with Sen. Chiz Escudero, chairman of the Senate Committee on Banks and Financial Intermediaries, saying the official’s appointment from the DBM to the BSP is “a promotion.”

“We expect incoming Governor Diokno to spearhead reform initiatives that will align the financial institution’s operations with international best practices and improve its corporate viability, among others,” presidential spokesman Salvador Panelo said.

“We wish Secretary Diokno all the best in his endeavors as the new chief of the country’s central monetary authority. With him at the helm of the (BSP), our banking institutions are in good and competent hands,” he added.

Panelo and Executive Secretary Salvador Medialdea confirmed President Duterte’s naming of Diokno as successor to the post of the late BSP chief Nestor Espenilla Jr. who passed away recently.

Diokno will serve out the unexpired term of Espenilla who succumbed to cancer. Espenilla’s term was supposed to end mid-2023.

The Palace also expects Diokno to continue with the reforms instituted by Espenilla in line with Republic Act (RA) 11211, also known as the New Central Bank Act, which restores the institution’s authority to issue debt papers as part of its operations.

It also improves the BSP’s corporate viability and enhances its capacity crafting proactive policies amid rising interlinkages in the financial markets and the broader economy.

The spokesman likewise thanked Diokno for his efforts as DBM secretary as he spearheaded investments in growth-enhancing infrastructure programs and innovations, inequality-reducing social services and peace-enabling initiatives.

“We thank Secretary Diokno for his services to the nation and to this administration as Secretary of Budget and Management, a position he similarly held under the Estrada presidency,” he noted.

DBM Undersecretary Janet Abuel will be the officer-in-charge of the agency while the President is scouting for Diokno’s replacement.

Sought for comment, an economist said this recent appointment will bring some market adjustments.

“I think the market will adjust. Markets need to hear Diokno and it would be good if it’s about continuity,” he said.

Another economist shared the same sentiment, noting that they have yet to see the new BSP chief’s program for monetary policy.

Moreover, the DBM lauded the appointment of its former chief listing all the achievements they have made under Diokno’s leadership.

“Secretary Ben, a lifelong public servant and economics professor, embodies the decisive leadership, professional experience and technical competence needed in a central bank governor,” the agency said.

“In his most recent stint as Budget chief, Secretary Diokno pursued an expansionary fiscal policy to invest heavily on public infrastructure and human capital development. For the first time in history, the government disbursed more than five percent of the country’s gross domestic product on public infrastructure — a testament to his firm resolve and expertise,” it added.

“A seasoned academic and policy expert, Secretary Diokno is also professor emeritus at the University of the Philippines Diliman where he taught for 30 years,” according to the DBM.

The former Budget secretary completed his bachelor’s degree in Public Administration (1968), Master’s degree in Public Administration (1970) and Master of Arts in Economics degree (1974) from the University of the Philippines-Diliman.

He also earned a master of arts in political economy degree from the Johns Hopkins University in the United States (1976) and a doctorate degree (PhD) in economics from the Maxwell School of Citizenship and Public Affairs, Syracuse University (1981).

Diokno has served three administrations, first as DBM undersecretary for former President Corazon Aquino and eventually as Budget Secretary under President Joseph Estrada and again for President Duterte since 2016.

In his stint with the Duterte administration, Diokno has eliminated underspending, a trend where actual government disbursements falls below program as in 2014 and 2015 — where underspending was as high as 13.3 percent and 12.8 percent, respectively, amounting to P631 billion in the two-year span.