Tetangco named as best central banker for Asia-Pacific

Businessworld (January 10, 2013) – BANGKO Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco, Jr. was again recognized as one of the best central bankers in the world for keeping the Philippines afloat amid the global economic downturn.

The Banker, a monthly magazine published by The Financial Times, Ltd., cited Mr. Tetangco as the Central Banker of the Year for Asia-Pacific, the BSP said in a statement yesterday.

“The Banker’s Central Bank Governor of the Year awards celebrates the officials that successfully steered their countries through the economic turbulence of 2012,” the magazine said.

Along with Mr. Tetangco, other awardees were Erdem Basci of Turkey, representing Europe; Mark Carney of Canada, representing the Americas; Jose Massano of Angola, representing Africa; and Fahad Al-Mubarak of Saudi Arabia, representing the Middle East.

The Banker cited the BSP’s role in the Philippines’ strong fundamentals: inflation fell to only 3.2% in 2012, well within the 3-5% target, despite the expansion of the gross domestic product (GDP) by 6.5% as of the third quarter, which exceeded the government’s goal of 5-6%.

The central bank has even cut its inflation target to 2-4% for 2015 and 2016, it noted. Mr. Tetangco told the magazine that this would send a signal to the market that the regulator is “serious about keeping prices low and stable.”

Moreover, the BSP should be lauded for placing importance on the stability of the banking system and consumer protection, the Banker added.

Looking ahead, Mr. Tetangco said the major challenge for the Philippines now is the “magnitude, speed and volatility of capital flows.”

“Because there is a time lag between when the capital flows into the financial markets and when the funds are actually absorbed into the real economy, their presence makes policymaking more challenging,” he explained.

As investors flee struggling markets like the United States and Europe in search of better yields in emerging economies such as the Philippines, the BSP is put in a precarious position.

“The very tool which textbooks say we should employ in the face of surges of inflows -- raise interest rates to combat the potential inflationary effect of increased domestic liquidity -- could in fact attract more inflows and thus perpetrate the cycle,” Mr. Tetangco said.

This is the third time that the BSP chief has been ranked among the world’s best for 2012. Global Finance Magazine gave Mr. Tetangco an “A” rating along with five other governors in its Central Banker Report Card last year. Emerging Markets, an international magazine of the Euromoney group, also named Mr. Tetangco as the Central Bank Governor of the Year for Asia.

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