MANILA, Philippines — Former Bangko Sentral ng Pilipinas governor Benjamin Diokno said the BSP was never politicized and especially not during his term.
He also said the BSP remains free from any executive intervention.
“I strongly object to the allegation that the BSP was ‘politicized’ during my watch. I’m proud of what I did as BSP governor during the unprecedented COVID-19 pandemic,” Diokno said in an email to The STAR.
This was in response to an article on BSP ghost employees published by The STAR on Monday, where BSP insiders said the central bank started becoming “politicized” during Diokno’s term.
“During my watch as BSP governor, President Rodrigo Duterte never called me to influence monetary policy. It was never politicized,” he said, adding that Duterte respected the independence of the BSP during the pandemic.
Diokno acted as the BSP chief from March 4, 2019 to June 30, 2022. He was appointed by Duterte after the death of BSP governor Nestor Espenilla. Diokno currently sits on the BSP’s Monetary Board, the central bank’s highest policymaking arm.
At the height of the COVID-19 pandemic, the BSP slashed policy rates to fresh record lows to support economic growth.
The Monetary Board, headed by Diokno at the time, cut interest rates by a total of 200 basis points to two percent in 2020.
Diokno was awarded the “Global Central Banker of the Year 2022” by international business magazine “The Banker.”
“Central banks are among the most important governance institutions in the world,” Diokno said. “It is important that the market sees that the central bank is free from any Executive intervention.”
“Any allegation that the Monetary Board is ‘politicized’ could shatter the perception that the central bank is beyond political influence,” he added.
With current BSP Governor Eli Remolona Jr. as the head, the Monetary Board includes Finance Secretary Ralph Recto, Diokno, Rosalia De Leon, Romeo Bernardo, Bruce Tolentino and Anita Linda Aquino.
The seven-member board is responsible for formulating and implementing monetary policy and supervising the financial system.
Its primary objective is to preserve price stability, which is a condition of low and stable inflation.
To tame inflation, which spiked in 2022, the Monetary Board hiked policy rates by 450 basis points from May 2022 to October 2023, bringing the benchmark interest rate to 6.50 percent, the highest in 17 years.