BSP)Governor Eli Remolona Jr. – Photo by bsp.gov.ph
MANILA, Philippines – Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona Jr. received an “A-” grade in New York magazine’s Global Finance 2024 report card for his first year as head of the Philippine central bank.
Remolona, who took over as BSP leader in June 2023, received the third-best grade in the annual report card, which rates success in areas such as inflation control, economic growth targets, currency stability and interest rate management on a scale of “A+” to “F.”
Notably, he received the same rating as Federal Reserve Chairman Jerome Powell, who announced in a highly anticipated speech last week that, given the slowdown in the American labor market, “the time has come for a policy adjustment.”
“A” represents outstanding performance, with “A+,” “A,” or “A-” being the highest grades that the central bank governors of nearly 100 major countries can receive. An “F” represents complete failure.
In a statement on August 19, Global Finance only announced the top-rated central bankers for this year. The full report card for 2024 has been published annually in the October issue since 1994.
Combating inflation
“Central banks have been waging a war on inflation for the past few years, using their most important weapon: higher interest rates. Now countries around the world are seeing the tangible results of these efforts, as inflation has fallen significantly,” said Joseph Giarraputo, the magazine’s founder and editor-in-chief.
“The Central Banker Report Cards, published annually by Global Finance, honor those bank leaders whose strategies outperformed those of their peers through originality, creativity and tenacity,” added Giarraputo.
In his first year as BSP governor, Remolona continued the work of his predecessor, Felipe Medalla, in combating persistently high consumer prices.
In an effort to curb inflation, the BSP raised its benchmark interest rate by a total of 450 basis points to 6.5 percent, a high of over 17 years. This is one of the most aggressive rate hikes in Asia.
This included an urgent 25 basis point interest rate hike during an unscheduled meeting of the BSP’s Monetary Board (MB), which Remolona chaired, in October last year.
In 2024, inflation would rise again due to high global energy prices and the El Niño phenomenon.
Inflation rose to 4.4 percent in July, meaning price growth exceeded the BSP’s target range for the first time this year.
However, the BSP now expects inflation to trend downward from August as lower rice tariffs reduce the risk of upward pressure on prices in the coming months.
Meanwhile, the economy grew by 6.3 percent in the second quarter, but favorable base effects masked weak consumption, which had been weakened by high prices and high credit costs.
To finally give the economy a boost, the BSP announced a 25 basis point cut in its key interest rate earlier this month, its first easing measure in nearly four years, and Remolona said another cut of the same magnitude was possible at either the MB meeting in October or December.
Solid experience
This year, only three central bank governors received an A+ rating from Global Finance: the Dane Christian Kettel Thomsen, the Indian Shaktikanta Das and the Swiss Thomas Jordan.
Remolona is the seventh governor of the BSP and chairman of the MB.
He has extensive policy and operational experience in monetary policy and international finance, having worked for 19 years at the Bank for International Settlements (BIS) and 14 years at the Federal Reserve Bank of New York.
The BIS, based in Basel, Switzerland, is an international organization that acts as a bank to central banks, promotes a forum for discussion and policy analysis, and serves as a centre for economic and monetary research.
From 2019 to 2022, Remolona was Professor of Finance and Director of Central Banking at the Asia School of Business in Kuala Lumpur.
He has also taught at Williams College, Columbia University, New York University, and the University of the Philippines-School of Economics.
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Prior to his appointment as MB in 2022, Remolona served as an independent director of the Bank of the Philippine Islands and chairman of its Risk Management Committee.
