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UP Naming Mahal: Di Rin Magbabago Ang Damdamin

Date: 11.11.2017

Place: Ikot Ikot 25, Econ Grounds

Occasion: University of the Philippines, School of Economics, Alumni Homecoming

Speaker: BSP Governor Nestor A. Espenilla, Jr.

I thank the UP School of Economics  Alumni Association (UPSEAA) for the opportunity to speak at tonight’s homecoming.  Dean Orville, dear Professors, co-alumni, ladies and gentlemen, good evening. 

I would like to begin with some lines from our alma matter song: “UP Naming Mahal, Pamantasang Hirang… Malayong lupain, aming mang marating… di rin magbabago ang damdamin.”

Coming Home

This is the essence of coming home.  To return to a place that has moulded your character and yet still feel the same even after many years… to be reminded of the core values it instilled with gratitude and loyalty.

When I first came to UP Diliman in 1977… (Now you know at least two digits of my student number…) I was, like others in my batch, young and idealistic… I was a fresh graduate of the Ateneo High School where I led a somewhat sheltered life.

Adjusting From the Other Side of Katipunan

UP Diliman was quite a change.  There was a stark difference in the freedoms it allowed and fiercely protected – academic freedom, freedom of speech and expression… Even then, diversity and individualism were highly valued. UP had a culture markedly different from that of my rather elitist high school.
At that time martial law was still in effect, and UP students openly expressed their views with a fire that characterises and defines who we are.  What a rush to be in Diliman in those turbulent days! 

In the UP School of Economics (UPSE), we studied economic principles, formulas and charts. The numbers were alive, set against the backdrop of the desire to make a difference.   I dare say that in UPSE, each had the desire to emerge from the University and play a part in nation building (or at the very least, dreamt of emerging from the University).

There were dreams to publish policy papers to redefine and hasten economic development…to go into politics, law, government service, to teach, form NGOs, join international financial agencies, the World Bank…  Dreams to make a difference.  I too had a dream. 

Iskolar ng Bayan

These inclinations are not surprising.  Our core identities as “mga iskolar ng bayan” is linked to the duty to serve.  But more than a moral obligation, there is also the sincere desire to give back to the country to which we owe our heavily state-subsidized (now free?) education.

Perhaps this desire was brought about by regular exposure to opinionated professors, arguments with possibly left-leaning classmates. Moreso, perhaps this is inspired by the generations of notable UP graduates whose energies linger on to inspire (and taunt) younger students into greatness. 

But I think this desire is continuously instilled too by powerful reminders around campus.  The Oblation (and the newer female version), offering itself in its most vulnerable state to God and country.  The Carillon, a memorial to UP Alumni which regularly played the National Anthem.  Street food featuring “isaw” and fishballs.  And the inclusive and iconic IKOT Jeep.

They remind us that we have returned home. This is certainly how I felt as I was driving up the University Avenue under the shade of the familiar canopy of Narra Trees. 

Excellence in Public Service

UP also instilled excellence and grit in us. Combining these with the aspiration to serve, as soon as I finished all my academic requirements a semester early (in October of 1980) I immediately applied to work for government.  No private sector applications for me.  In 1981, I ended up in my dream first job: at the Central Bank of the Philippines!

What a time to be a young economist in the government! Perhaps it was more than what I bargained for. There was political unrest.  A debt crisis was unfolding. The economy was in recession. In 1983, a debt moratorium was declared.  Dollars were being rationed and so-called Jobo bills had astonishing interest rates at more than 40% per annum.  Compare that to around 3% today.  I think it was my very orientation as a UP Graduate that made me chose this job rather than private employment. 

Perhaps it is because of these values of nationalism, excellence and grit that UPSE has distinguished graduates in economics, commerce, law, the academe and government. 

In our alumni roster are several former NEDA Director-Generals, the Ombudsman, Associate Justices of the Supreme Court, Senators, members of Congress, Provincial Governors, Mayors, Cabinet Secretaries and Under-Secretaries, Commissioners, a National Scientist, the Vice-President, a former President of the Republic, and last July 3, 2017, I was appointed as 4th Governor of the Bangko Sentral ng Pilipinas.

The BSP has a 5000 plus strong workforce with at least 700 UP alumni in its ranks.  Prominent in our top-level management, are honor graduates of the UPSE -- Deputy Governor Diwa Guinigundo, (AB Economics, 1976, cum laude) and Deputy Governor Cyd Amador (BS Business Economics, 1978, cum laude).  And of the course, distinguished UPSE professor, MBM Philip Medalla.

There are one hundred fifty seven (157) UPSE graduates who hold positions of leadership and service in the BSP.  They contribute to the formulation of monetary policy, conduct of banking supervision and the functioning of the payments system.

The decision to join government is deliberate.  There are some who question this choice and joke that the top officers of banks are paid several times over than us. This is true.  But still, we in government choose public service every day.  It is a daily commitment fraught with challenges. 

Why do we do it?  As an economic manager, my answer is that: the benefits exceed the costs.  I know many of you here can relate.

These benefits are not financial.  There is great fulfilment in positively influencing the country’s economic narrative and in elevating the standard of living of our citizens.

Continuity Plus Plus

My dream was to join the Central Bank.  Thirty-six years after, I was appointed BSP Governor. Imagine how thrilled (and how terrified) I was!  Hustled into my first press conference, I declared that my term would be characterized by “continuity plus plus.”

Continuity is important.  Stability is the name of the game and is every Central Bank’s mantra.

Since the 1997 Asian Financial Crisis, the BSP has pursued deep and meaningful financial and structural reforms bringing about macroeconomic stability.  This is the solid foundation I am fortunate to inherit.

The Philippines today is regarded as one of the fastest growing and most resilient economies in the region and the world.  We have enjoyed uninterrupted growth spanning 18 years!  In the past five years, the domestic economy has expanded by more than 6 percent annually.  We expect the economy to continue to grow strongly over the medium term.

Since the BSP’s adoption of the inflation targeting framework in 2002, inflation has stabilized and has hit the targets consistently. Inflation expectations are anchored on carefully-calibrated, well-communicated monetary policy. 

To enhance the link between the BSP’s monetary policy stance and financial markets, the interest rate corridor (IRC) system was adopted in 2016, strengthening monetary policy transmission to the real economy.

The balance of payments (BOP) is firmly under control and is back-stopped by large foreign exchange reserve buffer.  The Peso is flexible and market-determined.

In the financial system, the BSP has been pursuing a reform process involving asset cleanup, industry consolidation, enhancement of corporate governance and risk management standards, and the strengthening of compliance and enforcement frameworks. These reforms along with industry cooperation and commitment has brought about robust and vibrant financial sector. 

The Plus Plus

Continuity is important. What is exciting is the “plus plus.”    The “plus plus” is “the premium” in my cost benefit analysis.  Why?  Because in these initiatives, lumalabas ang pagka-UP ko.  At the heart of the “plus plus” efforts is greater financial inclusion.

In the year 2000, BSP identified financial inclusion as a compelling objective. We mainstreamed microfinance in the banking sector. 

In 2007, we created a unit dedicated to financial inclusion, being the first central bank in the world to do so.  We have also pioneered the establishment of dedicated units for consumer protection and information technology supervision.  Since then we have liberalized entry into the banking system and have recognized Fintech to promote healthy competition.

Deepening of Capital Market and FX Liberalization

In close collaboration with partner government agencies, we are now mounting a determined effort to deepen our domestic money and debt markets to promote price discovery and diversify funding sources.

We are also further liberalizing foreign exchange  rules.  The goal is for greater market depth and transparency; and increased availability of hedging instruments for market participants.  This will also promote ease of doing business.

Modernization: Technological Disruption

Another part of the “plus plus” concerns changes to the economic and financial landscape.  The world is being rapidly transformed by digital revolution and technological advances! 

Thirty-six years ago as a student, I had to run regressions by punching cards, then dash to the Computer Center, and come back for the results print-out which was in outsize continuous forms at least an inch thick.  Now, students can retrieve data in real time with wireless connections and access points anytime, anywhere.

Rapid technological advances are also disrupting the financial and banking system.  Rather than be fazed, we are leveraging on digitalization and fintech solutions to reach the unbanked. We are likewise closely working with national government to adopt a biometric-based foundational ID system.  We believe that the lack of a reliable and convenient ID system is a major barrier to financial inclusion.  We aspire to connect all of our countrymen into the digital finance ecosystem.

Last December 2015, we launched the National Retail Payment System (NRPS) project to enable an inter-operable digital payment ecosystem.  The NRPS will allow convenient and affordable fund transfers between and among accounts using any digital device.  Imagine paying for your IKOT fare using your mobile phone by scanning a QR code pasted on the jeepney.  We envision our rapid transition to a cash-lite economy.  The first batch electronic fund transfer credit payment scheme called PESONet was launched at the BSP just three days ago on November 8, 2017.  This will potentially replace paper checks and enable large-scale batch payments such as payroll and cash transfers.

Internally at BSP, we are also doing Regtech to improve our own capabilities and eventually shift to big data analytics.

Nevertheless, we remain grounded and sensitive to risk, old and new.  We have issued various regulations to mitigate cybercrime and money laundering risks.  We have enhanced regulations to ensure that non-banks are properly supervised as they delivery bank-like services.  We have strengthened consumer protection regulations.


Through the continuity and the “plus plus” initiatives of the BSP, we aspire to make economic progress more meaningful for all our citizens.  Success cannot be achieved through individual effort even of the most noted Iskolars ng Bayan… Fellow UPSE Alumni, friends, ladies and gentlemen, we must work together.  Constant engagement with our stakeholders is essential.

The future is bright as we bank on the values that we hold dear.  Values of dedicated service, excellence, and grit.  Values “na hindi nagbabago, mga damdamin ng Iskolar ng Bayan na di rin nagbabago”

Mabuhay ang UPSE.  Mabuhay ang UPSEAA.  Mabuhay ang UP at ang mahal nating Pilipinas.