Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr.
BSP Governor Amando Tetangco Jr.: The man, who turned the economy around
"To always be a blessing to others" is his principle in life, and true to his guiding principle, Amando Tetangco Jr., the governor of the Bangko Sentral, has been a blessing not only to his family but to the whole country as well.
Just how the Philippine economy climbed out of the deep hole it was in during the 1970s and 1980s is a story in itself that is worth telling. One of the men responsible for the economy's climb is Tetangco, along with other officials of Bangko Sentral, who over the past decade stabilized inflation and induced policies to spur economic growth.
"As a central banker, I am privileged to have been part of the process of transformation of our institution from being deeply in debt and unable to meet its obligation without a debt restructuring program to a central bank that is now a net creditor with record high gross international reserves," Tetangco says.
The Philippines, which had a debt crisis in the early 1980s, now has gross international reserves exceeding $80 billion, enough to support a year of imports, which is much greater than the international benchmark of just three months. The amount also exceeded the country's foreign debt of just $62.5 billion as of June.
Unknown to many, a significant part of the reserves are invested in the US treasuries, making the Philippines a lender of billions of dollars to the US.
Even President Aquino, who replaced all Arroyo appointees when he assumed office in 2010, saw the wisdom in naming Tetangco for a second six-year term. Tetangco was first appointed governor of the Bangko Sentral in July 2005.
Recently, Gobal Finance cited Tetangco Jr. as one of the five best central bank heads in the world, actually for the fourth time since 2006. International credit rating agencies also mentioned the good performance of the Bangko Sentral in handling inflation and the balance of payments in justifying their upgrade of the country's credit rating.
Before joining the Central Bank of the Philippines in 1974, Tetangco worked at the Management Services Division of accounting firm SGV & Co.
He finished his elementary and high school education at Don Bosco Academy in Pampanga and took up AB Economics at the Ateneo de Manila University where he graduated cum laude. He also studied Graduate courses in Business Administration in the same university.
As a Central Bank scholar, Tetangco took up his MA in Public Policy and Administration with concentration in Development Economics at the University of Wisconsin in Madison, USA.
Tetangco rose from the ranks of the BSP hierarchy, occupying various positions for over three decades.
He started as a statistician at the Department of Economic Research. "It was a job application letter I sent in 1974 to then Governor Licaros that started my journey as a central banker," Tetangco recalls in an interview.
Tetangco says being an economist was a childhood dream. "Having studied Economics, I believed I could contribute to the role of the Central Bank consistent with national efforts to make our economy grow on a balanced and sustained manner and, in the process, make people's lives better," he says.
The Philippine economy today is very different from what it was when Tetangco joined the Central Bank in the mid-1970s.
"At that time, the economy was less open to the rest of the world with government's import substitution strategy and capital account restrictions. Trade policy was quite tight and trade barriers were high in order to shield local industries from foreign competition in the domestic market," Tetangco says.
He says inflation was also a source of concern, because the domestic economy was insulated from international competition that could keep local price levels in check. Meanwhile, upside cost pressures were building up due to the rapidly increasing global prices of petroleum products following the oil embargo by the OPEC in 1973.
"With domestic prices rising faster than those in the country's trading partners during that time, the country's competitiveness started to erode, especially since the peso was essentially fixed against the US dollar. Exports were not growing enough and the country had to resort to foreign borrowing to meet its requirements for foreign currency which resulted to the doubling of the country's external debt and the deterioration in the country's balance of payments position," Tetangco says.
The Philippine economy today
He notes that today, the Philippine economy has become more open, with the broadly protectionist underpinnings of previous policies giving way to a more market-oriented and less heavy-handed approach to managing the country's resources.
"The gradual removal of restrictions on foreign direct investment has paved the way for the inflow of investments in the private sector as well as in infrastructure, which aided the country's modernization," he says.
In addition, the crisis experienced by the country in the 1980s provided the country with an opportunity to internalize important economic lessons as fiscal and monetary authorities implemented various reforms towards a stronger and more stable financial system as well as more sustainable economic growth, he says.
"The past crises have also brought to light the importance of policy coordination in promoting macroeconomic stability. The close coordination of monetary, regulatory, and fiscal policies was critical to the restoration of the country's stability, which in turn, paved the way for business confidence to improve and for economic recovery to take root," Tetangco says.
"Certainly, there have been noticeable improvements in the economy in general. Our external payments position is healthy resulted by remittances and sustained receipts from tourism and the business process outsourcing sectors, which could not have been possible without improvements in infrastructure, governance, and even human capital. But we need to double our efforts in alleviating poverty," Tetangco adds.
Given these developments in the country, he says that five or 10 years from now, strong macroeconomic fundamentals and a favorable demographic transition will support a significant rise in the country's activity over the medium term.
"The working population will contribute positively to growth potentials when they are nourished properly, healthy, and appropriately educated," he says.
Despite his success as an economist and as a central banker, Tetangco believes that no one has a monopoly of good ideas thus, reflecting his democratic style of management but he says that once a decision is made, he expects all parties to unite behind it and ensure its successful implementation.
"I encourage people to articulate their thoughts, to discuss their opinions. I also demand complete staff work to ensure that we benefit from a 360-degree assessment. Then I make the decision," he says.
During weekdays, his typical office day is a mix of meetings within the bank such as interagency consultations, handling phone calls, answering media questions, wading through many documents to read and memos to sign, delivering speeches, and attending business or cultural functions after office hours.
Despite his busy schedule at work, he sees to it that he has time to do workouts at the gym before leaving home. He had a heart bypass in February 2010.
Outside the Bangko Sentral, Tetangco describes himself as a regular kind of guy who has friends and a growing family.
"I have a wife I have been happily married to for 27 years now with whom I have two daughters and a son. My son is married and he and his wife have made me and my wife grandparents," he says.
During weekends, he and his family hear mass together. They go to the mall and watch movies. Sometimes he and his friends play golf, do target shooting, and watch Ateneo's basketball games.
His biggest accomplishments
Tetangco accomplished a lot of things for the economy, but he also treasures his family as one of his greatest achievements. "On a personal level, I find great satisfaction in seeing the members of the Elma Plana- Say Tetangco family happy, healthy, actively engaged in pursuing their personal goals, but remaining very close and supportive of each other," he says.
As head of the Bangko Sentral, he says that he is proud that the BSP continues to successfully implement its Constitutional mandate to craft and implement monetary and banking policies that keep our economy stable and able to promote inclusive growth.
Tetangco says being selected as one of the rated "A" central banker in four of the seven years he served as governor of the Bangko Sentral is one of his biggest accomplishments in life but he thinks the credit properly belongs to all BSPers and to the Philippines.
With these accomplishments, he cites his family as his source of strength and inspiration.
"My wife and children who love and support me, in sickness and in health and even when work sometimes get in the way of family affairs, my father who was an honest and hardworking public servant, my mother, an inspiring woman who by her words and deeds quietly instilled the values of honesty, integrity and responsibility in our family of nine siblings, and my brothers and sisters who have always been very supportive of my work as a public servant," he says.
Given his success, a lot of people would surely want to be just like him. Tetangco's advice is to keep their integrity intact and develop a strong sense of purpose.
"They should always have the discipline, the focus, the tenacity, and the passion to be the best they can be, even when no one is watching," he said.
Manila Standard Today
