Philippines Names Budget Chief Diokno as Central Bank Governor

(Bloomberg) -- Philippine President Rodrigo Duterte named his Budget Secretary Benjamin Diokno as the new central bank governor in a surprise appointment on Monday.

Finance Secretary Carlos Dominguez confirmed his appointment in a mobile-phone message, saying Diokno’s experience as a “seasoned technocrat and professional manager” makes him an ideal person to lead Bangko Sentral ng Pilipinas.

Diokno, 70, will succeed Nestor Espenilla, who died in February after a battle with cancer. The new governor will serve the remainder of Espenilla’s six-year term, which ends in mid-2023. An economics professor, Diokno was also budget secretary during the short term of President Joseph Estrada and was undersecretary of that department during the time of Corazon Aquino.

As central bank governor, Diokno will need to bring inflation back into the 2 percent to 4 percent target this year after it climbed to a nine-year high in September, while also supporting economic growth. He will also need to anchor investor sentiment and keep the peso stable as the nation holds mid-term elections in May.

The appointment is a surprise to central bank watchers, who had expected Duterte to name one of the three deputy governors, or possibly someone from the banking sector as governor. The president wants to see continuity of policy and reforms in the nation’s central bank, his spokesman, Salvador Panelo, said last week.

While Diokno is a “respected government official and an academician,” his appointment is a surprise, according to Astro del Castillo, managing director at First Grade Finance Inc. “Though he’s an economist an an experienced public servant, it might take time for him to adjust and the market to digest his appointment.”

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