Nestor Espenilla, Jr, the late governor of the "Bangko Sentral ng Pilipinas" (Central Bank of the Philippines) who died of cancer on Feb. 23, will be remembered more for his accomplishments as the bank's deputy governor than as its head.
Espenilla, 60, was appointed BSP governor only in May 2017 by president Rodrigo Duterte and formally took on this job in July. He was the central bank's fourth governor. On the other hand, he served as the central bank's deputy governor since 2005.
His 18 month-long stint as BSP governor is the shortest in the history of the central bank and wasn't enough to cement his legacy. He joined the central bank in 1981.
Espenilla was diagnosed with tongue cancer in November 2017 and went on leave intermittently during 2018 as he sought treatment for the disease. His family announced Espenilla died of complications from tongue cancer. Espenilla is survived by his wife and three children.
During his short stint as governor, Espenilla championed key banking reforms such as further liberalizing the foreign exchange market and lowering bank reserve requirements. He also advocated greater financial inclusion among the country's huge number of "unbanked" citizens.
Also as BSP governor, Espenilla sought to build on his reputation as the "tough cop" erring banks and financial institutions had to contend with when they broke the law.
As deputy governor, Espenilla was at the center of several high-profile cases that proved the integrity of the central bank when dealing with banks that had gone awry. He becomes deputy governor in 2005.
He shut down a troubled Philippine savings bank named Banco Filipino in 2011 after a probe by Espenilla and his central bank team revealed the money entrusted to Banco Filipino by its depositors was diverted to entities controlled by the bank's owners and officers
Another bank shut down by Espenilla was LBC Development Bank owned by the prominent Araneta family, one of the richest in the Philippines. Espenilla's investigation discovered the bank's management had saddled the bank with $117 million (PhP6.1 billion) in deposit liabilities after transferring this amount at different times to other businesses of the Aranetas.
The BSP closed LBC Development Bank in September 2011 because the latter's estimated realizable assets were insufficient to cover its liabilities. The bank's massive advances to other Araneta firms weakened its finances.
As deputy governor, Espenilla was also the central bank's representative to the Anti-Money Laundering Council (AMLC), which is the Philippines' anti-money laundering agency also responsible for financial intelligence and financial counter-terrorism. He was the chairperson of the AMLC.
In 2018, Espenilla ordered that Rizal Commercial Banking Corporation (RCBC), one of the Philippines' leading banks, pay $19 million (PhP1 billion) for its role in what's been called the "Bangladesh Bank robbery" of 2016.
This scandal saw RCBC being used by hackers to launder the $81 million they stole from the account of the Bangladesh Bank at the Federal Reserve Bank of New York.
The Monetary Board designated Deputy Governor Almasara Cyd Tuano-Amador as officer-in-charge of the BSP. Duterte will have to appoint a replacement to serve out the remainder of Espenilla's six-year term.
