BSP chief made ineffective by GMA, earns ‘demotion’

From the Daily Tribune:

A prestigious publication which has extolled Bangko Sentral ng Pilipinas (BSP) Governor Rafael Buenaventura as among the best Central Bank chiefs in the world in the past two years has demoted the country's top bank regulator this year not because of his failures but due to President Arroyo's persistent encroachment on the agency's independence rendering him ineffective.

In this year's ranking by the prestigious New York-based business magazine Global Finance, Buenaventura only obtained a “B” rating, a downgrade from previous ranking when his performance as chief financial regulator was of prime quality and therefore deserving of an “A” grade.

But not this year, according to Global Finance writers Dan Keeler and Santiago Fittifaldi who summed up the individual performance of the world's best central bankers.

The unfortunate thing about Buenaventura's demotion had nothing to do with his compe-tence and professional skill, which remain unquestioned.

The demotion was based on perception that his indepen-dence, guaranteed by law, may be under threat and that he is seen to be increasingly at odds with Malacañang over key policy matters.

“Part of the problem is that Buenaventura does not appear to see eye to eye with President Gloria Macapagal-Arroyo on key issues,” the magazine said in justifying the “B” classification it gave the Central Bank chief this year.

The past two years, Buenaventura obtained nothing less than but prime recognition from the prestigious magazine when his performance as central bank chief was rated “A.”

The co-authors noted the BSP in August this year “unveiled a series of reforms to strengthen the financial sector and support the president's plan to boost growth and create jobs.

“However, while Buenaventura said the sovereign debt load remains serviceable, the president says the government faces a fiscal crisis,” according to the publication.

“While Buenaventura suggests the government tap the international capital markets if foreign direct investments continues to drop, the president wants to plug the shortfall by raising taxes,” the co-authors said.

“It seems Buenaventura's independence will continue to be challenged, for which he may have to be both a diplomat and a central banker,” the magazine concluded.

...

In the Asia-Pacific region, Buenaventura's standing was overshadowed by that of Australia, Malaysia and Indonesia who all obtained “A” classification.

His performance was on par only with that of Japan, New Zealand, India, South Korea and Taiwan even though neighboring Thailand only rated a “C” along with China.

The US Federal Open Market Committee and its head, Alan Greenspan, also had a “C” rating, the same rating he got last year.