BSP: Monetary Board can function with five-member quorum

The Bangko Sentral ng Pilipinas (BSP) on Tuesday said the Monetary Board has “functioned as normal” and will continue to do so as long as there is a four-member quorum, following reports of ghost employees involving two board members.

In a statement, the central bank responded to talks that there could be vacancies in the policy-setting Monetary Board, after six workers were implicated in the controversy, as four “ghost employees” could have been employed under the watch of the two board members.

“In response to speculation that vacancies may occur that would affect the board’s operations, the seven-member board can continue to perform most of its duties provided there is a four-member quorum and the rest of its duties such as granting emergency loans, with five members,” the statement read.

“We are constrained from commenting further on the Monetary Board members because they are presidential appointees,” it added.

This comes as six four “ghost employees” were reported to have been employed in the central bank, which is tasked to promote and maintain price stability, a strong financial system, and a safe and efficient payments and settlements system to boost the country’s economy.

The BSP said the Office of the General Counsel started an investigation into the matter in October 2023, after receiving "credible information" that several staffers in the officers of two MB members were receiving their salaries despite not reporting for work for extended periods of time.

It then instructed the investigating team to proceed with an in-depth investigation in December 2023, which then identified four employees and their two immediate supervisors in January.

Administrative disciplinary cases were filed in March, before four of the employees and one direct supervision implicated in the report have already tendered their resignation from late February to early March.

“We hope this clarifies, within the bounds of confidentiality and fairness due to ongoing proceedings, the steps the BSP has taken since first receiving reports on the issue, to ensure that any erring employee will be held accountable,” the BSP said.

The Monetary Board is chaired by BSP Governor Eli Remolona Jr., and counts as members Finance Secretary Ralph Recto, former Finance Secretary and former BSP Governor Benjamin Diokno, V. Bruce Tolentino, Anita Linda Aquino, Romeo Bernardo, and Rosalia De Leon.

The Monetary Board last met to discuss policy settings on May 16, during which they decided to keep rates unchanged. The next meeting is scheduled on June 27.

In a separate statement, Diokno denied reports that the central bank started getting “politicized” under his term.

“I’m proud of what I did as BSP Governor during the unprecedented COVID-19 pandemic. For our bold, swift and decisive actions, the Banker magazine, an affiliate of Financial Times, has named me the best central bank governor in Asia and in the world,” he said.

“President Duterte has respected the independence of the BSP during the most difficult period in the Philippines’ recent history.  During my watch as BSP governor from March 4, 2019 to June 30, 2022, President Duterte never called me to influence monetary policy.  It was never politicized,” he added. — RSJ, GMA Integrated News