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Paeng Buenaventura:  Doctor of Serendipity

(Article published in the Apr 26, 2006 issue of Manila Standard Today)

             The Board of Trustees, faculty and parents of the graduating class of Far Eastern University must have thought it serendipitous that their graduation speaker was former Bangko Sentral ng Pilipinas governor Rafael Buenaventura.  He certainly had something to say and by dint of their good fortune, he did not bore them to death saying it.

I saw Paeng relaxing at the beach a week before FEU conferred on him the degree of Doctor of Science in business administration, honoris causa, and I asked him if he had already finished writing his address.  “Yeah”, he said. “Nothing weighty; just about my serendipitous journey in banking.” 

          I asked myself, “Serendi-what?” It could not have been that prolonged alcohol deprivation had begun affecting my hearing; I knew for a fact that I broke my annual Lenten abstinence from alcohol at least twice, the last one just before Palm Sunday.  It must be, I was sure, some sort of influence from his wife who was at that time, and as always, nearby and ministering to him just like “amber” in the title of his talk to the joint meeting of financial trade organizations  just before turning over the leadership of the BSP to Say Tetangco.  Honestly, I am not too sure people like to hear someone as hard-boiled as Paeng mix the vocabulary of art with the syntax of finance in the same breath. 

But nevertheless, appreciated his speech as I am sure his audience did.  In the first place, he observed the rule of “KISS”  by keeping it short and simple.   He dispensed with the politically correct recitation of the names of all on stage (after all, Paeng was never a politician in the many senses of the word), and limited himself to expressing his thanks to Dr. Lourdes R. Montinola and Dr. Lydia B. Echauz, board chairman and president, respectively, of the university that traces its roots to institutions that have been serving the country since the American regime.  He then plunged into what he wanted to say: how he got to where he was and the lessons he learned in his surendipitous journey in banking.

Buenaventura noticed two things as he looked back at his career:  First, he sought to be always prepared for whatever life might throw his way and second, he strove to always professionalize himself and his workplace.   

Preparation for life’s surprises necessarily started with some schooling. Before taking his MBA at New York University, Buenaventura attended a high school run by the Jesuits and for his commerce degree, a college run by the Christian Brothers.

Buenaventura purposely left out the names of these schools (Ateneo and La Salle) I surmise, like many alumni of either school seeing what their alma mater are now, whether he ought to be proud of or to apologize for either one or both of them. At any rate, the schools that he attended were his parents’ choices, not his.

But where and how he got his education (as distinguished by Mark Twain from “schooling”) were, however, Paeng’s choice and he mentions names. He was credit investigator, while in his senior year in college, at the Security Bank. Then, he was a management trainee and, within 24 years, to become the bank’s first Filipino country head of Citibank in the Philippines.  Finally, until 1998, Buenaventura was president of PCIBank.

The brevity of his narration unfortunately deprived the audience of some interesting sidelights which I now, though without authority but keeping to his standard of “nothing weighty”, supply:  In school, Paeng was only “B-average” student, hardly foreshadowing the shining career that lay ahead of him. This ought to be reassuring to the majority of graduates who are not in the honor roll.  This message to them is that being an average student is certainly not an impediment to excellence.  At Security Bank, Buenaventura’s boss is still a Rufino. This time, the Rufino is Marivic, Don Rafael’s youngest daughter.  I do not know whether that is because of Paeng’s being a B-average student.  Someday, I will ask Marivic outside his hearing.

At Citi, Paeng’s colleagues were out-of-the-box thinkers with just as out-of-the-box names like “Florencia”, “Leonilo”, “Vitaliano” and “Deogracias”,  as well as Filipinized appellations like “Aurelio”, “Teodoro”, and even “Reynaldo”.  They are all still presently dispersed in positions of power in the banking world, a phenomenon known as the “Citibank diaspora”. Paeng’s former pupils are known as “Flor”, “Topper”, “Lani”, “Sonny”, “Gigi”, “Teddy”, and “Rey.”

Finally, Buenaventura’s boys at PCIBank are also bank presidents and chief executive officers like Joey Bermudez of China Trust; Butch Alcantara who was head of the Philippine Bank of Communications and Rene Buenaventura who stayed behind to lead Equitable PCIBank.  This means that in that way, you can blame Paeng for the state of Philippine banking institutions today.   

PCIBank, however, was just a prelude to BSP.  The word “professional” is from the root, to “profess”, i.e. to declare in word and affirm by deed a passionate interest or conviction.

The reforms Paeng had set in motion to achieve his vision are still in the trajectory that he had set.  Hence, they are not proper subjects in a graduation, which involves looking back at things one has already achieved. 

Nevertheless, I would like to mention some major achievements here. 

In line with the statutory objective set for the BSP “to maintain price stability conducive to a balanced and sustainable growth of the economy” (Section 3, Republic Act 7653), Buenaventura instituted direct inflation targeting.  This consisted in predetermining a narrow band of play for the level of inflation, thereby facilitating planning as well as risk management.  In contrast to the previous stance of simply monitoring-and-reacting, direct inflation targeting enabled the BSP to proactively use any and all its instruments of action before the financial system is put at risk beyond management.

Paeng overhauled regulatory policies and practices to push the banks to conform to global standards in terms of bank capital adequacy (BSP personnel had to be reeducated and trained in the looking at balance sheets through the microscope of risk-based evaluation of the sufficiency of a bank’s capital).  He pushed them to adopt prudential measures made necessary by the global antimoney laundering movement.  He supported the establishment of several institutions, such as a  fixed-income exchange and a central credit bureau, and the adoption of practices, such as third-party custodianships over publicly traded financial instruments, needed to earn the confidence of the international community in the Philippine capital market as well as enhance the protection to investors and depositors.  At the same time, Paeng made microfinancing his flagship program to give the poor access to the credit they badly need. At the end of his stint at the BSP, the banks had about P3.2 billion in microfinance loans to over half a million small entrepreneurs.

            Buenaventura gave no indication whether in his assessment whether he has reached his destination.  I myself think his journey, serendipitous or not, still has many miles to go.  Paeng’s life energy does not at all appear spent.  Recently, he got on my one-seater kayak and by the sheer power of his heart and arms, rowed out to sea, all  by himself, just like a boy having the time of his life.  As he told his colleagues at the BSP, when he turned over his duties to Tetangco, he is looking forward to the best of times.