Former World Bank leader Gautam Kaji, friend of the Philippines

By: Gautam Kaji, Romeo Bernardo, World Bank - @inquirerdotnet

Philippine Daily Inquirer / 02:05 AM August 23, 2026

 

 

Gautam Kaji (1941 to 2026) —CONTRIBUTED PHOTO

MANILA, Philippines — Gautam Kaji served as the World Bank’s vice president for East Asia and the Pacific from 1991 to 1994, and as country director from 1984 to 1991, both positions covering the Philippines. The country had endured severe economic problems, culminating in a debt crisis in 1983. Nearly a decade of effort was needed before it regained access to international capital markets in 1992, followed by recovery and further reform in 1993 to 1995.

 

Gautam’s strong leadership, strategic thinking and decisiveness made a vital difference to the country’s fortunes.

 

He remained a close friend of the Philippines and won the admiration and affection of the country’s leadership and people.

 

Gautam was the key World Bank official responsible for the Philippines’ program during these years. Driven by a heavy budget deficit and debt buildup, the 1980s saw an economic downturn and austerity measures associated with International Monetary Fund programs. Power shortages and brownouts depicted an energy crunch. There were also devastating disasters: a prolonged drought and a massive earthquake in Central Luzon in 1990; the eruption of Mount Pinatubo in Central Luzon and the Ormoc floods in Leyte in 1991. And it featured a presidential transition from Corazon Aquino to Fidel Ramos in 1992.

 

Gautam was instrumental in mobilizing financial support from multilateral, bilateral and commercial sources under the Consultative Group for the Philippines that he chaired. In all these, Gautam valued economic analysis, and was delighted when, on the Philippines’ becoming a “Brady Plan” country, the technical work for debt rearrangements, including the private sector, was done well. That time saw the graduation of the Philippines from debt moratorium, political upheaval, structural reform and a return to capital markets.

 

Gautam’s sharp mind, political savvy and power of persuasiveness played no small role in the country’s return to voluntary capital markets—with a US dollar-denominated bond issue in 1992.

 

Gautam’s passing on Aug. 14 in McLean, Virginia, marked the loss of an extraordinary leader, a distinguished World Bank executive and a generous colleague, mentor and friend. Palpable in all he did was a genuine empathy for the countries and for his colleagues. In the mission to improve people’s lives, he had a unique ability to cut through complexity and focus on what mattered. And he did it with integrity, guided by the courage of his convictions.

 

Gautam was born in Mumbai, India, and received early grounding in commerce and finance before pursuing business studies at the Wharton School of Finance at the University of Pennsylvania. He then spent three decades at the World Bank in assignments that took him across regions. From 1994, he served as a managing director until his retirement in 1997. He was an excellent judge of talent and knew how to utilize people’s capabilities.

 

Gautam had a deep engagement with East Asia’s transformation and with the tough policy choices that accompanied rapid economic growth. He had a clear sense of the vital role of infrastructure investment and finance in generating opportunities. Equally, he believed sustained progress depended on narrowing the gaps in education, health, as well as the environment.

 

World Bank’s lending to the Philippines in the early 1990s included an economic integration loan, a rural finance project and crucial financing for investment and reform in energy. Gautam led these interventions with a distinctive style. Whether speaking with President Fidel Ramos, Prime Minister Cesar Virata, Finance Secretaries Roberto de Ocampo and Ernest Leung, or Olongapo City Mayor Richard Gordon, he was direct, candid and pragmatic. He engaged warmly with business leaders, academics and staff, listening intently while never hesitating to speak his mind.

 

That combination of candor and warmth earned him the respect of governments and colleagues alike. As Finance Secretary Jesus Estanislao once remarked to his colleagues, “He is a man with a good, big heart.”

 

Gautam’s international influence extended well beyond the World Bank. Through the Centennial Group and the Emerging Markets Forum, where he served as chair, he continued to champion practical, thoughtful solutions to the evolving challenges facing emerging economies, including the Philippines. He also remained active in the private sector, serving as a director of India’s IDFC and Cabot Corp.

 

At his World Bank farewell in 1997, colleagues recalled his defining qualities: leadership, drive, decisiveness, clarity of purpose and an unwavering commitment to the countries and people. Many at the bank and country institutions—including the authors, one a young public servant seconded to the World Bank and the other a bank staff member—feel fortunate to have worked with him and learned from him. They remember his integrity, his courage and his resolve to stand by his principles. Gautam left the institution on his own terms, at a time of his own choosing.

 

Gautam’s legacy to the Philippines lies not only in the investment projects he helped shape or the billions of dollars he helped mobilize, but also in the people he inspired, the colleagues he mentored and his unwavering conviction that development must ultimately improve people’s lives. INQ

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(Romeo Bernardo is a Monetary Board member. He worked with Gautam Kaji when seconded to the World Bank from 1982 to 1990, and later as finance undersecretary from 1990 to 1996. Vinod Thomas is a distinguished fellow at AIM, who was senior vice president for independent evaluation at the World Bank and chief economist for East Asia with Gautam from 1991 to 1995. He is married to a Filipina, Leila Nepomuceno, and they have made the Philippines their home since retirement.)

A new BSP publication: Risk and Resilience in the Philippine Financial System

July 6, 2026 | 12:04 am

BusinessWorld Introspective By Romeo Bernardo

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I recently came across an interview with Mervyn King, former Governor of the Bank of England, in Central Banking magazine (“Mervyn King on his career and big ‘mistakes’,” Central Banking). Looking back on the Global Financial Crisis (GFC), he said that the problem was not only the scale of the threat facing major banks but also the lack of preparedness of authorities to deal with it. While recognizing the need for emergency intervention, he cautioned against treating massive public support as the primary answer to financial crises. Instead, he stressed the importance of building robust institutional frameworks beforehand to limit fiscal costs and make future crises more manageable.

King’s point resonated with me because countries like the Philippines cannot assume that vast fiscal resources will be available when a crisis hits. We therefore have to learn from crisis episodes and ensure that institutions do the hard work beforehand. This is what Risk and Resilience in the Philippine Financial System: How Much Has Changed? is about. The book examines how the Philippines has confronted successive episodes of financial stress over four decades and how each episode prompted reforms and gradually strengthened the country’s capacity to withstand future shocks.

HOW THE BOOK CAME TO BE

The idea started with a lecture. I had listened to Dr. Ramon Moreno talk about three American financial crises — the Savings and Loan debacle, the GFC, and the collapse of Silicon Valley Bank — and came away thinking: We need something like this for the Philippines. I suggested to Bangko Sentral ng Pilipinas (BSP) Governor Eli M. Remolona, Jr. that we commission a volume grounded in our own experience. He agreed. In his foreword, he puts it plainly: the story is “one of resilience built slowly and unevenly, but deliberately.” That accurately describes what the book delivers.

The book’s key contribution is preserving something that policy papers and staff reports cannot: the judgment behind the decisions. Former Prime Minister Cesar Virata and former Central Bank Governor Jaime Laya recount what it was like to manage the fallout from the 1981 Dewey Dee crisis: the panic, the improvisation, and the discovery that conventional tools weren’t working. Bancom insiders Walter Wassmer and Jose Querubin, now themselves Monetary Board members, describe the shock of watching a thriving institution collapse around them. These are not academic reconstructions but the recollections of people who were in the room.

The editors, Ramon Moreno and Veronica B. Bayangos, tie the episodes together in their overview chapter by tracking two threads across four decades: the country’s macro-financial buffers (reserves, debt sustainability, fiscal space) and recurring cycles of credit expansion and correction. What emerges is a picture of vulnerability that narrowed over time, unevenly and not always by design, but with enough cumulative effect to change how the system absorbed each successive shock.

The individual crisis chapters each bring something distinct. Justin Ray Angelo J. Fernandez and Governor Remolona use Minsky’s framework to show how the debt-led growth of the 1970s systematically narrowed the country’s margins of safety until the 1983 moratorium became inevitable, and then trace the painful decade it took to achieve real balance-sheet resolution through the Brady Plan. Johnny Noe E. Ravalo reframes the 1981 Dewey Dee default, less than one percent of outstanding private credit, as a textbook case of systemic contagion through liquidity interlinkages; his 10 action items for managing systemic risks read less like academic recommendations and more like an agenda for the next Financial Stability Coordination Council (FSCC) meeting.

Subsequent chapters show how resilience was built and tested across successive shocks. Diwa C. Guinigundo and Faith Christian Q. Cacnio trace the reforms that followed the Asian Financial Crisis, from inflation targeting and reserve accumulation to banking and exchange rate reforms, which proved decisive when the GFC arrived. As Dante B. Canlas, Hazel C. Parcon-Santos, and Jose Adlai M. Tancangco show, the BSP was then able to respond forcefully through monetary easing, liquidity support, and FX intervention. Ms. Bayangos, Zeno Ronald R. Abenoja, and Dennis D. Lapid document how a combination of fiscal-monetary coordination, regulatory forbearance, the FIST Act, and digitalization helped the system weather the pandemic, while Ms. Bayangos, Elisha G. Lirios, and Benjamin E. Radoc, Jr. examine smaller stress episodes that underscore the value of continued vigilance.

WHO SHOULD READ IT, AND WHERE THE WORK STILL LIES

The natural audience is policymakers and regulators, but the book has broader value than that. Educators will find case studies, rich with institutional detail and grounded in a developing-country context. Students of economics and finance will see that real-world crises are shaped as much by political economy, institutional history, and human error as by the models they study in class. Finance professionals working in the Philippine system will better understand why the rules they operate under exist — because every major regulation traces back to a crisis that exposed a gap. Too, the book is for the next generation, who have no memory of financial crises and may be inclined to assume, “this time is different.”

Any book that covers this much ground will raise more questions, which is part of its value. The comparative framing across episodes raises a natural next question: can we distill what we have learned into frameworks and tools that regulators can reach for before the next shock, rather than reconstruct them after it arrives? This points to the next stage work of building the operational architecture that would let the BSP and the FSCC turn these historical lessons into standing protocols and crisis simulations. Several things stand out as priorities:

1. Legislation that gives regulators the authority and flexibility to act quickly when systemic risks emerge outside traditional banking.

2. Stronger oversight of non-bank financial intermediaries, where risks increasingly migrate and where regulatory perimeters have not kept pace.

3. Preparedness for technology-driven risks, including those posed by artificial intelligence, which could amplify contagion or create entirely new channels of financial instability.

These are areas where the BSP, Congress, the Securities and Exchange Commission, Philippine Deposit Insurance Corp., and the Insurance Commission need to work together — and with industry.

WHY I AM WRITING THIS

Over the course of my career (two decades as a board director at BPI, public service up to Undersecretary at the Department of Finance, engagements with the IMF, World Bank, and ADB, years as an economist at GlobalSource Partners, and independent directorships across industries), I have learned that you do not build a resilient financial system by waiting for the next crisis to reveal what should have been done earlier. You build it by studying past episodes, talking about them, and doing the institutional work before the pressure is on.

That is what this book makes possible. It is a foundation. Now we need to build on it.

 

Romeo Bernardo is a member of the Monetary Board. The views herein do not necessarily reflect those of the Bangko Sentral. The entire book may be downloaded for free through this link: https://t.co/Dvv2DGjwTm

romeo.lopez.bernardo@gmail.com

Remarks of MBM Romy Bernardo at the RBAP anniversary

 

Remarks of MBM Romy Bernardo at the RBAP anniversary

"Shaping Tomorrow’s Rural Banks:

Resilient, Digital, and Locally Inclusive"

 

To the officers and members of the Rural Bankers Association of the Philippines, partners from the private sector, and friends in the rural banking community, maayong buntag sa tanan.

 

It is a pleasure to join you as we reflect on your theme, “Beyond Tradition: Shaping Tomorrow’s Rural Bank.”

 

When we discuss the future of banking, the conversation often centers on digitalization, artificial intelligence, and evolving customer expectations. Yet before we look ahead, it is worth asking a more fundamental question:

 

Why do rural banks continue to matter?

 

The answer is clear. Rural banks remain vital pillars of local economies. Across the country, 349 rural banks bring financial services closer to households, farmers, micro and small enterprises, and communities. Rural banks continue to offer a distinct strength: local knowledge and community relationships built over generations.

 

These strengths remain highly relevant today, but the environment in which rural banks operate is changing rapidly. Customers expect faster and more efficient services. Climate-related disruptions are becoming more frequent. Cyber threats are growing more sophisticated. And new players, like fintech firms, are reshaping the competitive landscape. In this environment, standing still is not an option.

 

So, let me ask you: How can rural banks build on their strengths while adapting to a changing world?

 

Allow me to share three core messages.

 

First, tomorrow’s rural bank must be strong and resilient.

 

Resilience is more than the ability to withstand shocks; it is the capacity to adapt and remain relevant. While the sector remains adequately capitalized and liquid, resilience cannot be measured by today’s numbers alone. It requires continuous investment in capital, governance, risk management, and people.

 

Second, tomorrow’s rural bank must be digital while remaining deeply human.

 

The question is no longer whether rural banks should digitalize, but how digitalization can strengthen the relationship-based model that has always distinguished rural banking. The real strength of rural banks has never been scale, but proximity. You understand your communities in ways that no algorithm can fully replicate.

 

The challenge is to combine that local knowledge with the convenience and efficiency that customers increasingly expect. At the same time, digitalization must be accompanied by strong safeguards, including cybersecurity investments, staff training, and consumer protection measures.

 

Third, tomorrow’s rural bank must remain inclusive and anchored in local impact.

 

Financial inclusion has always been at the heart of rural banking. Today, inclusion today is no longer measured simply by the number of accounts opened. It is about enabling people and businesses to save, invest, transact, manage risks, and grow.

 

Through initiatives such as the National Strategy for Financial Inclusion, Open Finance PH, and the Credit Risk Database Philippines, the BSP continues to support broader access to quality financial services. The potential of these initiatives combined with better data, stronger governance, and modern technology can make rural banks become even more powerful engines of inclusive growth.

 

So what does “Beyond Tradition” mean?

 

It means preserving the values that brought rural banks this far, trust, local knowledge, and commitment to community, while having the courage to evolve.

 

From the BSP’s perspective, going beyond tradition means fostering resilience while sustaining relevance. It means carefully balancing modernization with prudence, and innovation with sound governance.

 

Together, these principles will help us build a financial system that is safe and sound, innovative and inclusive, and capable of supporting sustainable growth for generations to come.

 

Maraming salamat po!

2026 BSP Corporate Governance Summit

2026 Corporate Governance Summit 

May 25 2026

BSP Assembly Hall 

Good morning.

Thank you, Prof. Restoy.

Your core message—that strong bank governance requires effective supervision and sound culture, not just regulation—resonates deeply in the Philippine context.

Nearly a decade ago, as DG Lyn would recall I spoke at a BSP-IFC conference on corporate governance and said that governance is about nurturing a culture of integrity, fairness, accountability, and transparency—from the Board down. That still holds. What your presentation reinforces is that major banking failures, from the GFC to more recent ones, weren’t just about weak risk management. They reflected deeper failures in culture and governance. As a wise man once said “ Corporate Governance is like air; you only notice it when it’s bad”.

The Philippines has a resilient banking system, but vulnerabilities remain—concentrated ownership, conglomerate structures, relationship-driven banking. These amplify risk when governance is weak. Regulatory compliance is not the same as soundness.
That’s why the BSP has been moving from a compliance-based to a more risk-based, judgment-driven supervisory approach. 

 

Boards are central to this. As I once quoted the SEC chair (Atty Tess Herbosa, here with us today): “Companies don’t fail, boards do.” Independence and diversity matter, but what really counts is competence, engagement, and the courage to challenge management. Without that, board oversight is superficial.

On your point about the Supervisory Risk Appetite Framework—we find this compelling.
The BSP has already embedded many SRAF elements through our Supervisory Assessment Framework and graduated enforcement policies: risk-based prioritization, structured supervisory judgment, proportionate escalation. Where we can go further is integrating these into a unified SRAF with an explicit Risk Appetite Statement, along the lines of the ECB or the Bank of Canada.


I’ve seen this evolution firsthand—two decades as a bank director before becoming a regulator.
When I first joined the BPI board, the Report of Examination felt like a compliance checklist.
Not very useful for a new director trying to understand the big picture.
Over time, under Gov. Say and then DG Nesting, the BSP shifted meaningfully—anchoring supervision on stress testing, ICAAP, and forward-looking risk assessment. That shift made governance decisions more grounded and more useful.

 

It’s not coincidence that the Philippines has had no major bank failure in over two decades.
Stringent supervision works. But it’s only half the equation—banks’ own governance must keep pace.

So let me close with three simple points.

One: supervision needs to go deeper—beyond compliance to actual behavior.

Two: boards need to be genuinely competent and engaged, not just structurally independent.

Three: supervisory actions must be consistent, risk-focused, and judgment-driven.

Financial stability rests on trust. Trust depends on how institutions are actually governed—not just on paper. Our job as regulators is to make sure standards mean something. The industry’s job is to treat governance as a strategic asset, not a box to check.

Thank you.

REMARKS FOR AMB RAPHAEL PERPETUO M. LOTILLA’S DESPEDIDA DINNER

REMARKS FOR AMB RAPHAEL PERPETUO M. LOTILLA’S DESPEDIDA DINNER 

When President Toti and I first reached out to Popo to ask when we might hold a proper despedida before he leaves for the Vatican, he characteristically demurred. He did not wish to be fussed over. He finally relented only when Toti offered to bundle it with our usual FEF dinner—thus no incremental fuel cost and no additional carbon damage, especially in these difficult times.

When I sent him the program, he replied with a simple request: could we keep the tribute toast and his response to no more than five minutes?

Knowing how impossible it is to compress into two and a half minutes the long list of what Popo has done for the nation—as a public servant and as a leader of FEF initiatives—I am sending these remarks in advance.

This is, incidentally, the second time Popo has spurned our attempts to recognize him.

The first was in 2012, when several of us on the Board—Chair Bobby, President Toti, Vice Simon, Bong Montes, and dear Gloria Tan Climaco—nominated him for Chief Justice of the Supreme Court. In a letter that became public, he modestly declined in favor of then–Senior Associate Justice Carpio, citing the importance of preserving long-standing succession tradition.

At the time, I wrote a column on why Popo belonged on the Court. I noted that he had become the gold standard for integrity. There was a story—perhaps apocryphal—that he stayed in UP student dormitory housing long after he had begun working, leaving only when he feared being evicted for overstaying. He moved to a small faculty walk-up apartment, which later led critics to joke, when he was Energy Secretary, that he could not fully appreciate high power costs because his electricity use qualified him for a subsidized lifeline rate. The joke, of course, said more about his simplicity than about his understanding of policy. ( http://romeobernardo.blogspot.com/2012/06/appointment-to-supreme-court.html)

In hindsight, it may be a good thing that he declined the Court. It allowed him to lead FEF advocacies that produced real, consequential reforms—and later to serve as Energy Secretary and, most recently, as DENR Secretary.

Working with President Toti and other partners, Popo helped unlock a path to liberalizing public utilities without Charter change, through legislation redefining public utilities under the Revised Public Services Act. This opened telecommunications, airports, and other key infrastructure to foreign investment and real competition. As Energy Secretary, he had the DOJ revisit the flawed view that renewable energy fell under constitutional foreign-ownership restrictions, clearing the way for massive inflows into solar and wind—exactly when the country needed them most.

These are only highlights of decades of service: as a law professor and legal scholar; as NEDA Undersecretary during the Ramos and Estrada administrations, helping push through the ODA Law, oil deregulation, and early water PPPs; as PSALM head and twice Energy Secretary, guiding the operationalization of EPIRA; and as an international public servant, including as a UN regional director. Over the years, government has repeatedly turned to him on UNCLOS and maritime issues.

Some have asked whether Popo is a devout Catholic—apparently an important qualification for his new post in the minds of some.

What I can say is this: I know him to be a good man—defined by kindness, humility, integrity, simplicity, and self-sacrifice. As close to a saint as one can reasonably expect in public life. He will feel very much at home in the Vatican.

Dear FEF Fellows and friends, please raise your glasses to honor the man of the hour, indeed a man for all seasons—our fellow Fellow and dear friend, the honorable (with a small “h”) Popo Lotilla. Mabuhay. Bene vobis.

My toast at FEF send off dinner in honor of his Excellency, Amb Raphael Perpetuo M Lotilla.

 Short version

My toast at FEF send off dinner in honor of his Excellency, 

Amb Raphael Perpetuo M Lotilla. 😊🍷

Dear fellow Fellows and Friends :

When FEF Pres. Calixto V. Chikiamco and i first proposed a despedida for Popo, he politely declined—until we assured him it would be bundled with our regular FEF dinner, with no additional fuel cost or carbon damage. 

This is, in fact, the second time he has resisted recognition: the first was when he declined a Supreme Court nomination out of humility and respect for tradition—proving that Popo’s instinct is always to serve, never to seek. After decades of public service, landmark reforms, and a lifestyle so austere it once qualified him for a subsidized electricity rate, the Vatican may be the only place left where he truly fits in.

Please raise your glasses to our fellow Fellow, a man for all seasons, the honorable—with a small “h”—his Excellency, Amb Popo Lotilla. Mabuhay!”  

( The one minute version .  The full version in Comments. )

MY REMARKS ON THE 80TH BDAY OF @Bobby De Ocampo AND BOOK LAUNCH (Feb 27, Manila Polo Club)

Good afternoon dear friends and admirers of the man of the hour ( and of all seasons ).

I have known Sir Bobby for almost half a century, as young long haired professionals in the World Bank in the last millennium.  I actually knew him much earlier, and was already a fan,  although he did not know me. When i first joined the staff of then Sec Fin Cesar Virata in the 70’s, i kept hearing about the youngest head of a government corporation, still in his twenties.  While he had a legitimate claim to fame for massive rural electrification as head of NEA,  what the source of envy of all was his squiring the Ann Curtis of the day.

Amina and I finally met in DC  together w his “Sweet Caroline”, and i immediately came to the conclusion that here was a man who follows his head and heart and not other body parts.

  I would see validation of this time and again in the many endeavors we’ve been together. 

He ran as President of the IMF WB Filipino Association, winning handily with the support of his campaign team led by Amina.  Though he would win the confidence and admiration Presidents, Ministers, Boards and Shareholders,  this will be in the only at large election he would ever win.   Our country’s loss.

He decided to go back to the Phl post EDSA to help contribute to nation  rebuilding in 1987 via DBP, eventually being appointed by Tita Cory as Chair and CEO.

I was already Finance Usec when PFVR tapped him to be Finance Sec where he would stay till the end of the Ramos Administration, reaping every award along the way including Finance Minister of the Year by Euromoney and Institutional Investor and  a number of other journals. 

And achieving milestones for the administration like -- highest tax to GDP ratio ever , record Privatization receipts ( Petron , BGC, PNB, MWSS PPP, PAL etc.) returning the Phl back to the international capital markets, working w Del Lazaro to bring the lights back on literally and figuratively as investors confidence was restored. Some of these stellar achievements are well covered in the book we are launching today .

All these  while winning golf championships— yes declaring his handicap honestly each time.  😉

(And by the way he continues to win golf trophies even if he is no longer Finance Sec, most unusual. )

And this is not the only unusual fact about Sir Bobby.  He is
the only Filipino to have been “knighted” thrice by 3 foreign governments : UK, France and the Vatican.  And while it has been said that “Once a king always a king”, for Sir Bobby, once a knight is not enough !

After we both left govt our paths continue to intertwine in one board or another. The one closest to our hearts is the one that pays us nothing-- the Foundation for Economic Freedom where he serves as our Chair. For those who don't know FEF -- we are a bunch of ex bureaucrats, academics, corporate executives pushing for good governance and market friendly reforms . Raging incrementalists we call ourselves . ). Several of the Fellows are here --
Sec @Gary Teves , Prof @Joseph Angeles Prof Nieves Confessor‬ , Pres @Ramon Garcia Jr  Jr‬  USec Chil Soriano , Atty @Ephyro Luis B Amatong ‪. Earlier President @Calixto Chikiamco was here.

Here’s to you Sir Bobby, on your 80th, on your  most consequential life in public service and business leadership,  and to our almost half a century of partnership and friendship.

Mabuhay! Live long and prosper -- maybe live long na lang , you've prospered more than enough! 🖖🏽😁