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. )