Philippine President Rodrigo Duterte's decision to appoint a member of his administration to head the country's central bank is seen by some as politically motivated.
The Philippines' new central bank governor was sworn in Wednesday. But the appointment of Benjamin Diokno, a former member of Philippine President Rodrigo Duterte's administration, has some people worried.
It caught the public by surprise too. Diokno was not among the front-runners when Filipinos were discussing potential candidates who did not work in the central bank. The new central bank governor also defended his own appointment, saying that he's not a politician and his background in economics provides him the know-how of monetary policy regulation, according to the Philippine News Agency, the official newswire of the government.
Members in the Philippine House of Representatives have in recent months raised questions about the country's 2019 budget prepared under Diokno's watch, and accused him of favoring his relatives in government contracts. An investigation into the accusations was launched and remains unresolved, according to recent local media reports.
"The move raises questions about the politicisation" of the central bank, Alex Holmes, Emerging Asia economist at consultancy Capital Economics, wrote in a Tuesday report."The news does add to the catalogue of evidence that Duterte is willing to break norms and politicise ... institutions." Investors have shown their concerns: The Philippine peso weakened by nearly 1 percent against the U.S. dollar on Tuesday, following the Monday evening announcement of Diokno's appointment. The currency's slide against the greenback continued on Wednesday.
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