Cruz resignation not due to conflict over policies

By Des Ferriols
The Philippine Star 04/26/2007

National Treasurer Omar Cruz and Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. denied reports that conflicts over policies precipitated Cruz’ decision to resign from the Bureau of the Treasury (BTr).

Cruz’s resignation was accepted by President Arroyo yesterday and Finance Secretary Margarito B. Teves said the process is underway to look for a replacement.

Cruz called a press conference yesterday shortly after getting the official word that his resignation has been accepted, brushing aside speculations that he was leaving the BTr for anything other than "personal and family reasons."

According to Cruz, he has already attempted to resign once before also for personal reasons made even urgent this time around by his 84-year-old mother who was gravely ill.

"My mother is dying, I want to go to her," Cruz said.

Beyond personal concerns, however, Cruz expressed satisfaction that he has completed his tasks at the BTr, adding that it should be easier to take over the treasury now that reforms have been institutionalized.

"I’ve already achieved what I set out to achieve," he said. "We have established the process and institutionalized the reforms that it really doesn’t matter who is treasurer."

Cruz said the timing of his resignation was appropriate, having already completed the government’s commercial borrowing as early as January as well as the bond swaps that cleaned up the yield curve on the country’s bond portfolio.

"There really is very little left for me to do other than continue what we have institutionalized at the BTr," he said.

Cruz said the BTr was setup to keep a tight grip on the country’s debt portfolio, timing future swaps when the yield curve gets dirty and require cleaning up.

"It’s already a program that is continuing, none of the efforts that we do is a one-time thing," he said. "It’s all strategy-related and program oriented. As a result, we have established six benchmarks and very deep ones at that."

"I have come to the time of my career when I can already let go and I find great comfort in the fact that the coaching and mentoring that I have provided my team has been satisfactory," he added.

Amid speculations that the policy conflict was raging between the BTr and the BSP, Tetangco said only that Cruz "has been doing a great job as National Treasurer."

"In fact he continues to do an excellent job and finding a replacement would be a challenge," Tetangco said. "Omar has been successful in establishing good relations with the market and in managing the National Government’s finances."

Cruz brushed aside reports that he was at loggerheads with the BSP over the drop in the benchmark interest rates to historic lows, a development that made it cheaper for the National Government to services is debts but also resulted in huge loss of business for investors who depended on high Treasury bill (T-bill) rates.

"There are no policy differences between me and the BSP, it’s impossible," he said. "In the first place, fiscal management is independent from monetary policy."

"Monetary authorities are entitled to their own view on monetary policies and whatever that is, it is my job to simply spot the market," he explained.

Cruz said he was not personally making any recommendation for his replacement, however, saying that it would be up to Teves and the President to make the selection.

"Its not my call. At the end of the day the President and the Secretary (Teves) would have to make a judgment call."

Cruz, well respected by the market for his deft management of the national government’s debt portfolio, has also been blamed losses that resulted in a decline in interest rates.

But Cruz said interest rates were market-driven anyway and the narrowing of the profit margin in that market merely moved liquidity from the government securities market to fixed income instruments and the equities market.

"I don’t think anyone would be asking for my head because of that," he said. "If you’re the right kind of investor, you should be getting a much higher return by now, simply by shifting your funds from one part of the market to the other."

Cruz’ resignation will take effect on June 1 and he said he would be spending much of his time with his family, especially with his gravely-ill mother.

Cruz said he has not considered any specific career options but after leaving government service, he said his professional direction was more or less predictable.

"Once a market guy, always a market guy," he said.