By: Nelljay Kahlil Tuppal
Intern, Research and Development
Institute of Corporate Directors
The Institute of Corporate Directors held its much-anticipated Induction Event last February 14, 2025, where prominent economist Romeo Bernardo delivered a keynote address to a distinguished audience of corporate leaders, governance experts, and policymakers. The event was graced by key ICD leaders such as Chairman Emeritus Dr. Jess Estanislao, FICD, widely regarded as the Father of Corporate Governance in the Philippines; Chairperson Atty. Dick du-Balabad, FICD; Vice Chairperson Imelda “Ida” Tiongson, FICD; and President Bing Matoto, FICD. Other notable guests included Honorary Fellow Ms. Corazon “Cora” dela Paz-Bernardo, FICD, and Philippine Chamber of Commerce and Industry Chairman Mr. George Barcelon.
Mr. Bernardo, in his speech, shared an overview of the Philippine economy, highlighting both the nation’s strengths and the emerging challenges. He aptly titled his address “Twists and Turns in the Year of the Snake”, drawing a parallel to the Chinese zodiac, symbolizing a year marked by unpredictability and geopolitical uncertainty. As the world enters 2025, Mr. Bernardo noted that, much like the snake, the year promises both hidden dangers and opportunities, with markets across the globe bracing for potential disruptions. “Much has already unfolded this early in 2025, and there are bound to be more twists and turns in the months ahead.”
In the first part of his keynote, Mr. Bernardo provided an in-depth situation analysis of the Philippine economy. He acknowledged that, while the Philippines has made significant strides in recent years, challenges remain. Key economic indicators such as inflation and GDP growth are showing positive trends, with inflation decreasing significantly from 8.7% in 2023 to 2.9% in January 2025, and the country’s GDP growth expected to exceed 6% in the next two years. “Headline inflation decreased from a peak of 8.7% in January 2023 to 2.9% in January this year.” These improvements are largely attributed to strong remittance inflows from Overseas Filipino Workers (OFWs), the resilient BPO sector, and the government’s continued focus on infrastructure development. “The growth story will continue to be driven by OFW remittances, BPO revenues, and the government's infrastructure program, which has been kept at 5-6% of GDP.”
However, despite these positive macroeconomic developments, Mr. Bernardo cautioned that the Philippine economy is not without its risks. “We also emerged from the pandemic having to face unprecedented geopolitical turmoil. The Russia-Ukraine war, the war in Gaza, and now Trump in the White House.” He highlighted the growing geopolitical fragmentation on the global stage, pointing to conflicts such as the Russia-Ukraine war and the ongoing tensions in Gaza, which continue to disrupt global trade and create uncertainty. Moreover, the specter of policy shifts under potential Trump 2.0 leadership and the US-China trade conflict presents added complexities for the global economy, and the Philippines could feel the ripple effects. “Perhaps the big question on everyone’s minds at the moment is just how far this trade war could go and how much of a blow this could be to the global economy and the Philippines.” The fear of tariff wars and supply chain disruptions further complicate the trade environment, as nations with closer ties to the US, like the Philippines, face new uncertainties about their economic positioning.
Mr. Bernardo also drew attention to the potential challenges posed by inflationary pressures and financial market volatility, noting that geopolitical shifts and global supply chain disruptions remain significant threats to stability. “Inflation expectations also remain within target.” Despite efforts by the Bangko Sentral ng Pilipinas (BSP) to reduce the policy rate in the past year, Mr. Bernardo stressed that the BSP must remain cautious and data-driven as it continues to calibrate monetary policy in response to the unpredictable global economic landscape. “The BSP is attentive to the risks to our inflation outlook, which are broadly balanced until 2026.”
With these risks on the horizon, Mr. Bernardo shifted focus to the central theme of his address: the role of corporate governance in ensuring that Philippine businesses remain resilient, agile, and competitive. “At the risk of bringing coal to Newcastle, let me share some of my thoughts on the role of the board and good corporate governance in the face of such heightened VUCA (volatility, uncertainty, complexity, and ambiguity) the likes of which we have not seen since the concept was introduced in the US Army War College in 1987.” He called on the members of the ICD to recognize that strong corporate governance is essential to navigating volatile and uncertain times, which is more relevant than ever in this VUCA environment. Drawing on his experience as an independent director, he emphasized three core principles that he believes should guide corporate governance in the years ahead.
The first principle was board composition. Mr. Bernardo emphasized that the responsibility for good governance starts at the top and that having diverse boards with a mix of backgrounds—in terms of gender, age, culture, education, and professional experience—is essential for long-term resilience. “Good corporate governance is ultimately the responsibility of the board.” He underscored that diverse leadership perspectives enable boards to better understand risks, challenge assumptions, and seize opportunities in times of disruption. “A diverse board is not just about representation. It is a matter of resilience.” Companies with dynamic and adaptable leadership are those most likely to endure, much like species that survive through adaptation, as famously observed by Darwin.
The second principle Mr. Bernardo outlined was culture. “Governance is more than compliance. For us, it is all about imbibing and nurturing a culture of integrity, fairness, accountability, and transparency cascaded from the Board, its management, and to all our employees.” Governance, he noted, is more than mere compliance with rules; it is about embedding values such as integrity, fairness, accountability, and transparency throughout an organization. He reflected on lessons learned from the Global Financial Crisis, where failed governance and unchecked conflicts of interest led to disastrous outcomes. “Without the right governance culture, even the best policies and structures will fall short.”
The third and final principle was risk management. In today’s rapidly changing landscape, Mr. Bernardo emphasized that corporate boards must continually update and strengthen their risk management frameworks to account for emerging threats such as geopolitical instability, cyber threats, and technological disruptions. “Risk management is at the heart of corporate governance for banks.” as he quoted Governor Tetangco. He noted that businesses that approach governance strategically—by embracing transparency and accountability—are best positioned to adapt and thrive in a world of uncertainty. “[W]e all need to upgrade our risk management systems commensurate [with] the heightened threats,” Mr. Bernardo added.
Concluding his address, Mr. Bernardo paid tribute to the ICD’s leadership in promoting corporate governance reforms in the Philippines, noting that the institute and its members have been at the forefront of creating stronger, more resilient corporate practices for the past two decades. “The choices we make today—who we bring to the table, how we structure our decision-making, and how we anticipate risks—will determine our ability to navigate the twists and turns ahead.” As the Year of the Snake unfolds, he expressed confidence that with strong governance, diverse leadership, and a steadfast commitment to resilience, Philippine businesses will not only survive but thrive, no matter the surprises the year may bring.
Mr. Romeo Bernardo’s keynote provided invaluable insights on the state of the Philippine economy and the crucial role of corporate governance in navigating the challenges ahead. His message resonated deeply with the members of the Institute of Corporate Directors, emphasizing the importance of good governance as a strategic imperative to ensure that companies remain agile, resilient, and competitive in the face of an increasingly unpredictable world.
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