By Genevieve Cua

BANKER Jose Isidro (Lito) Camacho has something of an inkling of the mammoth challenge facing US Treasury Secretary Hank Paulson. As the Philippines' finance secretary from 2001 to 2003, Mr Camacho engineered a bank rescue.

'I can't say which one, but it would have created a systemic risk if not addressed,' he says. 'I had to work with the central bank to craft a package. I'm happy to say the bank is now reasonably well.

'We took a fair amount of not just government risk but personal risk. Had we not made the right decision, we would have had to answer for it. I take comfort that, as it turns out, we were right. We didn't create a panic.'

Mr Camacho is a seasoned banker - he is managing director and vice-chairman (Asia-Pacific) of Credit Suisse. Prior to his stint with the Philippine government, he was a banker of 25 years, rising to become chief country officer for Deutsche Bank and before that, head of investment banking for Bankers' Trust.

His relatively brief spell in public service was hardly just a pitstop. Members of his family served in government, which made him open to what he describes as a 'calling'.

'Did I see myself as a banker (when young)? Probably not,' he says. 'I thought more of a public service career, because I grew up in a family of public servers. I had a grandfather who was a governor or congressman of his province. I have an uncle who was a governor, a cousin who was mayor. My mother was also in public service.

'Public service is a calling. You should never say no too definitively or with permanency, because you never know the circumstances (in which you may be called). To me, it's an obligation. You owe it to society. I can provide public service now working for Credit Suisse, by participating in civic organisations, doing things to help others.'

Mr Camacho, who serves on the National Heritage Board in his free time, believes his stint as the Philippines' finance secretary, and before that, energy secretary, gave him a two-way perspective - as client and banker.

'The Philippines in my day was probably the second most active borrower next to Japan,' he says. 'So I've been a client of banks. I can share my experience so we can deal with clients with more sensitivity.'

Privatisation, for example, is typically a hot issue, with more ramifications than just selling an asset. Mr Camacho was chairman of the Philippines' privatisation council.

'I've had the opportunity to look at it not from the point of view of a banker, but from that of a seller and policymaker who has to answer to the public for every decision,' he says.

'A banker may push certain ideas, not recognising that a government has many constituencies - the public, the congress, industry. These needs are more complicated than one may think. It's not just about selling an asset for the highest price.'

In fact, he looks to a particular privatisation effort - that of the Philippines' biggest power company, National Power Corp, which is still in the works - as one of his most rewarding experiences.

'I was the main proponent in shepherding the legislation now being implemented in the power sector, the restructuring and deregulation of the industry,' he says. 'It was something so dramatic in transforming the Philippine economy. That's still happening as we speak. It's an experience that gave me a crash course on governance, government and policymaking. I had to deal with congress, the media, NGOs (non-governmental organisations), the public, the Cabinet, the international community.'

Another initiative he was involved in was an effort to stamp out the corruption that has long gnawed at the fibre of Philippine business and society. He formed the Revenue Integrity Protection Service to serve as the investigative arm of the Finance Department. The group does lifestyle checks on officials of agencies under the Finance Department, and helped to craft policies to tackle corruption.

'Corruption is a sickness that takes generations to address. It's a sickness which, when allowed to flourish over generations, becomes much more difficult to tackle. It's self-fulfilling,' says Mr Camacho.

'If you're a business person in an environment where corruption exists, just to be competitive, you might feel you have to live with the system. That's partly the problem.

'One almost has to say, I'm willing to make a sacrifice to fight corruption, whether it's to expose a corrupt official or stop paying bribes. It starts with an individual saying, 'I'm not going to live with that'. You have to be the example. I think that's the only way to fight corruption.

'One thing you don't do is to get so frustrated that you stop. Because that's what happens to all of us as individuals. You say you can't fight it anyway, just live with it. Therefore, we fail. That's the problem. You can't get frustrated. You have to keep fighting.'

Mr Camacho has high hopes for Asia, which, he says, has come a long way since the 1998 financial crisis. Despite an impending slowdown and the spillover effect of global financial turmoil, he believes that the decoupling theory is not dead.

'The current crisis slows Asia down, surely. Will it slow down some reforms? Yes, but we're a lot better off,' he says. 'We're talking about China slowing from 11 per cent to about 9 per cent, while Europe is about to go into a recession. Asia will perform better than the rest of the world.'

With exports taking a back seat, Asia's domestic consumers will have to step up to the plate to provide a growth engine, says Mr Camacho.

And solving the current financial crisis will require 'a convergence' of different measures, including central banks keeping interest rates low.

When the dust eventually settles, he expects more regulations to ensue. 'Markets have evolved so much that regulations, in some cases drawn up long ago, are no longer capable of regulating,' he says. 'Now, we have sectors that are totally unregulated, with no licensing, no disclosure. But I hope things don't swing so far that regulations become an obstacle to energising the market.'

This article was first published in The Business Times on October 08, 2008.