Yuan trade soars 134% in 2020

The volume of Chinese yuan cleared in the Philippines more than doubled to CNY 447 billion last year from CNY 191 billion in 2019 boosting the currency diversification in the country.

Deng Jun, country head of Bank of China Manila, attributed the 133.8 percent jump in the volume of transactions to the growing confidence of tourists, traders and investors in using the currency in the local market.

“As we work towards growing the market even further, this establishment will help us provide more focused RMB services to all the local participating banks,” Deng said.

The Philippines continued to rank first in terms of growth rate of renminbi (RMB) clearing volume, ahead of countries like Singapore, Indonesia and Malaysia.

Data from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) network showed the Philippines ranked first in the region in terms of growth rate of RMB clearing volume this year.

BSP Governor Benjamin Diokno said the establishment of an RMB clearing bank in the country is an important step in the currency diversification of the local market.

“This opens up a lot of opportunities for local business in the easing of transactions and reducing the cost of settlement between Philippine and Chinese companies. As we further diversify the currency basket in the local market, we move towards an environment with more choice, and that is good for business,” Diokno said.

In support of a growing local RMB market, Bank of China Manila has been officially established as the RMB clearing bank of the Philippines.

Bank of China Manila can process the settlement of accounts and other core RMB services such as remittance, foreign exchange, liquidity support, and banknotes for the local participating banks. It can also provide local market participants with access to mainland China’s CNY onshore rates as an alternative to the more accessible CNH rate.

CNY is the RMB rate that can only be traded on-shore (in mainland China) or through clearing banks appointed by the People’s Bank of China internationally.

By making it easier to trade with counterparties in mainland China, Bank of China Manila can help improve the economic and trade partnership to promote development between Philippines and China.

Bank of China is China’s most international and diversified bank with operations in 61 countries and regions overseas where it provides a comprehensive range of financial services to customers.

It continues to pursue its mission of bridging Chinese and Philippine trade and investments through corporate banking, personal banking, and financial markets services, facilitating more Chinese investments in key sectors of the fast-growing economy.

– Lawrence Agcaoili