MANILA -- A ranking Bangko Sentral ng Pilipinas (BSP) official said monetary officials are open to the creation of additional Peso-foreign currency trading platforms to ease business transactions by skipping the use of the US dollar as an intermediate currency.
In a briefing after the signing of the memorandum of agreement (MOA) among 14 banks for the establishment of the Philippine RMB Trading Community on Tuesday, BSP Deputy Governor Chuchi Fonacier said the formation of more trading platforms depends on a particular demand or an economic need.
Asked if there have been requests for the setting up of another trading platform, the central bank official said there has been none yet. “But I think they’re open to having another currency pair for a trading platform,” she said.
Fonacier said it is the banks that will decide with whom to partner with while the BSP will simply be an overseer and will review if the group’s rules are aligned with existing laws. “We’ll take a look at their agreements, business rules, business conventions and, of course, the code of conduct,” she said.
The central bank official said the BSP provides for an “enabling environment for the industry to be developed and for foreign exchange activities to be regulated, as well.” “We have (foreign exchange) liberalization but regulated in the sense that we need to be the ultimate overseer of the fx (foreign exchange) market as what is mandated under fx rules of the BSP,” she said.
Meanwhile, after Tuesday’s MOA signing, Bank of China Manila Country head Deng Jun said the RMB trading platform will be launched in November. He said he is optimistic about the Philippine Renminbi (RMB) Trading Community as he projects local RMB transaction to exceed 10 billion RMB this 2018.
“The Philippine RMB Trading Community will likely lead to increased direct trade between Chinese and Philippine businesses because there will be no need to first exchange Philippine pesos to US dollars for conversion to Chinese RMB,” he said.
“With the improved relations between our two countries, local companies are expected to benefit greatly with the establishment of the Philippine RMB Trading Community,” he said, noting that this will also benefit Chinese tourists visiting the Philippines.
BDO Unibank Inc. (BDO) President and CEO Nestor V. Tan said the vision for the TRM Trading Community is “to have a governing body.” “We need to have critical mass to oversee the governing body with BSP as oversight. I guess it’s a matter of need,” he said.
“The objective is for the governing body to be properly organized, efficient, transparent, and predictable,” he added.
Finance Secretary Carlos Dominguez said this is a timely development, given the deepening relations between the Philippines and China. He said the renewed ties have opened a lot of doors for investors, pointing out that President Rodrigo Duterte’s policy is not to focus on issues. “This is the time to build up trade, tourism before we address contentious issues,” he added.
The trading platform consists of several banks, among them the Bank of China Manila, Asia United Bank, Bank of Commerce, Bank of the Philippine Island, BDO, China Banking Corp., Philippine Bank of Communications, Philippine National Bank, Rizal Commercial Banking Corp., Security Bank Corp., and Union Bank of the Philippines. (PNA)
