In support of a growing local renminbi (RMB) market, Bank of China Manila has been officially established as the RMB Clearing Bank of the Philippines. This comes following the initial memorandum of understanding signed by the People’s Bank of China and the BangkoSentral ng Pilipinas in 2018.
As the designated clearing bank for RMB business in 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 PBOC 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.
“We’ve seen tourists, traders, and investors grow more confident in using the currency in the local market,” said Deng Jun. “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.” He further thanked the People’s Bank of China and the BangkoSentral ng Pilipinas for their great support and guidance in establishing the RMB Clearing Bank in the Philippines.
The Philippines is one of the fastest growing RMB markets in Southeast Asia. In June 2020 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, ahead of countries like Singapore, Indonesia, and Malaysia.