More banks to offer Chinese yuan transactions

MANILA, Philippines - More local banks have expressed interest to offer products and services denominated in Chinese yuan or renminbi to their clients in the near future as the volume of transactions continued to grow rapidly.

Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr. said more banks are looking to offer renminbi-denominated products and services due to the country’s strengthening partnership with China.

“Renminbi business is expected to grow in 2010 even further as more banks become acquainted with the business opportunities in the Chinese currency,” Tetangco stressed.

He cited the growing partnership between Manila and Beijing particularly in the areas of trade, tourism, education, agriculture and other economic sectors.

Data showed five local banks launched their renminbi deposit products in the last quarter of 2009. One of them registered a 10-fold increase in the volume of transactions in the last two months of last year.

The BSP chief pointed out that the settlement of renminbi banknotes in the Philippines amounted to 174.6 million Chinese yuan last year from only 0.5 million Chinese yuan in 2008.

In December 2006, the central bank’s Monetary Board approved the inclusion of the renminbi in the list of currencies convertible with the BSP.

In 2008, it provided direct conversion of the Chinese currency in recognition of its heightened role as the currency of choice for trade within the region.

The Chinese government has taken steps to boost the use of its currency among countries in the region as part of the broad aim to make the renminbi an “international currency.”

Chinese entities have since signed swap agreements with various counterparts in the region mainly for trade purposes.