MANILA, Philippines — The demand for Chinese yuan or renminbi (RMB) among Philippine companies is increasing amid improving economic relations between Manila and Beijing.
Bank of China Ltd.-Manila branch country head Deng Jun said the establishment of the Philippine RMB Trading Community (PRTC) among 14 of the country’s biggest banks last October has made direct RMB exchanges easier for local businesses.
“The main goal of the PRTC is to facilitate direct conversion between the Chinese RMB and the Philippine peso. This lowers transaction costs and promotes the use of RMB to help Filipino businesses,” he said.
The organization of the PRTC is part of a three-stage plan to develop the domestic RMB services in the country. It serves as the precursor leading to the launch of the peso-RMB foreign exchange spot market.
The Philippines and China have enjoyed a long and storied relationship, be it in trade or in culture. Recent events show that we have now entered the golden age of China-Philippine relations.
Many see the growth of RMB use in the Philippines as a sign of increased trade and investments between the two nations. It is a testament to the strong and developing friendship between the Philippines and China.
More and more businesses from importers to real-estate developers and hotels are hedging their costs by opening RMB accounts.
Daiichi Properties Inc., whose developments have shaped the skylines of Ortigas Center and Bonifacio Global City, has seen a shift in its supply chain to China.
“As with many companies today, our materials and contractors are indirectly and directly from China. With the large amount of supplies we source from the mainland, settling in RMB has allowed us to be more efficient in our transactions,” Daiichi Properties president Salvador Uy said.
Ford Tractors Philippines Inc. (FTPI), importer and distributor of farming machinery, implements and spare parts, had sold over 2,000 units of the China-made tractor since introducing it to the Philippines more than 10 years ago.
“As a distributor of farming equipment, we seek to serve and empower the many Filipino farmers across the Philippines. And with our RMB transactions with our suppliers from China, we are able to enjoy increased savings and pass that on to our customers,” FTPI president Samuel Uy said.
Legend Hotel Palawan marketing director Chad Rosario said the hotel has also begun accepting payments in RMB to provide a better and more convenient customer experience for its Chinese guests.
“Foreign tourist influx to the Philippines, to Palawan specifically, has been increasing year on year. We wanted to capitalize on this opportunity by offering RMB payments to our guests. With Chinese tourist influx growing annually and more gateways opening, our hotels need to meet the increasing demands of our biggest Asian market,” Rosario said.
Bank of China sees transaction volume hitting over 10 billion RMB this year.