MANILA, July 23 (Xinhua) -- The Philippines ranks first in Southeast Asia in terms of growth rate of renminbi (RMB) clearing volume, the Bank of China said on Thursday.
Citing data from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) network, the bank said that "as of June 30 (2020) the Philippines ranks first in Southeast Asia in terms of the growth rate of RMB clearing volume, ahead of countries like Singapore, Indonesia, and Malaysia."
The bank said the total volume of RMB cleared in the Philippines in 2020 is 302,511 million Chinese yuan, a 138 percent increase compared to last year's total of 127,234 million Chinese yuan.
Deng Jun, country head of Bank of China's Manila branch, said the growth can be attributed to the improved understanding of the currency by the local market.
"There is an increased awareness about the benefits from using RMB as a settlement and payment currency between China and the Philippines," he said.
Deng added that "more and more enterprises are finding that direct conversion of renminbi to peso, instead of converting it first to U.S. dollar, can help save on friction costs and hedge FX (foreign exchange) exposure risks."
Bank of China's Manila branch is the officially designated RMB clearing bank for the Philippines and a member of the Philippine RMB Trading Community (PRTC), a community of 14 banks with a mission of promoting direct peso-yuan exchange.
Since its establishment in 2018, the PRTC has enacted several initiatives that have helped grow the RMB market in the country. These include building the local RMB infrastructure as well as holding several local and international RMB market education sessions.
Looking to the future, Bank of China Manila expressed optimism about the future of RMB in the Philippines despite the economic slowdown brought on by the global coronavirus disease pandemic.
"Our confidence in the continuous growth in RMB clearing volume comes from the increasing trade volume between China and the Philippines," Deng said.
He said that "there are many upcoming investments from China to the Philippines that will be cleared in RMB. "We will continue to promote RMB as a payment and settlement currency for the trade and investment activities between the two countries by highlighting it as an efficient and cost-saving payment currency," he added.
Bank of China Manila's optimism extends to its outlook for the Philippine economy as well.
Deng voiced hope that the economy will start its recovery by the fourth quarter of this year and continue into the first half of 2021 under the new normal.
"As you may know, China's second-quarter GDP growth recovered to 3.2 percent after its GDP declined by 6.8 percent in the first quarter of 2020. A positive indication for all other countries on the road to recovery," he added.
SWIFT is the global provider of secure financial messaging services. It provides a network that enables financial institutions worldwide to send and receive information about financial transactions in a secure, standardized and reliable environment. Enditem