BANK of America on Thursday (Oct 17) started its foreign-exchange (FX) service in the Philippines, with officials saying they are looking to get a share of the annual onshore currency business of about US$300 billion in the South-east Asian nation.
“We do think we will be able to get a pretty good market share of that,” Shah Jahan Abu Thahir, the Singapore-based head of the bank’s South-east Asia Global Markets, said. He said the bank expects the nation’s overall foreign exchange business “to grow substantially over the next few years because of all the structural tailwinds for further investments in the Philippines”.
As investments from multinational companies, outsourcing firms and chip manufacturers grow, they will need additional foreign exchange services, Vince Valdepenas, the bank’s Philippine country head, said.
Bank of America offered foreign-exchange and fixed-income services in the Philippines until early 2000s, when it pulled out some of its businesses in the region to focus on the American market.
The US lender, one of the first foreign banks to set up shop in the South-east Asian nation, is also working on opening a fixed-income business in Manila, he said. It initially will cater to multinational firms and large local conglomerates before covering financial institutions including asset managers and insurers.
By offering fixed-income, currencies as well as commodities services in the Philippines, the nation joins other South-east Asian countries including Singapore, Thailand, Indonesia and Malaysia where Bank of America already has similar onshore businesses.
The Philippine economy grew 6.3 per cent in the second quarter and could expand further with consumption likely to be supported by the central bank’s pivot to monetary easing from August.
“We see the Philippines’ economy is still doing well. It’s an investment here because in the long run I think the markets are also improving in terms of liquidity,” Valdepenas said. BLOOMBERG
