Bank of America Launches FX Services in the Philippines

Bank of America Eyes $300B Philippine FX Market

Bank of America has formally re-entered the Philippine foreign exchange (FX) market, with ambitious intentions to capture a piece of the Southeast Asian country's estimated $300 billion annual onshore currency sector.

“We do think we will be able to get a pretty good market share of that,” said Shah Jahan Abu Thahir, head of Southeast Asia Global Markets at Bank of America. Thahir, who is based in Singapore, stressed the potential for the country's FX market to expand. “We expect the nation's foreign exchange business to grow substantially over the next few years due to structural tailwinds driving further investments in the Philippines,” according to him.

Investment Fuels Growth

The resurrection of Bank of America's FX operations coincides with an increase in investment from global enterprises, outsourcing firms, and semiconductor manufacturers in the Philippines. The bank's Philippine country head, Vince Valdepeñas, emphasized the increased need for foreign currency services in these businesses.

This is a notable return for the US-based lender, which formerly provided FX and fixed-income services in the Philippines until the early 2000s before focussing on the American market.

Expansion Beyond FX: Fixed-Income Business

Bank of America is also planning to open a fixed-income business in Manila, first targeting international corporations and huge local businesses. This offering will eventually be extended to financial institutions like asset managers and insurers.

Bank of America brings the Philippines into line with its operations in neighboring Southeast Asian countries such as Singapore, Thailand, Indonesia, and Malaysia by offering services in fixed income, currencies, and commodities.

Economic Tailwinds Support Growth

The Philippine economy expanded by 6.3% in the second quarter of this year, boosted by increased consumer spending and the central bank's shift to monetary easing.

We perceive that the Philippine economy is performing nicely. Valdepeñas emphasized that this is a long-term investment as market liquidity increases.

Final Thoughts

The return of Bank of America to the Philippine FX market reflects increased confidence in the country's economic potential. With rising investment prospects and a steady growth rate, the Philippines provides an ideal ground for global financial firms to develop. This expansion not only benefits local sectors but also meshes with the country's larger drive for increased financial integration in Southeast Asia.