BSP Governor Amando M. Tetangco, Jr. announced that the Monetary Board approved the inclusion of the Chinese Renminbi (RMB) in the official international reserves of the BSP effective 13 October 2016. The BSP may hold RMB as part of its Gross International Reserves (GIR) to ensure that the said currency is available to the banking system when needed. At present, the country’s GIR is held in various currencies, mainly the US dollar, International Monetary Fund (IMF) Special Drawing Rights (SDR), and gold.
In deciding to make the RMB Philippine reserve-eligible, the Monetary Board took into consideration the inclusion of the RMB effective 1 October 2016 in the basket of reserve currencies that determine the value of the IMF SDR and the rising economic and financial importance abroad of China that is expected to increase the use of the said currency.
The MB also took into consideration the country’s increasing economic linkages with China. Based on data from the Philippine Statistics Authority, Philippine exports to China rose by 7.9 percent from US$ 5.7 billion in 2010 to US$ 6.2 billion in 2015. In the first seven months of 2016, China ranked as the fourth largest destination of Philippine exports, with 10.2 percent share (US$ 3.2 billion) to total exports. Meanwhile, Philippine imports from China grew 2-1/2 times from US$ 4.6 billion in 2010 to US$ 11.5 billion in 2015. By 2013, China had become the biggest source of Philippine imports, and this continued in the first seven months of the year, with imports from China at 18.5 percent (US$ 8.4 billion) of total imports. In terms of tourist arrivals, data from the Department of Tourism show that in July 2016, China ranked as the second biggest visitor market for the Philippines, an improvement from its fourth place ranking in 2015.