Bank of America relaunches FICC business in PHL

BANK of America (BofA) is relaunching its fixed-income, currencies and commodities (FICC) business in the Philippines.

“We’re planning to officially launch our FICC business tonight. It’s mainly because we see a lot of growth opportunities here in the Philippines,” BofA Country Executive for the Philippines Vincent P. Valdepeñas said at a media briefing on Thursday.

“It’s an interesting opportunity for us to now complete the offering in Manila. The final piece of the puzzle to complete the offering to our clients will be the FICC business,” BofA Head of Global Markets for Southeast Asia Shah Jahan Abu Thahir said.

BofA previously had FICC offerings in the Philippines in the early 2000s. Mr. Valdepeñas said the decision to relaunch the FICC business came amid the country’s resilient growth performance as well as strong investor interest in the services, semiconductors and renewable energy sectors.

“I think those are the key thematics that will probably drive the growth of the Philippines. And we do see this opportunity, not just on these thematics, but the government also trying to improve the liquidity on the FX (foreign exchange) and the bond market space,” he added.

BofA will first begin offering FX services before eventually delivering fixed-income products.

“This is going to be a phased approach. We’re starting with FX and then we’re going to start developing the fixed income and all the other products within the fixed-income world such as securities as we continue to invest and the market continues to develop and grow here,” Mr. Thahir said.

“There are many multinationals who operate in the Philippines. There is a great opportunity for us to take a bit of that market share,” Mr. Thahir said.

BofA estimates show there is a potential total volume of FX conversion or hedging of about $300 billion annually.

Mr. Valdepeñas noted the strong demand for FX services in the country.

“We see a lot of our clients here in the Philippines and we want to be able to service them,” he said. “FX is a critical part of their day-to-day activities, down from payroll to hedging and all the operational expenses.”

For now, the bank will offer simple products and aims to gradually develop these depending on demand, officials said.

“For now, what we see is mostly on FX, spots and forwards,” Mr. Thahir said. “It will be a phased approach for us to build up the overall FICC capability in Manila, starting with FX.”

He added that the bank should be able to eventually offer more sophisticated instruments, such as options. “If there is a demand or requirement for that in this market, we will also do those things.”

The bank’s target clients include multinationals, large local corporates and financial institutions. — Luisa Maria Jacinta C. Jocson