The Power of Yuan

MANILA, Philippines - Ever since China asserted its buying muscles, the rest of the world pretty much stopped wondering about how its pipsqueak economy 20 years back managed to transition to a roaring offshore/outsourced trade in almost everything.


So you want to do some business, dutifully learnt your Mandarin, and now you want proper credit recognized wherever you go in China. While the US dollar is still universally acknowledged as buying/trading currency, the yuan is actually oiling the gears that make the world go round.


Enter China UnionPay, the most widely used credit card in the world’s second largest economy. In 2010, it entered into synergistic partnerships with local banks with strong Fil-Chinese links such as the Yuchengco-owned RCBC and, more notably, BDO, considered one of the cornerstones of the Sy empire. That it is specifically an Asian product made for the region (with an eye on global expansion) appealed to the Banco de Oro executives. Accepted in over 100 countries worldwide, with access to 1.02 million ATM terminals, the BDO-China UnionPay card will allow consumers to do business abroad and yet be able to conveniently pay their bills at various BDO branches, SM Department Store outlets, online banking or through phone banking. Gold cards will have a minimum P100,000 credit limit and a cash advance limit of 30 percent, while Diamond cards will have a minimum of P500,000 and a cash advance limit of 50 percent. In the Philippines, BDO UnionPay cardholders can use MegaLink, BancNet or ExpressNet partner ATM terminals for cash advances.

With over 30,000 local merchants accepting the UnionPay card in the Philippines, and just over a million UnionPay cards issued to users worldwide, it can mean almost-unencumbered spending power for Chinese expats or tourists as they vacation and do business here, while Filipino businessmen will find it convenient to carry the BDO-CUP card as a universally accepted mode of credit from Shenzhen to Shanghai to Beijing and beyond. Or as BDO’s head Tessie Sy Coson explains: “It’s another circuit, but more Asian.”

Creating Synergy

No wonder Chinese Ambassador Liu Jianchao was enthusiastic in helping negotiate the agreement with CUP and BDO (which would be the first to issue and acquire UnionPay cards in the country, delivering a whole range of uses for the card), calling it a “wonderful collaboration between people” and joking at the launch that he was patiently waiting for his own BDO-CUP card, to the delight of UnionPay officers who had arrived Efrom China as well as the assembled BDO executives. The newly-minted partnership with UnionPay makes this the fifth such collaboration for BDO, which already has other working relationships with Visa, MasterCard, JCB and American Express.

The BDO UnionPay cards are equipped with security features like the use of a PIN (personal identification number) that will deter fraud and ensure smooth transactions for the cardholder. Membership fees will be waived for the first three years, after which P2,000 and P5,000 will be collected respectively for the gold and diamond cards. A reward or point system also gives incentives for frequent purchases. Filipino or Chinese entrepreneurs can now fearlessly do business in either country, or take a vacation without financial worries.

“We have to make better bottom lines in order to survive,” says Tessie Sy Coson. While they’re still studying their possible moves into the region, they’re currently focusing their energy on strengthening their performance and presence—which means making sure there are increments in their revenue or bottom line, otherwise they’ll just be backsliding. But with their presence quite marked by their ownership of the tall twin buildings straddling De La Rosa Street in Salcedo Village (formerly PCI Bank, before becoming Equitable-PCI, then BDO’s property) across the Mandarin Oriental, as well as BDO branches being as ubiquitous as a 7-Eleven store.

UnionPay has nothing but high hopes for their product, considering the exponential growth in the use of their product since it was introduced to the Philippines. The current conservative estimate of Chinese travelers to our country averages anywhere between 200,000 to 300,000 a year, with the numbers increasing incrementally as traders increasingly do business in the country. Their cards have been recognized by local merchants before the BDO partnership and it is their acceptance by many establishments that makes it appealing for other businessmen and travelers from the region (such as Japan and Korea) to use it in the Philippines.

“We will make sure that the BDO UnionPay card will be welcome not only in the Philippines and China, but in HongKong, Singapore, Europe and the U.S. as well,” so goes the translated opening remarks of Cai Jianbo, the First VP of China UnionPay. This convenient means of paying for purchases anywhere in the region will have the Philippine peso being able to use the strength of the Chinese yuan, and if wielded wisely, this form of credit will hopefully spell less woes and more opportunities for profit-seeking businessmen on both sides.

source: manila bulletin