A strategic management paper for Bank of China (Hongkong) Limited-Manila Branch/ Marc Bryan Kalinisan.

Thesis (M.A) -- Pamantasan ng Lungsod ng Maynila, 2024.

A strategic management paper presented to the faculty of PLM Business School - Graduate Program in partial fullfillment of the requirements for the Degree in Master of Business Administration

Includes bibliography and appendices.

Since its 2002 launch in the Philippincs, Bank of China (Hongkong) Limited - Manila
Branch (BOCMNL) has focused on bridging the financial gap between China and the
Philippines. Their mission includes Expanding trade and investment services for both
countries, offering a broader range of corporate and personal banking options and investing in
a system for renminbi (RMB) transfer, a key Chinese currency.

In 2019, a partnership between the People's Bank of China and Bangko Sentral ng
Pilipinas solidified Bank of China's position as the official RMB Clearing Bank for the
Philippincs. This move aimed to support the flourishing local RMB market, and it paid off,
with the Philippines leading Southeast Asia in RMB growth by 2020.

As the designated clearing bank, Bank of China Manila now offers essential RMB
services 1like remittance, liquidity support, foreign exchange, and even RMB banknotes to
participating local banks. This also grants them access to onshore CNY rates, expanding their
options beyond the traditional CNH rate. By facilitating smooth transactions with mainland
China counterparts, Bank of China Manila plays a crucial role in strengthening economic and
trade relations between the two countries, ultimately contributing to the development of both
the Philippines and China.

Driven by a commitment to fostering the Philippine economy, Bank of China seeks to
attract more Chinese investment across key sectors. By promoting the RMB as a settlement
currency, the bank actively collaborates with both Chinese and Philippine corporations and
SMEs.

This collaboration aims to forge strong partnerships, ultimately resulting in faster, more
efficient, and cost-effective trade and investment - a significant boost for the nation's growth.
This paper aims to develop a strategic framework that propels Bank of China Manila's
market share from its current 0.25% to a targeted 6% by 2026. The strategy will primarily focus
on expanding retail banking within the National Capital Region (NCR).

Financial projections indicate Bank of China Manila's capital position will remain
robust, exceeding the regulatory minimum of 10%. Strategic capital deployment prioritizes
supporting the Philippine economy's development. Since 2022, the bank has focused on
utilizing its capital primarily through loans, leveraging its unique access to both Chinese
players entering the Philippines and Philippine companies with high China engagement. This
approach capitalizes on its competitive advantage and aligns with its economic development
goals.

The Philippines shines brightly in the Asian cconomic landscape, attracting foreign
investment despite the pandemic's recovery phase. With a reaffirmed BBB+ sovereign rating
from S&P, the Bank remains open and vigilant to seize opportunities presented by rising
foreign investments and new market entrants. However, it will do so while maintaining a firm
grip on risk management.