Economy · Local-currency settlementASEAN local currency deal: Philippines joins expanded four-central-bank frameworkAired November 14, 2026 at 1:10 PM UTCWatchTranscript0:00ASEAN local currency deal.0:01Philippines joins expanded four central bank framework.0:07Four central banks have widened their local currency pact to include the0:10Philippines.0:11Businesses trading across these borders could gain more ways to pay while avoiding0:15repeated currency conversions.0:17The banks want lower costs and more flexibility in managing exchange, rate risk.0:21What can businesses actually use now?0:23And what still depends on putting this agreement into practice?0:26Malaysia, Indonesia, Thailand, and the Philippines signed the memorandum on0:30November13,2026 .0:32Their central banks will cooperate on settling transactions between participating0:36countries in local currencies, including trade, investment, and other eligible0:40payments.0:41The Philippine Central Bank joins a shared arrangement built on earlier cooperation0:44among the other three.0:45The agreement broadens that institutional framework.0:48Businesses will still depend on the banking services and currency routes available0:52to them.0:52Bank Indonesia Governor Destri Damayanti signed alongside Bank Nagara Malaysia0:56Governor Abdul Rashid Ghaffour.0:58Bank of Thailand, Governor Vaitai Ratakorn and Philippine Central Bank Governor Eli1:02M.1:02Rimelona, Junior, also signed.1:05The new memorandum replaces the bilateral agreements Indonesia, Malaysia, and1:09Thailand concluded in August2023 .1:11Those countries already had local currency channels.1:13The practical question is how the wider cooperation will translate into payment1:17choices, particularly for Philippine transactions.1:20A payments route can affect its cost.1:22Each conversion can bring a charge and expose the customer to another exchange rate.1:26The local currency transaction framework, usually called LCT, supports ways to price1:31and settle eligible business in the participating country's own money.1:34A Malaysian importer can use an appointed bank to convert ringit directly into1:37Rupiah, then pay an Indonesian exporter.1:40The exporter receives Rupaia without another conversion.1:43The earlier framework also illustrates the same route into Taibat.1:47That route describes an existing three country channel.1:49The banks haven't yet set out the complete Philippine arrangements under the new1:52pact, and direct conversion still leaves a moving exchange rate.1:56A customer's final fee depends on the terms the bank offers.1:59The earlier Malaysian offerings extend beyond immediate currency exchange.2:02Customers can arrange an exchange now, fix a rate for a future date, or use currency2:07swaps.2:07They can also obtain local currency trade and investment financing and deposit2:11accounts.2:12The listed uses include goods and services, direct investment, portfolio investment,2:16income and transfers.2:18Portfolio investment covers holdings such as shares and bonds.2:21Access depends on the eligible transaction and the bank handling it.2:24Subscribe to this channel as we follow which payment routes open and what businesses2:28actually pay.2:29Indonesia signed its initial cooperation with Malaysia and Thailand in2016, and2:33implementation began in2018 , after the August2023 agreements, the three banks2:38harmonized their operating guidelines in February2025 .2:41They added more appointed banks that August.2:44The February17 ,2025 changes brought the earlier bilateral rules into common2:48operating guidelines.2:49While allowing for each country's regulations, the banks sought more consistent,2:53transparent processes that could handle growth.2:56They also added portfolio investments alongside trade and direct investment.3:00The August5,2020 5 appointments expanded the Ringit Rupiah channel on both sides of3:04the border.3:05These qualified commercial banks, called appointed cross currency dealers, were3:09brought in to reach more customers and improve access to local currency funding.3:13The bank network is where a cooperation agreement becomes a service a customer can3:17use.3:17The20205 appointments covered three currency pairs among Malaysia, Indonesia and3:22Thailand.3:23The Ringgit BAT expansion included Malaysian banks and Bank of China Thai.3:27The aim was to give businesses more cross border options.3:30These appointments belonged to the earlier network.3:32Philippine banking access still needs its own operational detail.3:36For Rupia BAT transactions, Indonesia added Bank OCBC NIASP and Bank of China's Hong3:42Kong Bank through its Jakarta branch.3:44Bank of China Thai joined on the Thai side.3:46Those additions supported trade and investment settlement between the two countries.3:50An undated Malaysian fact sheet lists fourteen appointed dealers for its BAT channel3:54and twelve for its Rupiah channel.3:55Those figures describe that fact sheet's network.3:57They don't provide a current dealer count for the expanded four country agreement.4:01Indonesia's earlier local currency transactions reached fourteen point one billion4:05US dollars equivalent through July two thousand and twenty-five compared with six4:08point seven billion in the same period of two thousand and twenty-four.4:11Bank Indonesia put the year on year growth at one hundred and twelve percent.4:15Those dollar equivalents express the value of transactions settled in local4:19currencies.4:20The totals are rounded.4:21Indonesia's network then extended to six partner countries, so these figures cover a4:25wider, earlier system than the four country agreements signed now.4:29The fourteen point one billion dollars equivalent reached through July two thousand4:32and twenty-five amounted to eighty-seven percent of the previous full year's value.4:36Across all of two thousand and twenty-four, Indonesia's local currency transactions4:40had totaled sixteen point two eight billion dollars equivalent.4:43No country by country breakdown accompanied those totals.4:47They show substantial use before the signing, while leaving Philippine participation4:50and the new PAC's performance to be measured separately.4:53Monthly customers averaged five twenty in two thousand and twenty-four and seven,4:57five hundred sixty eight in the two thousand and twenty-five figures available that5:01September.5:01The later number was an in-year average.5:03It shows broader use of Indonesia's existing channels before the four bank5:07memorandum.5:08For businesses, the wider agreement offers the prospect of more ways to price5:12purchases, receive payments, and manage currency exposure.5:15Whether that produces meaningful savings depends on access and bank pricing.5:19The central banks haven't given a savings estimate or measured improvement in5:22settlement times for this agreement.5:24The four banks plan to keep developing and implementing the framework, expanding5:28local currency use gradually.5:29Businesses can already use established channels where available.5:32The next test is which additional transactions banks can execute, especially5:36involving the Philippines, and at what demonstrated cost.5:39The central banks haven't announced a dated rollout milestone for those new5:42arrangements.Story timelineHeyDex
