Cash management for multinationals

MANILA, Philippines - Bank of the Philippine Islands (BPI) and One Network Bank (ONB) have jointly established a cash management system that will benefit some of the country’s biggest manufacturers such as Pilipinas Shell, Nestle Philippines, Unilever Philippines, Coca-Cola Philippines, and Del Monte.

BPI president and chief executive officer Aurelio Luis R. Montinola III said during the formal signing of a memorandum of agreement that the partnership would benefit distributors of multinationals operating in Mindanao.

“This collaboration started with a simple objective of shortening the three-day check clearing between ONB customers – the distributors and suppliers located in the Mindanao region; and the BPI customers – the multinational companies (MNCs) based in Manila,” Montinola said.

Distributors and suppliers have to pay through checks their multinational principals in Manila to get their bulk supplies. That means a waiting time of at least three clearing days.

With the “intervention” of the two banking institutions, payments can be undertaken electronically, thus resulting in savings for the distributors.

“It is hard to measure the savings since these are too numerous, different values and volumes,” BPI officials said.

As an example, distributors of Nestle products in Mindanao issue a check for a bulk order and paid through ONB. The bulk order will only be released from the suppliers’ warehouse to the distributors, for example, when the checks are cleared by the Manila office.

With the cash management partnership, the transaction will be in real time.

Montinola explained that BPI and ONB are advocates of using technology in its banking activities.

“BPI’s online cash management solution called BPI Expresslink and ONB’s Business Online Banking (BOB) serves as the integrated electronic platform that will allow multinationals and large corporates and their respective distributors and suppliers to come together as a trading community through our internet and mobile platforms,” the chief executive said.

ONB is the largest rural bank with an extensive branch network in Mindanao nearing the 90 marks, and another expansion thrust in the Panay island. The distributors and suppliers of the multinationals use ONB for majority of their banking activities.

And the head officers of the multinationals based in Manila, are BPI customers. BPI has a nationwide branch network of over 800, and a recognized leader in banking innovation.

The alliance, between the two biggest banking institutions in their asset class, is likewise moving forward to establishing “a whole financial supply chain.”

“We help ensure that Mindanao will have increased trade and overall economic activity that will not only benefit Mindanao, but the rest of the country,” Montinola added.