‘Binondo CB’ alive anew — GMA

The current stability of the peso is due mainly to the intervention of the so-called "Binondo central bank," Vice President Gloria Macapagal-Arroyo said yesterday.

The "Binondo central bank" is a shadowy group of Chinese-Filipino businessmen who engage in heavy foreign exchange trading in the informal or parallel market.

Arroyo said she has received reports that members of the group have been actively trading in dollars to prop up the sagging peso in the face of mounting speculative attacks on the local currency. But the effect of such trading would be merely artificial, Arroyo said.

"Until when can (they) sustain the market?" Arroyo asked, hinting that these businessmen stand to lose large sums of money in terms of foreign exchange.

"What we need are real reforms. It will start with the President’s resignation," she added.

The Binondo central bank is an informal or parallel foreign exchange market which started during the dollar crunch in the ’70s.

The Binondo central bank, so-called because most of the players were based in Binondo, offered an alternative source of dollars to businessmen who could not source foreign exchange needed for their importations.

It attained a semi-official status when then Trade and Industry Minister Roberto Ongpin utilized it to stabilize the unwieldy foreign exchange situation in the late ’70s and early ’80s.