RP, RI may trade in own currencies

RP, RI may trade in own currencies

MANILA (Bloomberg): The Philippines and Indonesia are studying using their own currencies, instead of dollars, in bilateral trade, Philippine President Joseph Estrada said Thursday.

Estrada, who met with Indonesian President B.J. Habibie after a state visit to Singapore Tuesday, said the "intra-currency" concept could help both countries preserve foreign reserves.

"We proposed that products produced by the Philippines and Indonesia and traded between our two countries won't use dollars anymore, so we can save our foreign currencies," Estrada said.

Because most Southeast Asian currencies weaken and strengthen together against the dollar, employing pesos or rupiah in bilateral trade would bring greater foreign exchange stability to regional commerce.

Estrada earlier proposed to the nine-member Association of Southeast Asian Nations, or ASEAN, using local currencies for trading within the region. The Philippines and Indonesia are founding members of ASEAN.

The Philippines and Malaysia, another ASEAN member, already have an agreement to settle some bilateral trades using their local currencies.

Indonesian Foreign Minister Ali Alatas said the adoption of the intra-currency concept could eventually lead to a single ASEAN currency along the lines of the Euro.

"We are talking in the long term when we are talking of the use of a single currency, like the Euro, in ASEAN" Alatas was quoted as saying in a statement issued by the Philippine government.

"This will take about two decades before it becomes a reality."