The Philippines and Japan renewed their currency swap agreement, which took effect on the first day of 2022.
In a statement, the Bangko Sentral ng Pilipinas (BSP) said it has signed the third Bilateral Exchange Agreement (BSA) amendment and reformulation agreement with the Bank of Japan, acting as the minister’s agent of Finance of Japan.
The central bank said the BSA is a bilateral agreement where the two authorities can exchange their local currencies for the US dollar.
The deal also allows the Philippines to exchange the Philippine peso for the Japanese yen, the BSP said.
He noted that the size of the BSA remains unchanged at up to $ 12 billion or its Japanese yen equivalent for the Philippines, and $ 500 million for Japan.
The renewed BSA incorporates changes to align the BSA with recent changes to the Chiang Mai Initiative Multilateralization Agreement (CMIM).
The Chiang Mai Initiative Multilateralization is a multilateral currency exchange agreement between members of the Association of Southeast Asian Nations (ASEAN) +3, which entered into force in March 2020.
The main objectives of CMIM are to resolve short-term balance of payments and liquidity issues in the ASEAN + 3 region, and to complement existing international financial agreements.
The contracting parties to the CMIM Agreement include the Ministries of Finance and Central Banks of ASEAN + 3 countries, namely Brunei Darussalam, Cambodia, China, Indonesia, Japan, Korea, Lao PDR, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam.
“Japan and the Philippines believe that the BSA, which aims to strengthen and complement other financial safety nets, will further deepen financial cooperation between the two countries and contribute to regional and global financial stability,” BSP said. . – Ted Cordero / RSJ, GMA News