The central banks of the Philippines and Japan on Friday signed the restatement of their third bilateral swap agreement (BSA), a stop-gap measure for short-term liquidity problems, after it expired this month.
In a statement, the BSP said it and the Bank of Japan, which acted as the agent for Japanese Finance Minister Taro Aro, signed the restated BSA, which also took effect Friday.
Similar to the third BSA, the restated agreement “enables the Philippines to swap its local currency against Japanese yen, in addition to US dollars of up to $12 billion equivalent for the Philippines and $500 million for Japan,” the BSP said.
“The authorities of both countries believe that the strengthened bilateral financial cooperation will contribute to the stability of financial markets, promote the use of local currency including the Japanese yen in Asia in the medium term, and thereby further develop growing economic and trade ties between the Philippines and Japan,” according to the BSP.
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During the meeting of Asean and Japan’s finance ministers and central bank governors in Yokohama, Japan last May, the Japanese government proposed to extend its BSA with the Philippines and other Asean countries.
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