THE Bangko Sentral ng Pilipinas (BSP) announced on Tuesday that the Philippines has renewed its bilateral swap agreement with Japan.
In a statement, the BSP said the renewed Bilateral Swap Arrangement (BSA) will be effective January 1, 2022.
The BSA is a two-way arrangement where both authorities can swap their local currencies in exchange for the US Dollar.
The arrangement also enables the Philippines to swap the Philippine Peso against the Japanese Yen.
“The Bank of Japan, acting as agent for the Minister of Finance of Japan, and the Bangko Sentral ng Pilipinas signed the third Amendment and Restatement Agreement of the Third BSA,” the BSP said.
The size of the BSA remains unchanged, that is, up to $12 billion or its equivalent in Japanese Yen for the Philippines, and $500 million for Japan.
The BSP said the renewed BSA incorporates amendments to align the BSA with the recent amendments to the Chiang Mai Initiative Multilateralization (CMIM) Agreement.
“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,” the BSP said.
The Japan-Philippines BSA was first launched as a one-way BSA in August 2001 which then developed into a two-way, second BSA under the CMIM in May 2006.
“The BSA is seen to help both countries by limiting foreign exchange risks in times of volatility and serving as a liquidity buffer for future economic crises,” the embassy of Japan said.