PH, Japan renew currency swap deal

The Bangko Sentral ng Pilipinas (BSP) and Japan’s Ministry of Finance (MoF) renewed for the third time their bilateral swap agreement to firm up safety nets for addressing possible difficulties in short-term liquidity or balance of payments.

This is the latest iteration of the third currency swap deal between BSP and Japan MoF’s, which first expired in October 2017 and subsequently restated in the same month.

Having taken effect last Jan. 1, this “third amendment and restatement agreement” is a two-way arrangement where both parties can swap their local currencies—peso and yen, respectively—in exchange for the US dollar.

Also, the swap agreement enables the Philippines to exchange the Philippine peso against the Japanese yen.

“The size of the bilateral swap agreement remains unchanged, that is, up to $12 billion or its equivalent in Japanese yen for the Philippines, and $500 million for Japan,” they said in a joint statement issued on Tuesday.

Both countries believe that the swap agreement, “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,” they added.

The two partners said the deal incorporates amendments to align it with recent changes to the Chiang Mai Initiative. INQ