BIZ BUZZ: PH, Japan renew swap deal
Filipino and Japanese monetary authorities are out to help each other meet their foreign exchange needs in the event of liquidity problems.
This was after the Bangko Sentral ng Pilipinas (BSP) and the Bank of Japan (BoJ) renewed their bilateral swap arrangement this year.
Under the two-way arrangement, the BSP can borrow up to $12 billion, or its equivalent in Japanese yen, from BOJ in case the Philippines’ dollars or other foreign currencies fall short of short-term obligations, such as payment for imports or foreign debts.
The BOJ, meanwhile, can borrow up to $500 million from the Philippines in the event Japan encounters similar problems.
The BSP said the size of the swap facility remains unchanged.
The BSP and BOJ have had this kind of agreement in place since 2001, but neither has drawn liquidity assistance from this mechanism.
