THE Philippines and Japan renewed their bilateral swap arrangement (BSA) effective January 1, after it expired at the end of 2021.
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 Bank of Japan—acting as agent for Japan’s Minister of Finance—entered into partnership once again with the Bangko Sentral ng Pilipinas (BSP), as both signed the third amendment and restatement agreement of the third BSA.
First introduced as a one-way BSA in August 2001 which then developed into a second BSA under the CMIM in May 2006, the current 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 its peso against the yen.
The size of the BSA remains…
