THE Ministry of Finance (MOF) of Japan, through the Bank of Japan (BOJ), entered into partnership once again with the Bangko Sentral ng Pilipinas (BSP) to renew the third Bilateral Swap Agreement (BSA) between Japan and the Philippines beginning January 1, 2022, after it expired by the end of 2021.
An offshoot of the third BSA authorized in October 2014, the renewed BSA was formalized with the signing of the third Amendment and Restatement Agreement of the third BSA. This makes the latest arrangement consistent with the recent changes in the Chiang Mai Initiative Multilateralisation (CMIM).
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 current BSA enables both Japan and the Philippines to exchange their local currencies for the US Dollar and also the Philippines to swap the Philippine Peso for the Japanese Yen. The BSA is seen to help both countries by limiting foreign exchange risks in times of volatility and serving as liquidity buffer for future economic crises.
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