The Bangko Sentral ng Pilipinas (BSP) has signed a cross-border liquidity agreement with the Bank of Japan (BOJ) to collaborate on allowing eligible Japanese banks in the country to obtain the Philippine currency in exchange for the yen.
The BSP said in a statement on Friday the arrangement will widen the range of facilities available to eligible banks in the country, including Japanese banks.
Further details of the arrangement will be made public in due course, when the necessary preparations are completed, the BSP said.
“This collaboration reinforces the BOJ and BSP’s commitment to support the long-standing economic and financial relationship between Japan and the Philippines,” it said.
A private equities analyst said the BSP-BOJ cross-border liquidity deal demonstrates a vote of confidence in the way the economy is being managed.
“This indicates to me that Japanese investors are looking with heightened interest into the country and the agreement facilitates the realization of this interest by enhancing the flow of liquidity between the two countries,” Accord Capital Equities Corp. analyst Justino Calaycay, said.
doubled the limit to the currency it could exchange with the BOJ, under the third bilateral swap agreement signed as a shield against global financial market risks.
Under the agreement, the Philippines may swap currencies with Japan up to the equivalent of $12 billion, raising the limit from $6 billion, while Japan has set a swap limit of $500 million.