Japanese ambassador pays courtesy call on BSP guv

Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno (left) and Japanese Ambassador to Manila Koshikawa Kazuhiko discussed economic cooperation initiatives during the diplomat’s recent courtesy call at the BSP head office in Manila.

Their meeting tackled bilateral agreements^[1] between the BSP and the Bank of Japan; the establishment of a Philippine Peso-Japanese Yen Direct Settlement Framework; and the development of a credit risk database for small and medium enterprises.

Governor Diokno looks forward to further enhancing economic relations between Manila and Tokyo.

These are the bilateral swap arrangement (BSA) and the cross-border liquidity arrangement (CBLA).

The BSA, which was signed on 5 October 2020, is a two-way swap facility designed to provide short-term liquidity support to the Philippines and Japan in the event of balance of payments (BOP) difficulty. It is effective until 31 December 2021. Under the BSA, the BSP can draw up to USD12 billion or its equivalent in Japanese Yen while Japan can draw up to USD500 million.

The BSP and BOJ established a CBLA in 2016 to provide a framework wherein the BSP, during emergency situations, will provide Philippine peso liquidity to banks operating in the Philippines, whether Filipino-owned or otherwise, against said banks’ Japanese Yen currencies.