Philippines, Japan sign currency swap

The Philippines can swap as much as $6 billion of its local currency with the Bank of Japan while Japan's finance minister can draw up to $500 million from the Philippine central bank, the central bank said in a statement in Manila.

The deal replaces a smaller agreement from 2001. The Philippines is seeking as much as $9 billion of currency swap agreements with Japan, South Korea and China, as part of the so-called Chiang Mai Initiative, the Philippine Daily Inquirer reported.

"The bigger size of the swap with Japan and its two way structure are further evidence of closer monetary and financial cooperation between the two countries under a regional framework," Amando Tetangco, Philippine central bank governor, said in a message from Hyderabad, India.

The previous deal let the Philippines draw as much as $3 billion from the Bank of Japan's reserves without providing a similar mechanism for Japan, the central bank said.