ASEAN+3 starts $120-B fund vs global shocks

A regional fund that seeks to safeguard member-countries against global economic shocks came into being on Wednesday, allowing states facing liquidity problems to access the $120-billion fund. "The successful launch of the The Chiang Mai initiative multilateralization… demonstrates the solid commitments and concerted efforts of ASEAN+3 members to further enhance regional capacity to safeguard against downside risks and challenges in the global economy," member-states said in a joint statement. ASEAN+3 comprises ASEAN members the Philippines, Indonesia, Thailand, Malaysia, Singapore, Vietnam, Cambodia, Myanmar, Brunei and Lao PDR, as well as China, Japan and South Korea. The fund seeks to address balance of payment and short-term liquidity problems in the region. It will provide financial support through currency swap transactions among its members in times of money supply lack. Each participant is entitled to swap its local currency with US dollars for an amount up to its contribution multiplied with its so-called purchasing multiplier. The initiative will also set up an independent regional surveillance unit. China, Japan and South Korea’s contribution made up 80 percent of the fund. China’s $38.4-billion contribution is almost a third of the total — $34.2 billion from mainland and $4.2 billion from Hong Kong. Japan contributed the same amount, while South Korea gave out $19.2 billion, or 16 percent. Indonesia, Thailand, Malaysia and Singapore each contributed $4.77 billion, while the Philippines provided $3.68 billion. Vietnam chipped in $1 billion, Cambodia $120 million, Myanmar $60 million, and Brunei and Lao PDR $30 million each. The Philippines can access as much as $9.2 billion in case it experiences liquidity problems. — Norman P. Aquino, GMANews.TV