By Joyce Pangco Pa?ares

BANGKOK?The Philippines is ready to contribute $3.5 billion to a currency swap fund aimed at boosting short-term liquidity in Southeast Asia, Finance Secretary Margarito Teves said here Monday.

?We are prepared to give our contribution to the fund,? Teves said.

?We will source the fund from our gross international reserves as a drawdown facility.?

The Philippines? gross international reserves have reached $36.9 billion as of the end of January, Bangko Sentral data show.

Finance ministers of the Association of Southeast Asian Nations and its partners Japan, Korea and China met in Phuket over the weekend to discuss the terms of the regional facility, also known as the Chiang Mai fund.

The officials agreed to increase the fund to $120 billion from $80 billion, with Japan, Korea and China shouldering 80 percent or $96 billion of the currency pool.

Malaysian Deputy Prime Minister Najib Razak said Malaysia, Thailand, Indonesia, the Philippines and Singapore would contribute $3.5 billion each, or about $17.5 billion, out of the $24 billion to be shouldered by the Asean member-countries.

Najib, who is also Malaysia?s finance minister, said the five countries, Asean?s original members, had agreed to contribute the same amount to the fund while Laos, Cambodia, Myanmar, Vietnam and Brunei would chip in whatever they could afford.

He said the fund would be operational after the Asean Finance Ministers Meeting in Bali, Indonesia, in early May.

?Asean and its three dialog partners agree that we will face a very serious world economic crisis, and therefore Asean needs to determine what is the response to tackle the worsening situation,? Najib said.

Teves said there was a need to ease the governing rules of the currency swap arrangement since the original initiative covered only balance-of-payments difficulties.

He said the new regional currency pool ?should also consider liquidity problems so as to include recapitalization of banks and the purchase of troubled assets.?

The Philippines was also pushing to increase the percentage of the fund that could be quickly disbursed to 50 percent from 20 percent, Teves said.

The purpose of the new fund is to allow a country in danger of falling into a foreign exchange crisis to rapidly call up financial firepower by swapping its currency for those of its neighbors.

The idea is to sell the borrowed money in the foreign exchange market to stem the pressure on the currency under attack, thus preventing a repeat of the 1997 Asian financial crisis.