MANILA, Aug. 31 (PNA) -- President Gloria Macapagal-Arroyo thanked Chairman Wu Bangguo, China's second most powerful leader, for the brotherly care that his country have shown to the Philippines and their efforts to strengthen and further stabilize the bilateral relations of both the Philippines and China.

The President issued the remarks during their 30-minute meeting Saturday night at Malacanang's Music Conference Room.

After the brief meeting, the President accompanied Chairman Wu and his delegation to the Palace Ceremonial Hall to witness the signing of the Bilateral Swap Agreement (BSA) and the Memorandum of Understanding regarding the Utilization of US$400 million Preferential Buyers Credit.

The BSA is an agreement made under the Chiangmai initiative that would enable the Bangko Sentral ng Pilipinas to swap Philippine pesos for Renminbi in the amount of up to US$1 billion in the event that an immediate need arises for balance of payments of short-term liquidity support.

BSP Governor Rafael Buenaventura signed the documents on behalf of the Philippine Government and his Chinese counterpart Governor Zhou Xiaochuan of the People's Bank of China .

On the other hand, the MOU on preferential buyer's credit will provide US$400 million soft loan for the financing of the construction of Phase 1 Section 1 of the North Luzon Railways Project that would provide commuter rail service for passengers and goods between Caloocan City and Malolos in Bulacan.

The signatories to the MOU were Finance Secretary Jose Isidro Camacho for the Philippine government and Zhap Wenzhang, executive vice president of the export-import Bank of China, for the Chinese government.

During the meeting, the President told Chairman Wu that the BSA "will certainly help the Philippines in our efforts to strengthen and stabilize our own currency."

"Truly, all of these show that China is not only economic giant but the very responsible of the world economy," the President said.

The President also lauded Chairman Wu for his unprecedented effort to extend the pre-payment period of 20 years of the Philippine government to China.

"So I'm very grateful for the unprecedented extension of the pre-payment period of 20 years. It's a very great honor for us the Speaker (Jose de Venecia) said that this is the first time you've done it and I understand Mr. Chairman you have been personally responsible for the public decision and I thank you," the President added

The President also noted that the visit of Chairman Wu is of great importance to the friendship between the Filipinos and Chinese.

Wu, Chairman of the Standing Committee of the National People's Congress of the People's Republic of China (PROC) has arrived in the country Saturday afternoon with a 100-man delegation to participate in the 4th General Assembly of the Association of Asian Parliaments of Peace (AAPP) which will begin today and ends on September 4 at the Manila Hotel.