The Philippines may now request the Asian Infrastructure Investment Bank (AIIB) for a mission to discuss the proposed list of projects financing after the Senate ratified the Articles of Agreement formalizing the country’s status as founding member of the China-led lender.
National Treasurer Roberto Tan said the EDSA Bus Rapid Transit project and the Metro Manila flood control project would be among the first to be presented to the AIIB for possible funding.
“These are the projects that are the most prepared in terms of government approvals, feasibility studies and other requirements, and are already in the pipeline. So these projects can be processed most expeditiously for co-financing by AIIB,” Tan said during a Senate hearing last week.
Finance Secretary Carlos Dominguez 3rd noted the BRT is also supported by the Asian Development Bank while the Metro Manila flood control project is being backed by the World Bank.
“Achieving full membership in the AIIB is a significant milestone. Completing our domestic procedures for ratification puts us in solidarity with 56 other countries,” Dominguez said.
“AIIB serves as the only multilateral development bank that focuses on infrastructure. The operations and policies of the bank are designed to be lean, clean and green. It is committed to principles of transparency, independence, openness and accountability,” he added.
Meanwhile, Tan reiterated that the Philippines is looking at $300 million to $500 million in initial funding from the AIIB.
“Funds from AIIB will serve as an additional source of concessional financing to support our growing infrastructure requirements. Its terms and conditions are comparable to those of other multilateral development banks,” he said.
The Senate, voting 20-1, ratified on December 5 the Philippines’ entry into the AIIB, beating the December 31, 2016 deadline set by the bank for members to submit their respective “instruments of ratification.”
In a briefing paper, the DOF said “AIIB can provide financing to major capital investments of the government and the private sector. AIIB can support the government in reducing the infrastructure gap in the Philippines and accelerating annual infrastructure spending to account for 5 percent of GDP (gross domestic product).”
The AIIB is owned by 57 sovereign-member countries with a total capitalization of $100 billion.
Among others, its members include Australia, China, South Korea, United Kingdom, Philippines, Malaysia, Thailand, Singapore, Brunei, Indonesia, Laos, Myanmar, Cambodia, Vietnam, Austria, France, Germany, Italy, Brazil, Russia, India and South Africa.
Out of the 57 members, 37 are from Asia and 20 fr5om non-regional members. The AIIB became operational on January 17, 2016. To date, its board directors has approved six infrastructure projects amounting to $829 million.
“AIIB can contribute in closing the country’s infrastructure gap for the next six (6) years, which is estimated at P8 trillion. The funding that we can tap from AIIB will support the infrastructure priorities under the Duterte Administration’s 10-Point Socio-Economic Agenda,” Dominguez said.
Earlier, an initial list of 18 big-ticket items worth P427.5 billion have been approved by the National Economic and Development Authority for this unparalleled infrastructure buildup.
The government is financing its infrastructure program through a mixture of soft loans, grants, official development assistance and the public-private partnership (PPP) program, Dominguez said.
The Duterte administration’s approved infrastructure projects include the improvement of the Ninoy Aquino International Airport (NAIA), North-South Railway South Line, Metro Manila Bus Rapid Transit, Metro Manila Flood Management, New Cebu International Container Port and Panglao Airport.