THE Senate is expected to ratify next week the Asian Infrastructure Investment Bank (AIIB) agreement that formalizes the Philippines’ entry to the Beijing-led multilateral lending institution.
Senator Loren Legarda, who chaired the hearing of the Sub-Committee on Foreign Relations on the AIIB treaty, on Tuesday sponsored the committee report on Senate resolution 241 which contained the AIIB Articles of Agreement in a bid to meet the December 31 deadline.
Legarda emphasized the importance of being a member of the AIIB, which like the Asian Development Bank (ADB) and the World Bank, is a multilateral lending institution. The bank, owned by sovereign-member countries, aims to promote economic development in Asia and to foster economic development and promote regional cooperation.
Legarda said the Philippines’ entry to AIIB will help improve the country’s competitiveness since it will have additional source of financing for infrastructure projects.
It will also accelerate the Philippines’ annual infrastructure spending to account for five percent of GDP, or even higher, and improve competitiveness through better infrastructure facilities that will attract investments.
“The absence of good infrastructure—from road networks, transportation systems, airports and seaports, electrification, water supply, to telecommunications—has had dire consequences on our nation’s growth; above all, on our people’s well-being,” Legarda said.
The Philippines ranked 95th out of 138 economies in the 2016-2017 World Economic Forum’s global competitiveness index on infrastructure, highlighting how much the country has lagged behind other economies.
The Senate approved on second reading the AIIB treaty and Legarda needs to muster a two-thirds vote to ratify the AIIB Articles of Agreement on Monday.
“Infrastructure bottlenecks have stifled our growth potential for many years. More investment is required not only to build new projects but also to maintain existing infrastructure. The AIIB can broaden our infrastructure funding source,” she said.