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China-backed AIIB to co-finance 2 infrastructure projects

by December 19, 2016 General

THE China-led Asian Infrastructure Investment Bank (AIIB) will co-finance two huge infrastructure projects in the Philippines, the Department of Finance (DOF) said.

The two projects the AIIB will co-finance in the Philippines with other multilateral lending institutions are the Metro Manila Flood Management Project and the Edsa Bus Rapid Transit system.

The P23.46-billion Metro Manila flood control project supported by the World Bank is now being processed for project financing by the National Economic and Development Authority (Neda), which, according to National Treasurer Roberto Tan, has tapped the AIIB for co-financing of the project.

On the other hand, the P37.76-billion Edsa Bus Rapid Transit system is partly funded by the Asian Development Bank (ADB).

The ADB support for this land transport project excludes the Public-Private Partnership portion of the project cost, which the Neda hopes would be backed by the AIIB.

Finance Secretary Carlos Dominguez III has strongly backed the Philippines’ membership to the AIIB, which, he said, would provide the government “another source of long-term funding at very reasonable interest rates” for the Duterte administration’s infrastructure build-up.

“Achieving full membership in the AIIB is a significant milestone. Completing our domestic procedures for ratification puts us in solidarity with 56 other countries,” said Dominguez, who recently met with AIIB president Jin Liqun in Manila.

Duterte signed the instrument of ratification of the AIIB on October 19, after which the Senate concurred in the ratification of the Articles of Agreement of the AIIB on December 5.

Jin recalled that last year, the previous administration barely beat the deadline on December 31, 2015 to make the Philippines a founding member of the AIIB.

He said the Philippines could have also joined at a later date if it had failed to beat the deadline at that time but would lose voting privileges given only to founding members.

Under the Articles of Agreement of the AIIB, the Philippines as a founding member will get an allocation of 600 Founding Member votes on top of its Basic Votes and Share Votes.

The AIIB is a multilateral bank owned by 57 sovereign-member countries with a total capitalization of US$100 billion.

Its member countries include Australia; China; South Korea; United Kingdom; the Asean countries of the Philippines, Malaysia, Thailand, Singapore, Brunei, Indonesia, Laos, Myanmar, Cambodia and Vietnam; and European states such as Austria, France, Germany, and Italy; Brazil, Russia, India, and South Africa.

Out of the 57 members so far, 37 are from Asia and 20 are non-regional members. (SDR/Sunnex)