Asian Infrastructure Investment Bank (AIIB) President Jin Liqun is eager to finalize the Philippine infrastructure projects for financing after the Senate positively acted on the bank’s Articles of Agreement before the 2016 deadline.

Jin said the two initial projects the AIIB will cofinance in the Philippines with other multilateral lending institutions are the Metro Manila Flood Management Project and the Edsa Bus Rapid Transit (BRT) system.

“We are all very eager to finalize the infrastructure projects in your country. This time, we are very happy we can really talk about something to do in the Philippines,” said Jin in a recent meeting with Philippine officials, led by Finance Secretary Carlos G. Dominguez III.

The World Bank-supported Metro Manila flood-control project worth P23.46 billion is being processed for project financing by the National Economic and Development Authority (Neda).

In earlier reports, National Treasurer Roberto B. Tan said that the government has tapped the AIIB for cofinancing of the said project.

The Edsa BRT system, worth P37.76 billion, is partly funded by the Asian Development Bank (ADB). The ADB support for the said land-transport project excludes the public-private partnership (PPP) portion of the project cost, which the Neda hopes would be backed by the AIIB.

In the said meeting, Jin thanked Dominguez for helping facilitate the speedy concurrence by the Senate of the ratification of the AIIB treaty under the administration of President Duterte.

Dominguez has strongly backed the Philippines’s membership to the AIIB, saying this will provide the government with another source of long-term funding at very reasonable interest rates for the Duterte administration’s infrastructure projects.

“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.

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.

“We’d like to thank you very much for speeding up the ratification so that we can start doing business very soon. We believe there is so much that we can do in your country,” Jin added.

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 joined at a later date if it had failed to beat the deadline 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.

Jin also briefed Dominguez and the other Philippine officials on the AIIB’s ongoing projects, which include infrastructure projects in Oman, Pakistan, Myanmar, Bangladesh, Tajikistan and Indonesia.

He said the AIIB focuses more on infrastructure rather than on direct poverty eradication initiatives, as the Bank believes that “poverty reduction is the derivative of economic development.”

“This is our difference. We may finance other productive sectors, not just infrastructure. [That includes] industrialization, manufacturing, because we believe developing countries need to move up on the value chain. And if you help them, then you can help them to be able to generate income,” he said.

Jin said that, aside from moving faster than the World Bank and ADB in terms of project approvals, the AIIB also offers cheaper financing terms.

“Compared to ADB and World Bank, it will take less than half a year in AIIB to process loans,” he said.

The AIIB is a multilateral bank owned by 57 sovereign-member countries with a total capitalization of $100 billion. Out of the 57 members, 37 are from Asia and 20 are
nonregional members.

The AIIB president had a three-day visit in the country from December 12 to 14, where he met with Duterte, Dominguez, Governor Hermilando I. Mandanas of the province of Batangas, and other senior state and local government officials.

19 December 2016
By Rea Cu