Economy


Senate seeking to ratify AIIB membership deal




Posted on October 04, 2016


THE Philippines may soon be an official member of the Asian Infrastructure Investment Bank (AIIB), with the Senate seeking to ratify the accession agreement, according to National Treasurer Roberto B. Tan.

“[Senator Loren B. Legarda] is urging the Office of the President to submit for ratification our membership to the AIIB,” said Mr. Tan in an interview with reporters during a Senate Finance Committee hearing on the budget for the Department of Finance, held yesterday. Ms. Legarda chairs the Senate finance committee.

The Philippines is one among the 57 prospective founding members of the AIIB, a China-based international bank that would fund infrastructure development in Asia and the Pacific.

Securing founding membership status requires ratification of the agreement before the end of the year.

“The previous president has already submitted our agreement for ratification,” said Mr. Tan during the Senate meeting. Because of the change in government, they would have to re-submit the agreement.

On the new administration’s stance on the AIIB, Mr. Tan said that “the Office of the President right now is processing the formal submission to the Senate.”

For his part, Finance Secretary Carlos G. Dominguez III said that “we would be able to avail of financing here at almost concessional terms for our program that is heavily focused on infrastructure.”

With P21.3 billion proposed budget for 2017, the Department of Finance (DoF) is planning to dispatch two new finance attaches to facilitate and monitor trade. The attaché to China will also aid in securing the Philippines’ membership in the bank.

While its membership is pending, the Philippines has been attending the bank’s board meetings. “We are still of course observing, so we just listen to the proceedings of the board,” said Mr. Tan.

The AIIB’s governors are still setting the maximum amount that a country can borrow. “Eventually once the operations and the policy has been set by the current board then there will be a definitive allocation per country but that will be dependent on the projects that will be submitted by countries and these projects are all ready for financing,” said Mr. Tan.

The private sector may also avail of funds from the AIIB, making it suitable for private-public partnerships (PPPs). Mr. Tan cited a power plant project in Pakistan and a solid waste management project in Maldives as among the PPP projects funded by the AIIB.

Last year, the Asian Development Bank (ADB) identified transport, water, urban development and renewable energy projects as among those that could be co-financed with the AIIB. -- Lucia Edna P. de Guzman