AIIB agrees to co-fund EDSA BRT, Metro Manila flood project
MANILA, Philippines – The president of China-led Asian Infrastructure Investment Bank (AIIB) pledged to co-fund the P23.46-billion Metro Manila flood control project and the P37.76-billion EDSA Bus Rapid Transit (BRT) system in the country.
AIIB President Jin Liqun expressed enthusiasm in finalizing Philippine infrastructure projects for financing, after the Senate finally concurred in the ratification of the bank's Articles of Agreement before the end-2016 deadline.
Jin confirmed that the first two projects that the AIIB will co-finance in the Philippines with other multilateral lending institutions are the Metro Manila Flood Management Project and the EDSA 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 your country," Jin said in a recent meeting with Philippine officials led by Finance Secretary Carlos Dominguez III.
The Metro Manila Flood Management Project supported by the World Bank is now being processed for project financing by the National Economic and Development Authority (NEDA), which has tapped the AIIB for co-financing, said National Treasurer Roberto Tan.
The EDSA BRT system is partly funded by the Asian Development Bank (ADB).
Dominguez said the ADB support for this land transport project excludes the public-private partnership (PPP) portion of the project cost, which NEDA hopes would be backed by the AIIB.
In the meeting, Jin also thanked Dominguez for helping facilitate the speedy concurrence by the Senate of the ratification of the AIIB treaty.
Dominguez has strongly backed the Philippines' membership in the AIIB, saying it would provide the government "another source of long-term funding at very reasonable interest rates" for the Duterte administration's unprecedented infrastructure buildup.
"Achieving full membership in the AIIB is a significant milestone. Completing our domestic procedures for ratification puts us in solidarity with 56 other countries," the finance chief said.
President Rodrigo Duterte had signed the instrument of ratification of the AIIB last October 19. The Senate then concurred in the ratification of the Articles of Agreement of the AIIB on December 5. (READ: Philippine Senate ratifies treaty to join China-led AIIB)
"We'd like to thank you very much for speeding up the ratification so that we can start very soon. We believe there is so many that we can do in your country," Jin told Dominguez during the meeting.
The bank's president was accompanied by AIIB Director General Supee Teravaninthorn, AIIB Principal Strategy Officer Najeeb Haider, AIIB Senior Advisor to the President Yong Zhou, and Jin's Chief of Office Huan Chen.
Representing the Philippine side were Dominguez, Tan, Senator Loren Legarda, Budget Secretary Benjamin Diokno, Public Works Secretary Mark Villar, NEDA Director General Ernesto Pernia, Finance Undersecretary Antonette Tionko, and Finance Assistant Secretary Edita Tan.
Cheaper financing terms
In the meeting held at the Ayuntamiento building of the Bureau of Treasury (BTr), Jin briefed Dominguez and the other Philippine officials on the AIIB's ongoing projects, including infrastructure projects in Oman, Pakistan, Myanmar, Bangladesh, Tajikistan, and Indonesia.
"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," Jin said.
He added that besides 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," Jin said.
The AIIB is a multilateral bank owned by 57 sovereign-member countries with a total capitalization of $100 billion.
Its member countries include Australia; China; South Korea; United Kingdom; the Association of Southeast Asian Nation (ASEAN) countries of the Philippines, Malaysia, Thailand, Singapore, Brunei, Indonesia, Laos, Myanmar, Cambodia, and Vietnam; European states such as Austria, France, Germany, and Italy; as well as Brazil, Russia, India, and South Africa.
Out of the 57 members so far, 37 are from Asia and 20 are non-regional members. – Rappler.com