The Philippines could raise between $200 million and $500 million (P10 billion to P25 billion) in loans annually from the Asian Infrastructure Investment Bank (AIIB) to fund infrastructure projects, a senator said on Tuesday, after the senate ratified the country’s membership to the China-backed institution.
The move comes just less than a month before the deadline set by AIIB and at a time Manila-Beijing ties are fast thawing since President Rodrigo’s China trip in October, despite their unresolved South China Sea ownership dispute.
“Infrastructure bottlenecks have stifled our growth potential for many years,” said Senator Loren Legarda who led a panel that pushed for AIIB membership.
The AIIB membership will help the Philippines achieve its economic growth targets through accelerated infrastructure spending, she added.
Duterte’s five-month-old administration needs at least P8 trillion ($161 billion) to fill the infrastructure backlog, decongest cities, and build new urban centers by the end of his term in 2022, the finance department said in a separate statement on Tuesday.
The Philippines is “at least a couple of decades behind our neighbors with regard to infrastructure,” Finance Secretary Carlos Dominguez said.
“We need everything from new airport capacity, a cheaper and more efficient power sector, actually functioning rail systems and even new digital pathways. We need more public health care facilities and classrooms,” he added.
Established about a year ago, the AIIB is expected to initially lend between $10 billion and $15 billion annually, focusing on financing projects in power, transportation, and urban infrastructure across Asia.
Founding members will initially pay 20 percent of AIIB’S $100 billion authorized capital. The Philippines’ indicative paid-in capital is $196 million, payable in five years, and the initial tranche should be paid by year end.
The AIIB has approved funding for several projects, including power infrastructure in Myanmar, Pakistan and Bangladesh, since it became operational early this year.