MANILA, Philippines–The Philippines is expected to chip in a “minimal” amount for the capital formation of Asian Infrastructure Investment Bank (AIIB), an economic manager said on Tuesday.
While the establishment of the China-led multilateral lender—which is being positioned to rival the Asian Development Bank (ADB) and the World Bank—remains in preliminary stages, the Philippines, as a founding member, would be required to contribute capital, Economic Planning Secretary Arsenio M. Balisacan told reporters.
“Of course, to be a member, you will be asked to contribute,” said Balisacan, who is also the Director-General of the National Economic and Development Authority.
But in the Philippines’ case, only a “fairly minimal” amount may be sought, according to Balisacan. “It will be more of nominal, just to say you have voting rights. Your influence on the organization depends on your equity,” he pointed out.
Still, AIIB has “a long way to go to firm up particular sharing arrangements,” Balisacan said.
On Oct. 24, the $50-billion AIIB was launched in China after 21 countries, including the Philippines, signed an agreement to start the bank’s operations next year. The other founding members are Bangladesh, Brunei, Cambodia, India, Kazakhstan, Kuwait, Laos, Malaysia, Mongolia, Myanmar, Nepal, Oman, Pakistan, Qatar, Singapore, Sri Lanka, Thailand, Uzbekistan and Vietnam.
The Philippines was represented by the Department of Finance.
According to reports, the China-backed lender is aimed at granting loans to developing countries in the region, and is being seen as an alternative to the mainly United States-backed financial institutions. China would have a stake of up to 50 percent in AIIB.
In a statement issued last week, ADB president Takehiko Nakao welcomed the establishment of AIIB. “Given Asia’s huge infrastructure funding needs, establishing the Asian Infrastructure Investment Bank to provide additional resources for infrastructure investments is understandable,” he said.
Nakao said that “once AllB is formally established, ADB is prepared to consider appropriate collaboration in areas of common priorities.”
ADB, which has a capital of $175 billion, also urged AIIB to “adopt international best practices in procurement and environmental and social safeguard standards on its projects and programs.”
According to Balisacan, AIIB is one way for China to consolidate its lending program.