PH membership in AIIB to depend on US, Japan

THE PHILIPPINES will likely fast-track its membership in China-led Asian Infrastructure Investment Bank (AIIB) if the United States and Japan will also take part in its establishment.

Asked if the reports that AIIB’s prospective members are seen expanding to over 70 countries will make it more appealing for the Philippines to join, a ranking finance official told reporters: “Definitely, of course.”

“The more members it has, the better, as there are more eyes to watch over the running of the bank,” said the government official, who is privy to ongoing talks for the Philippines to be a founding member of AIIB.

In June, the Philippines deferred signing the articles of agreement for the establishment of AIIB, even as Finance Secretary Cesar V. Purisima maintained that the country “remains a prospective founding member.”

“As the deadline to sign is in December 2015, the Philippines is taking the time given to prudently consider its membership,” Purisima had said.

Purisima earlier said that the Philippines had “concerns about the governance of AIIB.”

“We do hope that AIIB will function based on purely financial basis, and not political,” Purisima said at a Center for Strategic and International Studies conference in the US in June.

Under the articles of agreement, the Philippines must shell out $979.1 million or about P44.2 billion for capital subscription. AIIB will have an initial authorized capital stock of $100 billion.

Last year, the Philippines, through the Department of Finance, signed a non-binding agreement to join discussions aimed at threshing out issues ahead of the bank’s formal establishment.

Last June 29, 50 countries signed in Beijing AIIB’s articles of agreement, which will lead to the bank’s establishment by yearend.

To date, 51 countries already signed the articles of agreement, as Malaysia did so last month.

Besides the Philippines, the five other prospective members that have yet to sign the articles of agreement were Denmark, Kuwait, Poland, South Africa and Thailand. AIIB originally had 57 prospective member-countries.

“The articles [of agreement] remain open for signing… until the end of 2015,” according to AIIB’s website.

China will hold the biggest stake in the lender at 30.3 percent, equivalent to $29.8 billion in initial subscription. India will have to infuse $8.4 billion, while Russia’s contribution to the capital will be $6.5 billion. The 37 prospective founding-members in the Asia-Pacific region are expected to contribute three-fourths of the capitalization or $75 billion.

The largest initial subscription to AIIB by a non-Asian country will be that of Germany, at $4.48 billion. In all, the 20 prospective non-regional members will have to shell out the remaining $25 billion.

The Beijing-headquartered AIIB said its foundation “will be built on international best practices and the lessons and experiences of existing multilateral development banks and the private sector.”