The government is planning to borrow $300 million to $500 million from China-led Asian Infrastructure Investment Bank (AIIB) next year to fund ready-to-implement projects, the Department of Finance said Monday.
In a statement, the DOF quoted National Treasurer Roberto B. Tan as saying that the government “may now request that AIIB send a mission to the country to discuss the proposed list of projects prepared by the National Economic and Development Authority (Neda) for financing.”
Last month, Neda Director Jonathan L. Uy said that about 31 projects are in the pipeline for financing by the Chinese government, including the AIIB.
Tan also told the Senate in November that membership in the AIIB would allow co-financing with the Manila-based multilateral lender Asian Development Bank of the Edsa bus rapid transit (BRT) project, as well as with the World Bank for the Metro Manila flood control project.
“These are the projects that are deemed most prepared in terms of government approvals, feasibility studies and other requirements, and are already in the pipeline. These projects can be processed most expeditiously for co-financing by AIIB,” Tan said.
“Funds from AIIB will serve as an additional source of concessional financing to support our growing infrastructure requirements. Its terms and conditions are comparable to those of other multilateral development banks,” he said.
The Duterte administration plans to spend P860.7 billion or 5.4 percent of the gross domestic product (GDP) on hard infrastructure next year, en route to bringing the infrastructure spending-to-GDP ratio to 7.2 percent by 2022.
On Dec. 5, the Senate voted 20-1 to ratify the Philippines’ membership in the Beijing-headquartered AIIB, ahead of the Dec. 31 deadline for submission of prospective members’ instruments of ratification.
Tan, who attended an AIIB meeting last week, had said the government was ready to pay the initial tranche of the paid-in capital worth $40 million or about P2 billion before the end of the year. This will come from budgetary savings.
The Philippines was required to contribute to the AIIB some $200 million or about P9.3 billion in paid-in capital, payable in five tranches until 2019. The AIIB’s total capitalization is $100 billion.
The second and third installment payments worth P3.72 billion were already included in the proposed P3.35-trillion 2017 national budget.