PH eyes AIIB funding for 4 projects

The Philippines is looking at tapping financing for four big-ticket infrastructure projects from the Asian Infrastructure Investment Bank (AIIB), according to the Department of Finance (DOF).

The pipeline of projects that the Beijing-based multilateral lender is currently studying included two road projects and two water projects, Finance Undersecretary Mark Dennis Y.C. Joven told the Inquirer.

“Right now, they’re evaluating these projects,” Joven said, but he declined to identify them.

Last year, the DOF said the AIIB was considering to extend loans for the Camarines Sur Expressway (San Fernando-Pili Section) and the Pasacao-Balatan Tourism Coastal Highway, both in Camarines Sur province.

In a report in January, the AIIB noted that “infrastructure construction activity in the Philippines looks likely to increase, driven by the government’s state utilities” even as risks here included the government’s tendency to underspend, high inflation and weak peso seen driving construction cost.

For its part, ADB president Takehiko Nakao earlier said the Manila-based lender was planning to cofinance with the AIIB a transport project in the Philippines.

So far, the AIIB extended to the Philippines only a single loan—$500 million approved in 2017 for the Metro Manila Flood Management Project, which it cofinanced with the Washington-based World Bank.

Joven said that when he last checked, the construction of the flood project was “ahead of schedule”

In June, the AIIB will send a country program mission to the Philippines to firm up project financing with the government as well as present their products to the private sector, including the country’s top conglomerates, Joven said.

“We want to help them market not only to the government but also to Philippine private sector. I don’t think it’s clear to the public what the AIIB is—it’s not an arm of the Belt and Road Initiative nor China. Its management, except its president who’s Chinese, everyone else is international,” the finance official explained.

As countries who borrow from multilateral lenders like the ADB and the AIIB “graduate” when they move up to higher income status, these institutions “need to deploy their money elsewhere,” Joven noted.

“They need to look for other opportunities. The AIIB and the ADB see the private sector as an area where they could extend their influence and business,” he said.