PH urges Beijing-based AIIB to cofinance MRT 4

The Philippines has urged the Beijing-based Asian Infrastructure Investment Bank (AIIB) to look into possibly cofinancing the proposed Metro Rail Transit (MRT) Line 4 with the Manila-based Asian Development Bank (ADB), the Department of Finance (DOF) said Thursday.

Also in the pipeline of infrastructure projects for possible AIIB financing are two long-span bridges and a number of water projects, the DOF quoted Finance Undersecretary Mark Dennis Y.C. Joven as saying.

MRT 4 that will run between Ortigas district and Rizal province was part of the ADB’s pipeline of infrastructure projects to be financed under its new six-year country partnership strategy for the Philippines approved last year.

For his part, Finance Secretary Carlos G. Dominguez III broached with AIIB senior advisor to the president and chief programming officer Konstantin Limitovsky the possibility of the multilateral lender partnering with the state-run Development Bank of the Philippines (DBP).

“Working together, say with DBP, will help AIIB because you are too big to deal with our construction companies. Maybe funding them, getting them into some kind of joint funding or whatever structure you can together with DBP to do it, or the guarantee function. So let’s look at those possibilities,” Dominguez told Limitovsky during a meeting in Manila recently.

The DOF quoted Limitovsky as saying that the AIIB was open to Dominguez’s proposal since it was “one of the financing models the bank is currently exploring,” adding that AIIB and DBP officials already met in that regard.

Also, Limitovsky was quoted by the DOF as saying that the AIIB was “also studying the possibility of financing private sector-led infrastructure projects as another way to expand its presence in the Philippines, where the bank so far has only one project.”

Since becoming a founding AIIB member in 2015, the Philippines had been extended only one loan so far—$500-million worth approved in 2017 for the Metro Manila Flood Management Project, which the China-led lender cofinanced with the Washington-based World Bank.

According to the DOF, Limitovsky said the AIIB was “developing in coordination with Philippine officials a realistic pipeline of projects that the bank can undertake in the country over the next three to five years.”

But Joven had noted during a recent interview that the AIIB’s lending rates were more expensive than the ADB’s terms.