BSP: China-led AIIB to benefit country

CHINA-LED multilateral lender Asian Infrastructure Investment Bank (AIIB) can help plug funding gaps in the Philippines’ infrastructure pipeline and show the country’s commitment to being one of the region’s good citizens.

Potential governance issues still hound AIIB, which some speculate can serve as Beijing’s political tool against Washington. However, a top Philippine economic manager said the benefits of taking part in AIIB should be considered.

“Joining the bank is a strong signal [we’re] part of the global economic community,” Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. said at a recent press conference. “It’s a concrete form of financial cooperation.”

Formed by a group of emerging markets led by China, AIIB is a response to World Bank and the International Monetary Fund (IMF)—two institutions that have consistently failed to recognize developing countries’ growing prominence.

This comes amid concerns over the government’s and the private sector’s abilities to fund expensive infrastructure projects, which the country needs to catch up to its neighbors in the region.

Tetangco said one lingering concern officials have regarding AIIB was the quality of governance. “We want to look at the governance structure of the bank to see if it will be operated with economic and financial considerations, rather than political considerations.”