30 December 2015—The Republic of the Philippines will be signing the Articles of Agreement (AOA) of the Asian Infrastructure Investment Bank (AIIB) before year-end, joining the newly created multilateral institution aimed at boosting infrastructure development and connectivity.
The government believes that AIIB will augment and complement existing multilateral institutions in accelerating economic growth.
Finance Secretary Cesar V. Purisima said, “Our shared pursuit of growth and development has only become more challenging as the global environment becomes increasingly complex. We thus welcome platforms where countries can work towards shared development goals in the spirit of partnership.
In a globalized world, connectivity is the name of the game. AIIB is a promising institution addressing investment needs, and will help close financing gaps in many countries. I also see this as a chance for greater collaboration with member countries, especially with ASEAN, on regional infrastructure goals.”
The Asian Development Bank has estimated Philippine infrastructure financing needs from 2010 through 2020 to be at $127.12 billion, requiring an annual investment of $11.56 billion. The Philippines, the ADB projects, stands to gain from closing this gap: accumulated reduction in trade costs is estimated to be at 15.6% of trade value and will result in a gain of about $220 billion in real income.
The total capital stock of AIIB is $100 billion, 20% of which is paid-in. The indicative paid-in capital of the Philippines is $196 million (payable in 5 years or $39 million per annum).
“The Philippines has taken the matter of our membership in AIIB very seriously. We have participated in the discussions leading to its creation, believing that good governance is just as important in our international institutions just as they are at home. We are confident that the Bank’s organization design and oversight mechanisms are committed to transparency, independence, openness, and accountability. We are likewise optimistic that AIIB’s decision-making processes are geared towards making it a lean, clean, green institution run like a true multilateral,” Purisima remarked.
Full powers to sign the AOA on behalf of the Republic were granted by President Benigno S. Aquino III last 29 December 2015 to Finance Secretary Cesar V. Purisima, or in his absence, Philippine Ambassador to the People’s Republic of China Erlina F. Basilio.
“The Philippines stands to gain from signing on as a Founding Member. We can look forward to deepening our country’s technical expertise in infrastructure as we expand bankable projects. Further, as the AIIB has no restriction on the procurement of goods and services from any country, we may foresee market expansion for infrastructure-related industries, widening job and business growth opportunities,” Purisima added.
The opening ceremony and inaugural meeting of the Board of Governors and the Board of Directors in Beijing will take place on the third week of January 2016. Members have until December 2016 to complete domestic ratification and other approval processes, as well as to pay the initial tranche of the corresponding paid-in capital.