Manila: The Philippine government will finalise all the paperwork required to perfect its initial status as a founding member of the China-led Asian Infrastructure Investment Bank (AIIB) so it could source funds for its major infrastructure projects, sources said. “The AIIB is, for us, the number one priority [of President Rodrigo Duterte in his state visit in China],” said Finance Secretary Carlos Dominguez in Beijing, transcript of which reached Malacanang, the presidential palace in Manila. “We will discuss with them (AIIB and other bank executives) our whole plan and we will match it with theirs. We have to go to them and see what their priorities are so we can match our priorities with them,” said Dominguez, adding that AIIB’s assistance will be crucial to the Philippine government’s railway and power projects.

“Joining the AIIB will help us not to be as reliable [as we have been] on the World Bank, International Monetary Fund, and the European Union. Joining the AIIB will help fund more infrastructure projects for the country in the future, which is an important agenda for the new government,” said Tony Katigbak, columnist of Philippine Star.

Duterte’s ambitious infrastructure development plan was estimated at 7 trillion pesos (Dh534 billion, $152.17 billion or Dh583.3 billion) in six years.

Prospective founding member

By December 2016, the Philippine government must submit its instrument of ratification to perfect its status as one of AIIB’s 22 founding members in 2014, bank officials said.

On October 24, 2014, the Philippines became an AIIB prospective founding member. It submitted signed articles of membership on December 31, 2015 but its instrument of ratification remained pending since then. It has 9.781 per cent shares and 1.1 per cent voting right.

The Philippines was one of 10-member countries of the Association of Southeast Asian Nations (Asean) which became AIIB founding members in 2014. Asean is composed of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam.

The 12 other AIIB founding members in 2014 were China, Bangladesh, India, Kazakhstan, Kuwait, Mongolia, Nepal, Oman, Pakistan, Qatar, Sri Lanka, and Uzbekistan.

Allies of the United States such as Australia, Britain, Germany, and South Korea became AIIB members in 2015. Right now AIIB has 57 members. Both the US and Japan refused to become members.

Financial input

AIIB started operating in 2015, after 10 member states that hold 50 per cent of its $100 billion initial subscription finalised their respective instruments of ratification. AIIB’s capitalisation is 2/3 of the capital of the Manila-based Asian Development Bank (ADB) and 50 per cent of the World Banks, sources said.

When Chinese President Xi Jinping officially announced the launching of AIIB during a state visit in Indonesia in October 2013, he said China wanted greater financial input (with fewer strings attached) to infrastructure development of developing countries — through an established banking institution similar to the Asian Development Bank, International Monetary Fund, and the World Bank which, he added, were dominated by European, Japanese, and US interests.

The Asian region needs $8 trillion for infrastructure projects to fuel economic development from 2010 to 2020, the ADB said in 2010.