EDSA BRT leads projects for AIIB funding

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id-10077917The Philippine government awaits promising development and financing cooperation with the Asian Infrastructure Investment Bank (AIIB) to help fund the country’s big-ticket infrastructure projects, which will initially include the EDSA Bus Rapid Transit (BRT) system.

National Treasurer Roberto Tan said that following last week’s ratification by the Senate of the Articles of Agreement formalizing the Philippines’ entry as a founding member of the AIIB, the government may now request an AIIB mission to the country to discuss the proposed list of projects prepared by the National Economic and Development Authority for the bank’s financing.

Tan said the EDSA BRT project and the Metro Manila flood control project would be among the first to be presented to the AIIB for possible funding, as they are the most prepared in terms of government approvals, feasibility studies and other requirements, and are already in the pipeline.

“So these projects can be processed most expeditiously for co-financing by AIIB,” Tan said.

Finance Secretary Carlos Dominguez III has said that the BRT is also supported by the Asian Development Bank while the Metro Manila flood control project is being backed by the World Bank.

Dominguez has strongly backed the Philippines’ membership to the AIIB, which he said would provide the government “another source of long-term funding at very reasonable interest rates” for the administration’s unprecedented infrastructure buildup.

“AIIB serves as the only multilateral development bank that focuses on infrastructure. The operations and policies of the Bank are designed to be lean, clean and green. It is committed to principles of transparency, independence, openness and accountability,” he added, noting that the country’s full membership following the ratification “puts us in solidarity with 56 other countries.”

Tan said the Philippines is “looking at $300 million to $500 million for the initial year,” as financial window that it can tap from the AIIB.

“Funds from AIIB will serve as an additional source of concessional financing to support our growing infrastructure requirements. Its terms and conditions are comparable to those of other multilateral development banks,” Tan said.

Entry into AIIB

The Senate, voting 20-1, ratified last December 5 the Philippines’ entry into the AIIB, beating the December 31, 2016 deadline set by the bank for members to submit their respective “instruments of ratification.”

The AIIB, which became operational in January 2016, is owned by 57 sovereign member countries with a total capitalization of US$100 billion.

Its members include Australia; China; South Korea; United Kingdom; the ASEAN countries of the Philippines, Malaysia, Thailand, Singapore, Brunei, Indonesia, Laos, Myanmar, Cambodia, and Vietnam; and European states such as Austria, France, Germany, and Italy; Brazil, Russia, India, and South Africa.

According to Dominguez, the administration needs at least P8 trillion to close the infrastructure gap over the next six years.

“AIIB can contribute in closing the country’s infrastructure gap for the next six (6) years, which is estimated at P8 trillion,” Dominguez said.

He said an initial list of 18 big-ticket items worth P427.5 billion combined have already been approved by the NEDA.

The government is financing its infrastructure program through a mixture of soft loans, grants, official development assistance, and the public-private partnership program, Dominguez said.

Approved major infrastructure projects so far include the improvement of the Ninoy Aquino International Airport, South Line of the North-South Railway Project, Metro Manila Bus Rapid Transit, Metro Manila Flood Management Project, New Cebu International Container Port, and Panglao Airport.

Image courtesy of kibsri at FreeDigitalPhotos.net