The Philippines has turned to China-backed Asia Infrastructure Investment Bank to fund new projects. It's another signal of President Duterte's pivot to Beijing.
Philippine President Rodrigo Duterte has tapped a China-backed multilateral lender to help fund his government's "unprecedented infrastructure buildup", the country's finance minister, Carlos Dominguez, said in a statement released Monday.
Finance Secretary Carlos Dominguez said he met with AIIB president Jin Liqun in Manila last week, and Jin confirmed the lender would provide loans to fund two projects: a flood management project, and a bus rapid transit system. Both projects are situated in the Philippine capital.
The Beijing-based Asian Infrastructure Investment Bank (AIIB), which opened for business in January 2016, has been viewed by some as a rival to the Washington-based World Bank and the Philippines-based Asian Development Bank (ADB). The ADB's two largest shareholders are the US and Japanese governments. By contrast, the AIIB's largest shareholder is China, which holds 30% of its equity.
"The Philippines' membership to the AIIB would provide the government another source of long-term funding ... for the Duterte administration's unprecedented infrastructure buildup," Dominguez said in Monday's statement.
The controversial new President of the Philippines, Rodrigo Duterte, was elected to his post in June 2016. He had previously been mayor of Davao city.
However, the way the two projects are being funded shows that the Philippine government is keeping all its infrastructure financing options open. The 23 billion peso ($470 million) Manila flood control project would be co-financed with the World Bank, while the 37 billion peso ($756 million) bus system, which includes construction of 63 stations, would be partly funded by the ADB, the statement said.
"We are all very eager to finalise the infrastructure projects ... This time, we are very happy we can really talk about something to do in your country," the statement quoted Jin as saying.
The Philippine capital is vulnerable to tropical storms and flooding. Pictured at top: Heavy weather from Typhoon Nepartak, July, 2016.
Duterte pivots to Beijing
Duterte, 71, has vowed to boost spending to address crumbling infrastructure. He has increasingly turned to China for loans and aid, since reacting angrily to criticism by US President Obama and other officials of the Philippines' traditional ally, the United States, of the anti-drug war that Duterte has unleashed. Duterte's policy has resulted in the extrajudicial killing of thousands by police-linked death squads. Duterte recently admitted to participating in such killings himself in earlier years.
Over the weekend, Duterte criticized Washington for deferring aid because of human rights concerns over his anti-crime crackdown. "Eat your aid and we will survive. I'll go to China," he said.
NZ / (AFPE, AIIB website)