Philippines to participate in AIIB crafting of by-laws, lending rules

MANILA, Philippines – The Philippines will participate in the crafting of by-laws and lending rules and regulations of the Asian Infrastructure Investment Bank (AIIB) this month.

“I believe the discussion will circle around the by-laws, the operations and procedures, the environmental and social safeguards, and perhaps the initial budget,” Finance Secretary Cesar Purisima told The STAR in an e-mail over the weekend.

The country, however, continues to “take the time” on deciding whether to become an official member of the China-led multilateral lender seen to rival the US-led World Bank and Japan-chaired Asian Development Bank (ADB), Purisima said.

The country’s delegation will be led by National Treasurer Roberto Tan and Rommel Herrera, director of the Finance department’s International Finance Group.

The meetings will be held during the third week of September in Frankfurt, Germany.

A total of 57 countries were named as AIIB’s “prospective founding members” with their signing of a Memorandum of Understanding. However, only 50 have signed the Articles of Agreement to become full-fledged members.

The Philippines was among the seven that opted out.

“We have until end-December to decide. We have every reason to take the time given us to fully consider our membership,” Purisima said.

“We lose nothing in taking this time to be thorough in our consideration, just as countries who join early gain no additional perk,” he added.

As a prospective member, Purisima said the country was invited to “share our experiences” to ensure the AIIB governance structure would be “inclusive and effective” in addressing Asia’s financing needs.

Critics of the AIIB, including Japan and the US, have expressed qualms over the lender’s governance mechanisms, fearing China may use AIIB to advance its political agenda in the region, particularly in South East Asia.

Purisima said the country does not see AIIB as a “competitor” of the World Bank or ADB, rather a “complement” to address South East Asia’s infrastructure gap of $1.1 trillion a year until 2020.

Charles Jose, spokesperson of the Department of Foreign Affairs, also stressed the need to separate the Philippines’ arbitration case against China from the two countries’ economic agenda.

“We are willing to extract and isolate the (South China Sea) issue and deal with it separately, while at the same time, promoting and strengthening our other areas of cooperation with China (such as) trade and investment, tourism, education, culture, and people-to-people exchanges,” Jose said in a separate e-mail.