Philippines weighs membership in China-led infra bank

MANILA, Philippines – The Philippines is among the five remaining countries – and the last in Southeast Asia – which have not joined a China-led multilateral lending organization for infrastructure development.

Beijing-based Asian Infrastructure Investment Bank (AIIB) concluded its 7th chief negotiators meeting in Frankfurt, Germany last week, where the country sent a delegation as among prospective members tasked to draft the bank’s rules and regulations.

On the sidelines of the meetings, Malaysia and Thailand became AIIB’s newest members with their signing of the Articles of Agreement, the bank said on separate statements on its website.

As a result, 52 of 57 prospective members already formally entered AIIB. Five continues their observer status and will have until Dec. 31, 2015 to join. These countries are Denmark, Kuwait, the Philippines, Poland and South Africa.

National Treasurer Roberto Tan, who led the country’s delegation, did not respond to questions for comment. Charles Jose, spokesperson for the Department of Foreign Affairs, also did not return calls and messages.

Analysts, however, still see the Philippines joining AIIB in the end.

Richard Javad Heydarian, political analyst at De La Salle University, said the country could announce its entry to the AIIB after the leaders’ summit of the Asia-Pacific Economic Cooperation next month.

The summit will conclude Manila’s year-long hosting of the APEC meetings. US President Barack Obama and his Chinese counterpart, Xi Jinping will attend the event.

“I think we need to see how Xi Jinping and Aquino will meet during the APEC. If everything will turn out fine then, I think that is the time we could announce our participation,” Heydarian said in a phone interview.

However, Abigail Valte, deputy presidential spokesperson, said in a text message she “could not say with certainty if the AIIB would be discussed” on the sidelines of the APEC meeting scheduled on Nov. 18 to 19.

Nonetheless, Heydarian said it “makes sense” for the Philippines to have reservations in joining a China-led undertaking since the country “did not have a good experience” with Beijing in the past.

He recalled business controversies such as the $329-billion National Broadband Network deal with Chinese firm ZTE Ltd. during the previous administration, which could have installed a common network system for government offices.

The deal, which was scrapped eventually, said to have benefited former president and now Pampanga Rep. Gloria Macapagal-Arroyo and her allies through millions in kickbacks.

“It behooves us to be a little more cautious in joining organizations which are China dominated... However, I think the generalization that AIIB will be China-led is overblown,” he explained.

“Other developed countries like Australia and South Korea have already joined and they were granted big shares (of the bank) as well. I think we have to step up our scrutiny but not entirely close our doors to it,” Heydarian added.

For his part, Ramon Casiple, executive director of the Institute for Political and Economic Reform, said a big consideration in making the decision would be how the US, the country’s oldest foreign ally, would react.

“But, of course, since there are also other US allies on board, the US may likely understand it. In the end, the Philippines will decide based on its national interests,” Casiple said in a separate phone interview.

“China is not our enemy although we have issues with them in the South China Sea. We still have to consider what’s in it for us when we join AIIB,” he added.

Earlier, Finance Secretary Cesar Purisima said the Philippines is taking its time in joining the AIIB, seen to rival the Japan-led Asian Development Bank and the US-chaired World Bank.