MANILA, Philippines - A bus rapid transit system and a flood control project are the first infrastructure projects to be presented to the Asian Infrastructure Bank (AIIB) for possible funding, National Treasurer Roberto Tan said.
“The country is looking at $300 million to $500 million for the initial year,” Tan said in a statement yesterday.
The Senate last week ratified the Articles of Agreement, paving the way for the country’s official membership in the Beijing-backed multilateral lender.
With full membership, Tan said the government may now request the AIIB to send representatives to study a list of projects prepared by the National Economic and Development Authority for possible funding.
The first two big-ticket projects up for AIIB financing are the 48.6-kilometer bus rapid transit system (BRT) that will run along EDSA and the Metro Manila flood control project.
“These are the projects that are the most prepared in terms of government approvals, feasibility studies and other requirements, and are already in the pipeline,” Tan said.
“So these projects can be processed most expeditiously for co-financing by AIIB,” he added.
Amid potential rising interest rates, Tan said being an AIIB member provides the country cheap alternative source of funds.
“Funds from AIIB will serve as an additional source of concessional financing to support our growing infrastructure requirements,” Tan said.
“Its terms and conditions are comparable to those of other multilateral development banks,” he said, without citing data.
The Duterte administration is targeting to spend up to P9 trillion for infrastructure until 2022 in a bid to promote not only fast economic growth, but an inclusive one that cuts through poverty by up to 1.5 percentage points each year.
The official poverty rate was at 21.6 percent as of last year, census data showed.
To finance its high spending plans, the government raised its budget deficit cap to three from two percent of economic output each year.
This, in turn, will be financed by borrowings worth P631.29 billion next year, of which P126.26 billion will come from foreign sources, budget data showed.
Around 80 percent or P102.26 billion of gross foreign financing needs, meanwhile, will come in the form of loans such as those from ADB, World Bank and AIIB.