The widely circulated Philippine Daily Inquirer on Monday ran an editorial saying the Philippines can avail itself of the infrastructure lending program being offered by Beijing-based Asian Infrastructure Investment Bank (AIIB) to finance the country's massive infrastructure needs.
The editorial, headlined "China Funding Initiative," says the Philippines and other developing countries in the region will need the AIIB and benefit from it.
"The AIIB has been described as modern and multilateral, or China's '21st-century' answer to lenders like the World Bank, which has always been led by Americans, and the Asian Development Bank, which is dominated by Japan," says the editorial.
"And the Philippines will be better off borrowing through a more transparent AIIB lending window now," it says.
The ADB estimates that the region requires 750 billion U.S. dollars in investment annually until 2020 to fund its infrastructure needs, which the bank says it cannot finance on its own.
"The Philippines' infrastructure financing needs from 2010 through 2020 was placed at 127.12 billion U.S. dollars. This will require an annual investment of 11.56 billion U.S. dollars, which the government failed to fill in the past six year," the editorial says.
The Philippines has maritime and territorial disputes with China on the South China Sea. Diplomatic relations between Manila and Beijing soured when Manila brought the case to a U.N. arbitral tribunal in 2013.
But despite the Philippines' territorial dispute, the editorial says "it's possible for the Philippines to have strong trade and investment relations with the global economic powerhouse."
"One major avenue for this is the AIIB, which the Philippines joined at the last minute in December 2015," the editorial says.
Since its launch last January, it says the AIIB has approved four loans worth 509 million U.S. dollars for projects in Pakistan, Tajikistan, Indonesia and Bangladesh. "Multilateral lenders such as World Bank usually take more than a year to approve similar project loans," it says.
The bank could support projects under the Belt and Road Initiative, which aims to link Asia, Europe and Africa through the construction of massive infrastructure such as railways and ports.
The editorial says the Belt and Road Initiative is believed by some experts to even help ease tension around the South China Sea as it expands economic cooperation among neighbors in the region.
"Billions of dollars in investments are expected to pour into the construction of railway facilities, airports and sea ports and power plants that, in turn, would trigger the growth of job-generating factories. Beside, while it is true that the AIIB is linked to China's own economic and strategic goals, what is wrong in having better China-funded infrastructure in the country?" the article says.
The Philippines signed the Articles of Agreement of the AIIB in December last year, officially joining the newly-created multilateral institution aimed at boosting infrastructure development and connectivity.
In a statement before the signing, then Finance Secretary Cesar Purisima said Manila believes that AIIB "will augment and complement existing multilateral institutions in accelerating economic growth."
Last month, new Finance Secretary Carlos Dominguez, through his spokesperson Paola Alvarez, told the Inquirer that the new administration of President Rodrigo Duterte will "definitely pursue joining the AIIB" to increase the country's spending.
"With (heavy vehicular) traffic and the lack of basic infrastructure projects being hindrances to Philippine economic prosperity, the membership of the Philippines to AIIB is surely something that the people will benefit from," the Inquirer quoted Alvarez as saying.
