Senate OKs on second reading resolution to ratify AIIB Treaty

The Senate has adopted on second reading a resolution seeking its concurrence in the ratification of the Articles of Agreement of the Asian Infrastructure Investment Bank (AIIB).

No senator objected when Senate Majority Leader Vicente “Tito” Sotto III moved to adopt on Tuesday Senate Resolution No. 241.

The resolution has yet to secure the two-thirds vote of the members of the chamber before it becomes effective. A committee report on the resolution was sponsored on the floor by Sen. Loren Legarda, who chaired the hearing of the Senate sub-committee on foreign relations for the AIIB Treaty.

Like the Asian Development Bank (ADB) and the World Bank, Legarda said, AIIB is a multilateral lending institution, owned by sovereign-member countries, which aims to promote economic development in Asia.

“It aims to foster economic development and promote regional cooperation,” she said in her sponsorship speech.

Legarda said the Philippines is the 57th prospective founding member of the AIIB, the last to have signed on in December last year.

“Forty-eight have already attained full membership, including Australia, France, Germany, India, South Korea and Russia. All Asean (Association of Southeast Asian Nations) countries have signed on, with the Philippines and Malaysia as the only Asean countries that have yet to deposit its instruments of Ratification. We have only until December 31 of this year to make this submission and to pay our initial capital contribution,” she said.

The AIIB, she said, can provide an annual financing window to the Philippines around US$200 million to US$500 million.

“In the end, we can see a 400 percent to 1,150 percent return on investment of our required paid-in capital of US$196 million in five years,” she said.

Legarda said the AIIB membership would also bring in a host of benefits such as additional source of financing to implement better and resilient infrastructure and to support rural and value chain development to increase agricultural and rural enterprise productivity and rural tourism of the country.

It will also accelerate the Philippines’ annual infrastructure spending to account for 5 percent of gross domestic product, or even higher, and improve competitiveness through better infrastructure facilities that will attract investments into the country, she said.