MANILA, Philippines - The Philippines has signed a memorandum of understanding (MOU) joining the establishment of the China-backed Asian Infrastructure Investment Bank (AIIB).
Department of Finance (DOF) Undersecretary Gil Beltran represented the Philippines during the signing ceremony held at the Great Hall of the People in Beijing on Oct. 24.
The AIIB, an initiative of China which was announced on separate occasions by Chinese President Xi Jinping and Premier Li Keqiang in October 2013, is envisioned to be an inter-governmental regional development financial institution which aims to support infrastructure and regional economic development.
Other prospective founding members include Bangladesh, Brunei Darussalam, Cambodia, China, India, Kazakhstan, Kuwait, Laos, Malaysia, Mongolia, Myanmar, Nepal, Oman, Pakistan, Qatar, Singapore, Sri Lanka, Thailand, Uzbekistan, and Vietnam.
Founding members will work towards concluding the Articles of Agreement (AoA) and the development bank’s start of operations in 2015.
The AIIB aims to give project loans to developing nations. China is set to be its largest shareholder with a stake of up to 50 percent.
The bank will receive $50 billion in capitalization from China. It has attracted the interest of 21 countries in the Asia Pacific region.
The AIIB is seen as a challenge to the World Bank and Asian Development Bank, both multilateral lenders that count Washington and its allies as their biggest financial backers.
The US opposed the Asia-focused, multinational infrastructure development bank.
State Department spokeswoman Jen Psaki said Secretary John Kerry has made clear directly to the Chinese as well as to other partners that the US welcomes the idea of an infrastructure bank for Asia but strongly urges that it meets international standards of governance and transparency.
“We have concerns about the ambiguous nature of the AIIB proposal as it currently stands, that we have also expressed publicly,” she said.
The AIIB is seen as part of a Chinese attempt to minimize US influence in the region.
The Obama administration reoriented significant elements of its foreign policy toward the Asia-Pacific region with its “pivot to Asia” underscoring the US ability to maintain regional stability.