Department of Finance seeks additional AIIB financial support for Philippine infrastructure projects
An announcement made by the Department of Finance (DOF) highlighted how Sec Dominguez sought financial assistance from the Asian Infrastructure Investment Bank (AIIB) for other big-ticket infrastructure projects emphasising the urgency in developing the physical and digital infrastructure of the Philippines.
DOF Secretary Carlos Dominguez III has sought the support of the AIIB in funding other big-ticket infrastructure projects program following the institution’s approval last year of its first project in the Philippines in partnership with the World Bank.
Emphasis on the urgency of developing both the physical and digital infrastructure of the Philippines was done by Sec Dominguez.
He also urged emerging economies in Asia to hasten the development of a common market across the region and transform Southeast Asia into a strong base for trade.
During the Asian Infrastructure Forum (AIF) seminar on “Advancing Together: ASEAN Infrastructure Development”, he said, “A dynamic regional common market will provide our economies a strong base to build competitive industries and profitably trade with the rest of the world. An emergent Southeast Asia will complement the mature economies of East Asia and the rapidly growing Indian subcontinent.”
The Asian Infrastructure Forum (AIF) seminar was held at the Experimental Theatre of the National Centre for the Performing Arts in India.
The first phase of the Metro Manila Flood Management Project was the first project that the AIIB has committed to co-finance with the World Bank (WB). This project will be built to improve flood forecasting, reduce long-term flooding and modernise pumping stations and build new ones in the National Capital Region and its surrounding areas.
The Philippines has pitched several projects to the AIIB for possible financing support. Some of them are the Metro Manila Bus Rapid Transit System Phase 3 from Bonifacio Global City to Ninoy Aquino International Airport, the Pasacao-Balatan Tourism Coastal Highway in Camarines Sur, and the Camarines Sur Expressway Project San Fernando-Pili Section.
The AIIB’s primary goal is to improve infrastructure in the region. Sec Dominguez said that this “will help stimulate economic activity in all our economies and help us build inclusive growth for our people” in the immediate term, and “improve the interconnectivity of the region’s economies and foster productive exchange” over the longer term.
He added, “The Philippines understands the urgency of building up our infrastructure base. We subscribe to the objective of enhancing regional connectivity. We grasp the strategic importance of developing the Southeast Asian region as a strong base for trade.”
Sec Dominguez said the government projects public spending on infrastructure is targeted to increase to 7.3% of GDP by 2022.
He explained, “This is the highest investment in infrastructure in our history and, as a percentage of GDP, possibly the highest in the region.”
Sec Dominguez said the government has also been encouraging the private sector to invest in infrastructure, citing as examples the tollways being operated by the private sector and the expansion of the international airport in Manila, which will be done through private investments.
In order to hasten the execution of projects, the Hybrid Public-Private Partnership (PPP) model is being carried out. In this model, the government begins the implementation of the projects and transfers their operation and maintenance to the private sector.
A recent announcement highlighted the Philippines’ participation in the annual AIIB Board of Governors Meeting. Sec Dominguez will be representing the country and will be involved in the discussions in ensuring a sustainable future for Asia through sound infrastructure investments.