MANILA • The Philippines yesterday said it will join the China-led Asian Infrastructure Investment Bank (AIIB), despite being engaged in a dispute with Beijing over its South China Sea claims.
Viewed by some as a rival to the World Bank and the Philippines- based Asian Development Bank (ADB), the AIIB is expected to begin operation early next year with an opening ceremony scheduled for Jan 16-18.
The United States and Japan, respectively the world's largest and third-largest economies and the principal shareholders in the ADB, have both declined to join the AIIB, part of an initiative by China to expand its financial clout in Asia.
The move by the Philippines, a key US ally in Asia, comes after it took Beijing to a United Nations tribunal in a bid to challenge its extensive claims in the South China Sea.
"The decision of the Philippines to be one of the founding members of the China-led AIIB is based on the country's economic development imperatives," President Benigno Aquino's spokesman Herminio Coloma told Agence France-Presse.
"There is no linkage between this decision and the issues raised by the Philippines with regard to maritime entitlement claims" in the South China Sea, Mr Coloma added.
In a statement, Philippines Finance Secretary Cesar Purisima said his country's infrastructure financing needs would top US$127.12 billion (S$180 billion) between 2010 and 2020, quoting the ADB.
Manila would contribute US$196 million to AIIB capital, he said.
The AIIB is based in Beijing and currently has 57 members, including Australia, Germany and Britain. It expects to offer its first batch of project loans by mid-2016, according to China's official Xinhua news agency.