Philippines spurns US, looks to China's AIIB for loans

Philippine President Rodrigo Duterte has tapped a China-backed multilateral lender to help fund his government's infrastructure build-up. PHOTO: REUTERS

MANILA • Philippine President Rodrigo Duterte has tapped a China-backed multilateral lender to help fund his government's infrastructure build-up, as he seeks closer relations with Beijing.

The Beijing-based Asian Infrastructure Investment Bank (AIIB) has been viewed by some as a rival to the World Bank and the Philippines-based Asian Development Bank (ADB).

Mr Duterte has vowed to boost spending to address crumbling infrastructure, saying he would seek funds from China as he pivots his nation's foreign policy away from its traditional ally, the United States.

Philippine Finance Secretary Carlos Dominguez said he met AIIB president Jin Liqun in Manila last week and who confirmed that the lender would fund two projects.

"The Philippines' membership to the AIIB would provide the government another source of long-term funding... for the Duterte administration's unprecedented infrastructure build-up," Mr Dominguez said in a statement yesterday.

Mr Duterte has increasingly turned to China for loans and aid as he takes exception to United States criticism of his drug war, which has killed thousands.

Over the weekend, Mr Duterte attacked Washington for deferring aid because of human rights concerns over his anti-crime crackdown. "Eat your aid and we will survive. I'll go to China," he said.

Mr Jin said the AIIB would provide loans for a Manila flood management project and a bus rapid transit system in the capital. The 23 billion peso (S$665 million) Manila flood control project would be co-financed with the World Bank, while the 37 billion peso bus system, which includes construction of 63 stations, would be partly funded by the ADB.

"We are all very eager to finalise the infrastructure projects... This time, we are very happy we can really talk about something to do in your country," the statement quoted Mr Jin as saying.

The Philippines joined the AIIB last year under the government of then president Benigno Aquino, despite conflicting territorial claims with Beijing in the South China Sea. Mr Duterte signed the treaty in October and the Senate approved its ratification this month.

AGENCE FRANCE-PRESSE

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A version of this article appeared in the print edition of The Straits Times on December 20, 2016, with the headline Philippines spurns US, looks to China's AIIB for loans. Subscribe