BCN-33 AIIB exploring variable spreads, local currency financing for Philippine projects

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ZCZC

BCN-33

PHILIPPINE-AIIB-BANK-FINANCING

AIIB exploring variable spreads, local currency financing for Philippine
projects

MANILA, Aug. 30, 2018 (BSS/Xinhua) – Asian Infrastructure Investment Bank
(AIIB) is exploring the possibility of local currency financing and a
variable spread facility in providing loans to help fund the “Build, Build,
Build” program of the Philippine government.

Philippine Finance Secretary Carlos Dominguez said in a statement released
on Thursday that the AIIB is eyeing possible co-financing arrangements with
other multilateral institutions in implementing big-ticket infrastructure
projects under the “Build, Build, Build” initiative.

In a meeting at the AIIB headquarters in Beijing last week, Dominguez said
AIIB top officials led by its president Jin Liqun also assured Philippine
officials that the AIIB will focus on “the actual work” in implementing
infrastructure projects to ensure that they get completed on schedule without
any hidden or added costs.

Dominguez quoted Jin in the statement as saying the AIIB is highly
responsive to the needs of its borrowers, which is why it is willing to study
flexible financing schemes in extending loans for infrastructure projects.

The AIIB’s first project with the Philippines, which was approved on Sept.
27, 2017 is the 500-million U.S. dollar Metro Manila Flood Management
Project, which it is co-financing with the World Bank.

It will focus on about 56 potentially critical drainage areas with an
approximate land area of 11,100 hectares or over 17 percent of the total area
of Metro Manila. This will include an area with a total population of about
970,000 people or about 210,000 households.

Apart from it, the AIIB has also shortlisted several Philippine projects,
including the Pasacao-Balatan Tourism Coastal Highway, and the Camarines Sur
Expressway for possible financing.

Dominguez also cited the reforms in the budgeting system now being put in
place to ensure that public funds are well spent, and the Philippines’
decreasing debt-to-gross domestic product (GDP) ratio of which foreign
obligations now account for only 23 percent of GDP.

He said the country’s current debt-to-GDP ratio of 42 percent is expected
to decline further to 38 percent by 2022.

BSS/XINHUA/HR/1345