TOKYO - President Benigno Aquino on Wednesday said the Philippines is still studying the proposal to join the China-led Asian Infrastructure Investment Bank (AIIB).
The AIIB is being proposed by China to provide funds for infrastructure projects in the region.
Answering a question at the International Conference on The Future of Asia organized by the Japanese media group Nikkei, Aquino said that it has to be determined if joining the AIIB would be beneficial for the country.
"We have not joined the AIIB. We have not indicated that we are ready to join also. We are actually… at the stage of studying the proposal to join this particular new entity," he said.
He recalled the country’s experience with a Chinese loan granted to the previous administration of Gloria Macapagal-Arroyo for the Northrail project, which he said, was not helpful to the country.
In 2012, China decided to demand payment for the loan at the height of tensions between Manila and Beijing over territorial claims.
"We are unfortunately also possessor of an experience wherein there was a concessional loan allegedly granted to my predecessor, which once operational was neither concessional nor helpful to our country… As you know, a concessional loan will have grace period, will have probably a decade, or a decade and a half to two decades or more to repay. The drawdowns from this loans were demanded very, very early that potentially could have led us to a cross-default," Aquino said.
Aquino said the Philippines will look at the governance structure of AIIB to make sure the economic help it intends to provide will not be affected by politics.
“And I think it behooves our sense of fiscal responsibility to look at how the governance structure of the AIIB will be, so that the economic help that is supposed to be afforded will not be subjected to vagaries of politics between our countries and the lead proponent," he said.