The China-led Asian Infrastructure Investment Bank is studying local currency financing and a variable spread facility to help fund the ‘Build, Build, Build’ infrastructure program of the Philippine government, Finance Secretary Carlos Dominguez III said Thursday.
Dominguez in a statement welcomed the proposal by the AIIB, saying the bank was also looking into possible co-financing arrangements with other multilateral institutions in implementing big-ticket infrastructure projects.
AIIB president Jin Liqun in a meeting with Filipino officials in Beijing last week said the multilateral bank would focus on “the actual work” in implementing infrastructure projects to ensure that they would be completed on schedule without any hidden or added costs.
Dominguez led a group of Philippine officials that included Economic Planning Secretary Ernesto Pernia, Budget Secretary Benjamin Diokno and Philippine Ambassador to China Jose Santiago Sta. Romana in discussing possible financing approaches for the government’s centerpiece infrastructure program.
“We are quite sensitive to interest rates. Although they may seem small amounts, we do not want to reverse the trend of lowering our spreads. So it is very encouraging that you are considering variable spreads [over the Libor facility]. I was hoping for an update on it. We are happy about the local currency bonds as well,” Dominguez told AIIB officials during the meeting.