Finance Secretary Carlos Dominguez has raised the possibility of the Development Bank of the Philippines (DBP) entering into a partnership with the Asian Infrastructure Investment Bank (AIIB) to jointly fund projects under the Duterte administration’s centerpiece infrastructure modernization program.

Dominguez said the DBP, which is being transformed into the government’s infrastructure bank, can team up with AIIB to explore ways of expanding the latter’s project pipeline in the Philippines.

He broached this possibility during a meeting with Konstantin Limitovsky, AIIB’s Senior Advisor to the President and Chief Programming Officer, who was recently in Manila.

“Working together, say with DBP, will help (AIIB) because you are too big to deal with our construction companies. Maybe funding them, getting them into some kind of joint funding or whatever structure you can together with DBP to do it, or the guarantee function. So let’s look at those (possibilities),” Dominguez said during the meeting at the Department of Finance (DOF) central office in Manila.

The AIIB, Limitovksy said, would be open to this proposal, as it is one of the financing models the Bank is currently exploring.

Limitovsky said he and some AIIB officials have already met with DBP officials, who explained to them the bank’s thrust towards development finance.

According to Limitovsky, the AIIB is also studying the possibility of financing private sector-led infrastructure projects as another way to expand its presence in the Philippines, where the Bank so far has only one project—the Metro Manila Flood Management Project—which is co-financed with the World Bank.

Limitovsky said the AIIB is now developing in coordination with Philippine officials a “realistic pipeline” of projects that the Bank can undertake in the country over the next three to five years.

“I am confident we can be able to select correct projects to start with,” Limitovsky said.

Finance Undersecretary Mark Dennis Joven, who is helping develop the project pipeline with AIIB, said several water projects and at least two long-span bridge projects are now being discussed with the Bank’s officials.

Joven also said the AIIB can also look at the possibility of co-financing the Metro Rail Transit-4 Line project, with the Asian Development Bank (ADB).

Limitovsky said the AIIB is planning to lend out US$3.5 billion this year and another $1 billion next year so that it can expand its global presence and ramp up its loan exposure to $10 billion over the medium term.

The Bank has $8 billion in loan commitments so far after only two years of operation, he said during his meeting with Dominguez.

“We will keep raising that, with the benefit to the Philippines as well,” Limitovsky said.

The AIIB, which began operations in January 2016, now has 100 approved members worldwide, including the Philippines.

As a multilateral development bank, the AIIB is focused on investing in sustainable infrastructure projects.

Its first project in the Philippines, which was approved on Sept. 27, 2017, is the $500-million Metro Manila Flood Management Project.

This flood control project co-financed with the World Bank involves the construction of new pumping stations and modernizing existing ones along with their supporting infrastructure, by improving solid waste management practices within the vicinity of drainage systems served by the selected pumping stations, and by supporting the resettlement of affected families.

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 project will include an area with a total population of about 970,000 people or about 210,000 households.

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