Philippines makes last minute entry into China-floated AIIB

Amid a row with China over the South China Sea, the Philippines today sprang a surprise by deciding to join the Beijing-sponsored Asian Infrastructure Investment Bank (AIIB) as a founding member just before the deadline.
Philippine President Benigno S Aquino III has approved Manila's participation in the AIIB, which is seen as potential rival to the World Bank and Asian Development Bank, China's state-run Xinhua news agency reported, citing senior government officials.
Manila will sign the Articles of Agreement (AOA) of the AIIB before year-end, Philippines Finance Secretary Cesar Purisima said.
The Philippines is the last country of the Association of South East Asian Nations (ASEAN) to join the bank which is due to begin its operations from here in the next few weeks after the New Year.

The delay was caused due to growing frictions between the Philippines and China over the South China Sea (SCS) dispute.
Manila was the most vocal in asserting its right over several islands and shoals in the SCS. While China asserts almost all of SCS as its own, Vietnam, Malaysia, Brunei and Taiwan have overlapping claims.

Philippines' petition questioning China's claims is being heard by the international tribunal constituted under the UN Convention on Law of Seas (UNCLOS).
China is boycotting the tribunal.
Besides the SCS dispute, relations between Manila and Beijing soured due to growing close ties between Philippines and the US.

China, which floated the bank, has set the year-end as the deadline for the countries to join it.
US and Japan stayed away from the bank while India and 57 other countries including top western countries like UK, Germany and France have joined the bank as founding members.
But for the Philippines, the AIIB "will augment and complement existing multilateral institutions in accelerating economic growth", Purisima said in a statement.
Defending the decision to join AIIB, Purisima said that in a globalised world, connectivity is the name of the game.
"AIIB is a promising institution addressing investment needs, and will help close financing gaps in many countries.

The Philippines was confident the bank was committed to "transparency, independence, openness and accountability", he added.
With authorised capital of USD 100 billion and subscribed capital of USD 50 billion, Beijing-based AIIB will invest in sectors including energy, transportation, urban construction and logistics as well as education and healthcare.
China, India and Russia are the three largest shareholders, taking a 30.34 per cent, 8.52 per cent, 6.66 per cent stake, respectively, in the newly-formed bank.
The indicative paid-in capital of the Philippines to join AIIB is USD 196 million, payable in five years or USD 39 million per annum.