The Asian Infrastructure Investment Bank (AIIB) based in Beijing current explores option regarding a US$300 million loan package it plans to provide the Philippines.
At a virtual Manila Forum of the Association of Philippines-China Understanding (APCU) last Wednesday, AIIB president Jin Liqun said the new loan will fund the Philippine government’s Covid-19 immunization program.
Aside from financing the acquisition of the Covid-19 vaccines, Jin said the loan will also be used for programs to mitigate the adverse impact of the global health and economic crisis.
Last year, AIIB approved a US$750 million loan to the Philippines, which is co-financed by the Asian Development Bank. Jin said the budgetary support funded the increasing Covid-19 testing capacity in the Philippines, supporting vulnerable sectors including agriculture and poor households through conditional cash transfers and emergency assistance, and wage subsidies.
“In general, AIIB’s Covid19 assistance was meant for vulnerable countries, vulnerable businesses, and vulnerable people. That is why we are also mindful of our borrowers’ financial health and vulnerability to debt. We protect the welfare and financial sustainability of our members,” he said.
Commenting on the debt trap issue, Jin said borrowing money from external sources is not necessarily the source of debt problems of a country. “It’s not the borrowing that created the debt problems. It’s the use of the proceeds of the debt, it’s the use of the borrowed money that matters, that makes or breaks,” he explained.