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Despite the opposition of Washington, Philippines, a major US ally in the region, has joined the new lender.
“The Republic of the Philippines will be signing the Articles of Agreement (AOA) of the Asia Infrastructure Investment Bank before year-end, joining the newly created multilateral institution aimed at boosting infrastructure development and connectivity,” the Department of Finance (DOF) in Manila said in a statement.
The announcement came two days before the deadline for prospective founding members to sign on the charter of the AIIB. Founding members include the BRICS, half of the European Union and all of the Asian bloc, ASEAN.
The Philippines has a dispute with China over territorial claims in parts of the South China Sea.
It has taken its case to the Permanent Court of Arbitration in the Hague, but China has declined to take part.
Philippine Vice President Jejomar Binay has said he wants the country to be a member of the China-backed bank because it will spur more investment and employment in his country.
The country’s indicative paid-in capital will be $196 million payable in five years, or $39 million per annum, said a government statement on Wednesday.
The Banks’ board of directors and executive council will meet for the first time from Jan. 16 to 18 in Beijing.
The bank, headquartered in Beijing, now has 57 members, that includes Germany, France, Italy, and the UK. It is expected to name its first lending projects in mid-2016.
The China-backed multilateral development institution is tasked with financing infrastructure development across Asia.
With an authorized capital of $100 billion, the AIIB will finance infrastructure projects like the construction of roads, railways, and airports in the Asia-Pacific Region.
The ADB has estimated that in the next decade Asian countries will need $8 trillion in infrastructure investments to maintain the current economic growth rate.
The AIIB will extend China’s financial reach and compete not only with the World Bank, but also with the Asian Development Bank, which is heavily dominated by Japan.