The Senate approved on second reading the articles of agreement of the China-backed Asian Infrastructure Investment Bank (AIIB), putting the country a step nearer to joining the regional financial institution.

In a statement, Senator Loren Legarda, who chaired the hearing of the sub-committee on foreign relations for the AIIB treaty, said membership to the bank would help achieve its growth targets through accelerated infrastructure spending.

“Development of infrastructure is crucial for enhancing our trade competitiveness. Resilient and adequate infrastructure will reduce the costs of trade and strengthen our competitiveness. These would impact on our future growth,” said Legarda in her sponsorship speech.

Budget Secretary Ben Diokno said last Monday the Philippines has reaffirmed its commitment to join the AIIB.

Diokno said the Philippines has set aside one billion pesos to join the AIIB.

Legarda said the Philippines ranked 95th out of 138 economies in the 2016-2017 World Economic Forum’s global competitiveness index on infrastructure.

“The absence of good infrastructure ? from road networks, transportation systems, airports and seaports, electrification, water supply, to telecommunications ? has had dire consequences on our nation’s growth; above all, on our people’s well-being,” said Legarda.

The World Bank estimates that a 10 percent increase in capital investment into infrastructure projects contributes to a 1 percent growth in GDP.

Legarda said the Philippines is expected to also realize other benefits from its membership in the AIIB, such as:

*Increased opportunities for Filipino contractors / professionals for infrastructure projects in the Philippines and abroad

*More employment opportunities for Filipino workers due to heightened infrastructure spending

*Reduced trade costs of about 15.6% of trade value and real income gain of about $220 billion. DMS