The Philippines said Wednesday it will join the China-backed Asian Infrastructure Investment Bank, despite being engaged in a dispute with Beijing over its claims in the South China Sea.
Viewed by some as a rival to the World Bank and the Philippines-based Asian Development Bank, the AIIB is expected to begin operation early next year with an opening ceremony scheduled for January 16-18.
The United States and Japan, respectively the world's largest and third-largest economies and the principal shareholders in the ADB, have both declined to join the AIIB, part of an initiative by China to expand its financial clout in Asia.
The move by the Philippines, a key US ally in Asia, comes after it took Beijing to a United Nations tribunal in a bid to challenge its extensive claims in the South China Sea.
"The two (AIIB membership and the maritime dispute) are totally unrelated," Philippine foreign department spokesman Charles Jose told AFP Wednesday.
"The decision of the Philippines to be one of the founding members of the China-led AIIB is based on the country's economic development imperatives," President Benigno Aquino's spokesman Herminio Coloma told AFP.
"There is no linkage between this decision and the issues raised by the Philippines with regard to maritime entitlement claims" in the South China Sea, Coloma added.
In a statement, Philippines Finance Secretary Cesar Purisima said his country's infrastructure financing needs would top $127.12 billion between 2010 and 2020, quoting the ADB.
He said the AIIB would "help close infrastructure financing gaps in many countries" and may lead to "widening job and business growth opportunities" for Filipinos.
"The Philippines stands to gain from signing on as a founding member. We can look forward to deepening our country's technical expertise in infrastructure as we expand bankable projects," he added.
The Philippines would contribute $196 million to AIIB capital, he said.
Beijing will be by far the largest shareholder of the AIIB at about 30 percent, according to the legal framework signed by 50 founding member countries in late June.
The bank is based in Beijing and currently has 57 members, including Australia, Germany and Britain. It expects to offer its first batch of project loans by mid-2016, according to China's official Xinhua news agency.
Asked whether the South China Sea dispute would affect the Philippines' AIIB membership, Chinese foreign ministry spokesman Lu Kang told a regular briefing: "I think the operation of the AIIB will be decided by the AIIB rules, which are made by all the members."