MANILA (Reuters) - The Philippines, involved in a territorial dispute with Beijing in the South China Sea, is set to join the China-backed Asian Infrastructure Investment Bank, describing it as a “promising institution” that could help accelerate economic growth.

Chinese President Xi Jinping (C, front) poses for a group photo with the delegates attending the signing ceremony for the Articles of Agreement of the Asian Infrastructure Investment Bank (AIIB) at the Great Hall of the People in Beijing June 29, 2015. REUTERS / POOL/WANG ZHAO

The AIIB, which has become one of China’s biggest foreign policy successes, has been formally established and is expected to be operational early next year.

“President (Benigno) Aquino approved the recommendation of the DOF (department of finance) that the Philippines join the Asian Infrastructure Investment Bank,” said presidential communication secretary Herminio Coloma.

Despite the opposition of Washington, other major U.S. allies such as Australia, Britain, Germany, Italy and South Korea have joined the bank, which is seen as potential rival to the World Bank and Asian Development Bank.

But for the Philippines, the AIIB “will augment and complement existing multilateral institutions in accelerating economic growth”, Finance Secretary Cesar Purisima said in a statement.

“AIIB is a promising institution addressing investment needs, and will help close financing gaps in many countries,” Purisima said, adding that the Philippines was confident the bank was committed to “transparency, independence, openness and accountability”.

Chinese Foreign Ministry spokesman Lu Kang said he needed to verify whether the Philippines was indeed joining, but if it was true, it was a good thing.

Southeast Asia’s fifth-largest economy requires $127 billion from 2010 to 2020 to finance its infrastructure needs, the Asian Development Bank has projected.

Founder members will initially pay 20 percent of AIIB’S $100 billion authorised capital. The Philippines’ indicative paid-in capital is $196 million, the Department of Finance said.

Manila is embroiled in territorial disputes with Beijing over some islands in the South China Sea. The Philippine has challenged Beijing before the arbitration court in the Hague, a case Beijing has not recognised.

Asked whether the South China Sea dispute could affect the Philippines’ membership or ability to get funding from the AIIB, Lu said: “The AIIB’s operations will follow the charter agreed on by all AIIB members by consultation.”