No more new EU grants? Palace says it depends

MANILA, Philippines — Malacañang on Friday clarified that the Philippines’ acceptance of foreign assistance “depends” on the conditions attached to the aid despite President Rodrigo Duterte’s verbal rejection of new grants from the European Union.

“It all depends on the conditionalities that are being given, but one thing we are sure we are open to, of course, is trade,” presidential spokesperson Ernesto Abella said in a press conference.

Abella was responding to a reporter’s question on whether the Philippines will turn down all kinds of grants from Europe, including any help the bloc may offer in rebuilding the battle-scarred city of Marawi in Lanao del Norte.

While acknowledging that the Philippines has “a lot of needs,” the Palace spokesman said Duterte’s position “at this stage” is to decline grants “tied” to certain conditions in order to protect the country’s autonomy.

“We are not to be mendicants and that we are not to compromise the sovereignty of the nation,” Abella said.

The EU has been a strong critic of Duterte's anti-drug campaign, which has taken the lives of more than 3,900 suspected drug personalities. Human rights groups and government critics have also blamed thousands of other deaths on the drug war. The government blames these deaths on assassins and vigilantes and considers them homicides and murders. 

Defense Secretary Delfin Lorenzana earlier said the Department of Budget and Management has allocated "about P5 billion" for the support of evacuees, reconstruction of infrastructure and repair of bridges in Marawi this year.

He added that the government is looking at a budget of P10 billion for the rehabilitation of the city in 2018.

For Lorenzana, P50 billion is not enough to rehabilitate Marawi because of the destruction brought to the city by fighting there since May 23.

READ: ‘P50 B not enough for Marawi rehab’

EU pledge for Marawi

Meanwhile, the European Commission recently pledged to provide €850,000 or about P49 million in humanitarian aid for Marawi evacuees. EU funding will mostly focus on the provision of food, water supply, healthcare, hygiene kits, sanitation facilities and essential household items.

But Duterte and his Foreign Affairs chief this week said the country will shut its doors to fresh grants from the EU to stop the bloc’s perceived meddling in the Philippines' domestic affairs.

READ: WATCH: Why Duterte refused EU's grants | Cayetano: Philippines will not accept new EU grants

EU Ambassador to the Philippines Franz Jessen earlier said cutting aid from the 28-member bloc would mean the loss of about €250 million or $278.73 million worth of grants.

Compromising sovereignty?

According to a working paper published by UK-based think tank Overseas Development Institute, international financial institutions and donor governments and agencies do not “infringe” sovereign rights of recipient countries as these entities “do not set conditions that fall outside their mandate.”

ODI also explained that setting conditions that the recipient country can freely welcome or reject is not tantamount to interference, adding that "infringement of sovereignty" usually means "actual armed invasion" or other forms of intervention that can impair a country's rights as an independent nation.

“To the extent, therefore, that conditions for loans are specifically linked to making sure that loans are put to the use for which they are made, and that loans are used to correct the situation that created the need for them, then sovereignty is not breached,” ODI concluded.

“Additionally, since recipient governments are not coerced into accepting the loans, the conditions that go with the loans cannot be said to be an infringement of sovereignty and hence of self-determination,” it added.

To recall, the Philippine government early this year announced that it would reject aid from the EU days after China promised to pour in billions of dollars for projects under its One Belt, One Road initiative, which could purportedly help the Philippines.

But Economic Planning Secretary Ernesto Pernia later said the decision to reject EU grants was “not a policy,” adding that Duterte, who is known to flip-flop on his statements, might "take back" his remarks soon as this could only be driven by "reaction."

READ: Philippines ends P13.8-B funding from European Union | Duterte may reverse decision to reject EU aid, Pernia says

Europe had been funding about 100 community projects across the country, which is drawn from the European Development Fund.

In 2015, EU had more than doubled its grant assistance to the Philippines to 325 million euros (P17 billion) for 2014-2020, channeling “a more than proportional amount” of it to Mindanao as part of the bloc’s contribution to the peace process.

EU biggest destination of Philippine exports

EU overtook the United States and Japan as being the largest destination of exports from the Philippines in March, according to the Philippines Statistics Authority.

With $901 million of total exports, this makes the EU the biggest and fastest growing export market for Philippine goods.

In 2014, the Philippines was granted beneficiary country status under the General System of Preference (GSP+) — a preferential trade deal that allows 6,200 of its products to enter the EU market duty free.

However, the alleged cases of extrajudicial killings in the country as part of Duterte’s drug war has put at risk the country’s GSP+ privileges.

The country’s beneficiary status under the GSP+ necessitates the implementation of the 27 international treaties and conventions on human rights, labor rights, environment and governance.

Results of the latest GSP+ review is expected to come out in January next year.

READ: 'No surprises' for Philippines, EU says, as results of trade perks review loom