Government negotiates new funding for projects affected by suspension of some loans

MANILA, Philippines — The government is in talks with other development partners which can potentially finance the projects affected by the suspension of loan negotiations with countries which supported the United Nations Human Rights Council (UNHRC)’s resolution to probe the Duterte administration’s drug war, according to the Department of Finance.

During a recent Senate finance committee hearing, Finance Secretary Carlos Dominguez said the government has already found another partner which is willing to fund the 21-million euro loan for the Metro Manila Bus Rapid Transit (BRT) project, which was originally being discussed for France’s assistance.

On the other hand, he said the DOF is now looking for a replacement to climate change studies, which were supposed to be funded by Germany worth around $36 million.

Dominguez, however, did not identify these potential donor-countries as discussions are still in the preliminary phase.

“We are currently in exploratory talks with our other bilateral partners on how they can assist the government in funding the grants that were previously under negotiation, but were suspended on orders of the President, pending the review by the Department of Foreign Affairs (DFA) of our country’s relations with countries that had voted for or sponsored the UNHRC resolution,” Dominguez said in a statement.

President Duterte last month issued a memorandum ordering concerned agencies to “suspend negotiations for and signing of, all loan and grant agreements with the governments of the countries that co-sponsored and/or voted in favor of the aforesaid resolution, pending the assessment of our relations with these countries.”

These include Argentina, Australia, Austria, Bahamas, Bulgaria, Croatia, Czech Republic, Denmark, Fiji, Iceland, Italy, Mexico, Peru, Slovakia, Spain, Ukraine, the United Kingdom of Great Britain and Northern Ireland, and Uruguay.

France, Germany and Sweden were among the UNHRC non-members who backed the resolution. 

However, Dominguez clarified that the suspension does not mean a permanent cancellation of talks, but only a deferment pending the assessment of the Philippines’ relations with these countries, which will be conducted by the DFA.

He also clarified that the suspension only covers those under negotiation, and would not affect existing loans and grants that are already being implemented.

These ongoing grants have a total amount of $197.03 million, including $172.4 million from Australia, $4.8 million from Italy, $1.11 million from Spain, $9.74 million from France, and $8.98 million from Germany.

“All of these will not be affected,” Dominguez said.

Earlier, Dominguez said the Malacañang’s order would not affect the country’s Build Build Build program as most of the proposed financing from the affected countries cover technical assistance grants.

Moreover, Dominguez said the loan terms offered by the affected countries, if there are any, are not better than the rates offered by multilateral agencies and the other bilateral partners.