WASHINGTON, D.C. – The Philippines continues to look for other sources of funds for development grants to finance projects affected by the suspension of loan negotiations with countries such as the US that have questioned the government’s all out war against illegal drugs.
Philippine Ambassador to the US Jose Manuel Romualdez said other partner agencies are more than willing to finance development projects as the country is about to achieve the much-coveted A grade rating from debt watchers.
Last April, S&P upgraded the country’s credit rating to BBB+ or a notch below the A grade or two notches above minimum investment grade amid sound macroeconomic fundamentals.
On the other hand, both Moody’s Investor Service and Fitch Rating have retained the country’s credit rating at one notch above minimum investment grade.
The country expects to get lower borrowing costs for both the government and private sector amid the higher credit ratings from debt watchers.
“We even had a better credit rating than the US. We are not mendicants, we no longer are mendicants. We were accused of being as one, we were treated as one, but not anymore. We have come to terms that we have to do things on our own and that’s what we are doing now,” Romualdez said.
According to Romualdez, talks for a second development grant from the US under the Millennium Challenge Corp. (MCC) has remained suspended since 2017.
The US agency made it hard for the Philippines to qualify for a fresh grant after it raised human rights violations under the drug war of President Duterte.
The MCC has deferred the selection of the Philippines to receive a second batch of development grant, citing concerns on “rule of law and civil liberties.”
“There has been no formal offer from the US part and no formal rejection on the part of the Philippine government,” Romualdez added.
Even as it suspended its participation in the MCC, the Philippines had remained on the annual list of possible recipients because the agency automatically includes countries that are eligible to receive grants.
“We turned it down technically. This is an example of our veering away from being too dependent on this country,” he said.
The Philippines received about $34 million for the first grant during the administration of former president Benigno Simeon Aquino III.
However, the Philippines failed to hurdle eight of the 20 criteria particularly corruption and rule of law to qualify for another grant from MCC for developing countries.
Last August, President Duterte 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 which backed the resolution.
Finance Secretary Carlos Dominguez had said the Department of Finance (DOF) continues to pursue other development partners to finance projects affected by the suspension of loan negotiations with countries that supported the United Nations Human Right Council’s resolution to probe the Duterte administration’s drug war.