Rody junks EU aid for Philippines

MANILA, Philippines - The Duterte administration announced yesterday it will reject new grants from the European Union (EU), possibly forgoing some 250 million euros or roughly $278.7 million in funds for development projects in the country, particularly in Muslim Mindanao.

The announcement came after President Duterte received over $1 billion in pledges of official development aid from China where he recently attended the Belt and Road Summit along with 30 other heads of state.

The EU is the Philippines’ largest export market. The EU delegation in Manila said it was informed by the government of its decision Wednesday, but it has yet to receive formal notice.

“The President has approved the recommendation of the Department of Finance not to accept grants from the EU that may allow it to interfere with internal policies of the Philippines,” presidential spokesman Ernesto Abella told reporters at Malacañang.

“The Philippines reserves the right to accept loans and grants that help attain its objectives of promoting economic development, inclusiveness, and reducing poverty, attaining peace within its borders and with its neighbors, and fostering a law-abiding society,” Abella said.

“It also reserves the right to respectfully decline offers that do not achieve these goals and offers that allow foreigners to interfere with the conduct of its internal affairs,” he added.

The decision to reject new EU grants was meant “to discourage them from interfering with our internal affairs,” Executive Secretary Salvador Medialdea said.

The Department of Foreign Affairs (DFA) said it is not yet aware of the details of the rejection of EU assistance.

“We haven’t seen the details. We still need to clarify the details,” Foreign Affairs spokesman Robespierre Bolivar said.

President Duterte had challenged the EU to stop its assistance after the bloc warned that the Philippines risks losing tariff-free exports to Europe because of the thousands killed in his war on drugs and his move to revive the death penalty.

“If you think it is high time for you to withdraw your assistance,  go ahead, we will not beg for it,” Duterte said in a speech in October directed at the EU, the United States and other critics.

The European Parliament was one of the first institutions that called Duterte’s attention to rising cases of summary executions and human rights violations in the course of his so-called war on drugs.

EU Ambassador Franz Jessen said more than 250 million euros or roughly $278.7 million worth of grants could be at stake.

“We are still awaiting more detailed clarification from the government,” Jessen said in an email to the AP. “The amount possibly concerned by the new decision is 250 million euro plus. For this year the amount affected could be 100 million euro.”

On Tuesday, Jessen made it clear in an interview with The STAR that EU is “not interfering in the domestic affairs here.” He was commenting on ASEAN’s call on its dialogue partners at a recent summit to honor the principle of “non interference” in the internal affairs of member-states.

Development projects currently using EU assistance include a 35-million euro ($39 million) grant to support the peace process with Muslim rebels in Mindanao.

The EU is the largest foreign investor in the Philippines, the only member of the 10-nation Association of Southeast Asian Nations to enjoy duty-free exports under EU’s Generalized Scheme of Preferences or GSP incentives for developing countries.

The Philippine’s duty-free exports to EU were worth around 1.6 billion euros in 2016, according to EU delegation data.

In March, the EU summoned Charge d’Affaires Alan Deniega to its Brussels headquarters to provide “an explanation for the recent, unacceptable comments of President Duterte,” particularly his threat to hang EU officials for opposing his efforts to re-impose the death penalty.

The move highlights growing European exasperation with the President. Earlier, the EU denied his allegations that it proposed solving the Philippines’ drug problem by creating treatment clinics where illegal drugs such as methamphetamine or cocaine would be dispensed.

Existing aid stays

Abella explained that existing grants will remain, and the new policy will cover only new ones.

The Palace may still accept some grants from the EU but it will be a different matter “when it begins to impose certain conditionalities that will interfere with the way we handle things, that we consider objectionable,” he stressed.

Pressed to elaborate, Abella said Duterte was merely expressing his government’s decision “not to accept grants that will compromise our internal integrity otherwise we will be forced (to comply).”

“It’s simply stressing that ‘let’s maintain our independent foreign policy.’ All are being notified,” he added.

The Palace did not say whether the policy had something to do with Duterte’s tirades against the EU and his previous statements that the government could forgo with EU grants if the bloc continued criticizing his vicious anti-drug campaign.

Trade Secretary Ramon Lopez said he hopes that the current GSP won’t be affected.

“It’s not a grant and they’re commercial transactions that can mutually benefit both sides,” Lopez said. “EU should continue to engage the country. GSP provides better market access to our exporters but it allows cheaper Philippine products for EU consumers or cheaper inputs for their manufacturers,” he said.

“EU investors in the country that exports back to EU also benefit from the GSP. It’s a mutually beneficial arrangement,” Lopez added.

A large part of EU development aid has been earmarked for the peace process with the Moro Islamic Liberation Front (MILF) and communist rebels.

According to the Philippine Statistics Authority, exports to EU amounted to a total of $901 million as of March this year, the same month it overtook the US and Japan as the Philippines’ biggest export destination.

Among the top destinations of Philippine products are Germany, the Netherlands, United Kingdom, France, Spain, Malta and Cyprus.

The top Philippines products shipped to EU were integrated circuits/micro-assemblies, computers, optical readers; coconut/palm/babassu oil; cruise/cargo ships, barges; electrical converters/power units; solar power diodes/semi-conductors; regulating/control instruments; aircraft parts; computer parts, accessories; fish, caviar (preserved/prepared). The Philippines is also the biggest supplier of seamen for EU vessels.

Meanwhile, the Department of Health (DOH) downplayed the possible effect of the rejection of EU aid on the department’s program.

“It won’t affect us because as far as the (EU) commitment is concerned, it is a done deal,” DOH spokesman Eric Tayag said in an ambush interview.

He maintained that such a rejection might even work in favor of the Philippines as it could compel the country to become self-reliant.

He cited the case of the United States Agency for International Development’s gradual pullout of its contraceptive donations to the Philippines in mid-2000.

“For so many years, we depended on foreign donations of contraceptives. But we have to be self reliant and we cannot always ask others for help,” he said.

The country continues to receive some donations from foreign agencies like the United Nations Population Fund.

Sharing Tayag’s optimism was former health chief Esperanza Cabral who also underscored the need for the Philippines to learn to stand on its own feet.

“The DOH has money coming out of its ears. So what is important now is to know how to use it wisely. Having no money can no longer be used as an excuse. Even if we still have shortage of funds, the shortage is not as much as before,” Cabral said.

Janet Garin, also a former health chief, agreed but explained that unlike other foreign donors, EU gives “without expecting anything in return.” – Edith Regalado, Sheila Crisostomo, AP