MANILA, Philippines - The decision caught him by surprise and left him wishing it were just a reaction of a “very sensitive” President to criticisms, Socioeconomic Planning Secretary Ernesto Pernia said yesterday, referring to President Duterte’s rejection of new development aid from the European Union.
But while Pernia would rather see the President change his mind, local business leaders said the decision would not have much impact on the business front.
“We have parsed this carefully because the President has a style of doing something then taking it back later,” he told reporters yesterday. “So I will not take it as policy. It’s more of a reaction to criticisms. He’s very sensitive and he usually takes it back. It appears kind of an unwelcome, not a good move but I don’t think it will remain as such,” Pernia said.
Malacañang said the Department of Finance recommended the rejection of EU grants that could allow the bloc to interfere in domestic affairs. The decision may imperil 250 million euros or roughly $278.7 million in funds for development and humanitarian projects especially in Mindanao.
Pernia said he and other members of the economic team – Finance Secretary Carlos Dominguez III and Budget Secretary Benjamin Diokno – were not properly consulted on the matter, particularly on how to proceed with the decision.
“Maybe for this year (No EU aid will be accepted),” said Pernia. The team, he said, may meet to evaluate the effects of Duterte’s announcement.
But a post in Politiko Twitter said Dominguez admitted recommending the rejection of EU aid, although only $280 million reportedly covering the review of the country’s adherence to the rule of law.
The Twitter post said Dominguez made the admission in a text message to presidential peace adviser Jesus Dureza.
“That specific grant that is considered interference in our internal affairs,” Dominguez reportedly texted Dureza, according to Politiko Twitter.
The EU is the eighth largest provider of ODA to the Philippines both in the form of loans and grants, according to National Economic and Development Authority, which Pernia heads.
In 2016 alone, it provided $217 million in ODA grants mostly for projects in Mindanao. It is also a major donor to the World Bank-managed Mindanao Trust Fund.
It remains to be seen if the EU will impose trade sanctions against the Philippines over the issue, Pernia pointed out. “We will see. But trade is a different thing,” he said.
Diokno, in a separate interview, claimed the EU’s financial assistance to the Philippines is minimal.
“We’re not getting a lot of aid from the EU, also from the US. The big time (contributors) are really Japan or China,” Diokno told reporters in an interview.
“To me, it’s not big. Obviously, (those grants) are for technical assistance to the agencies,” he added.
He said the Philippines can borrow at an interest rate of as low as three to four percent for 20-year bonds considering the country’s favorable investment grade rating.
Diokno also said the country can tap other facilities, such as the Climate Change Fund, to finance its programs and projects.
“We have not accessed the Climate Change Fund. We still have a lot of funds that can be accessed,” he said.
Local business leaders said the funds from China could compensate for the loss of EU aid.
“I don’t think it’s a big loss. We’re talking of not really very big money here,” Philippine Chamber of Commerce and Industry honorary chairman Sergio Ortiz-Luis said.
“There are so many countries running after the Philippines to give us aid and grants. With or without EU grant should not affect us much, although the more the merrier,” International Chamber of Commerce Philippines founding chairman Francis Chua pointed out.
The bulk of EU assistance, Ortiz-Luis said, was mostly for social programs in Mindanao, which “could be easily replaced by money from China and Japan.”
“There are many which could replace that. And I don’t think this includes the bilaterals like the British and the Germans who each give separate grants. What we’re talking about here is the EU itself which I don’t think is that much and can be very easily replaced,” Ortiz-Luis said.
Management Association of the Philippines national issues committee head Perry Pe said the government’s decision could in fact spur greater dialogue between the Philippines and EU. – Richmond Mercurio, Mary Grace Padin