PH only refusing EU aid that affects internal affairs

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The refusal of EU aid applies to grants that require a review of the Philippines' adherence to rule of law, say palace officials.

Metro Manila (CNN Philippines, May 18) — The Philippines will only reject aid from the European Union (EU) that meddles with the country's internal affairs, Presidential Spokesperson Ernesto Abella said Thursday.

"When (the aid) begins to impose certain conditionalities that will interfere with the way we handle things, then we consider that objectionable," Abella said in a Malacañang press briefing.

His statement comes after the European Delegation to the Philippines confirmed that the Philippines will be refusing aid from the EU.

"They have conditions, but there are certain items, for example, that we cannot totally accept," Abella said.

These conditions involve grants that entail a review of the Philippines' adherence to the rule of law, officials said.

"We are aware about the decision of President Duterte declining the grant from EU that will measure our our so-called adherence to the rule of law," said Presidential Adviser on the Peace Process Jesus Dureza in a statement.

"Our country has it own internal issues to address that need not be looked into by other nations due to our own internal standards that other sovereign nations such as ours must respect," Dureza added.

Abella said the recommendation to refuse aid from the European Union came from the Department of Finance.

President Rodrigo Duterte "approved the recommendation not to accept the EU's offer of a grant (of) about $280 million which would involve review of our adherence to the rule of law. That specific grant is considered interference in our internal affairs," read a text message from Finance Secretary Carlos Dominguez which was forwarded by Dureza.

Abella added that the move is part of the Duterte administration's "independent foreign policy."

President Duterte has thrown scathing words at the EU ever since it expressed concern over the government's war on drugs that began in July 2016.

Duterte's disapproval of rule-of-law reviews as a condition to EU grants seemed apparent on Wednesday.

Incoming Foreign Affairs Secretary Alan Peter Cayetano said Duterte would refuse any aid that would impact the administration's war on drugs.

"Ang instructions ng Presidente, 'yung gusto tumulong nang kusa, libre sila," said Cayetano in an interview on May 17 after his confirmation.

"But 'yung may strings attached o kaya, 'Eto 'yung aid, pero eto gawin niyo,' lalo na pagdating sa campaign against drugs, napapakialaman o pinapatigil, eh huwag tanggapin," he added.

[Translation: The President's instructions are that if nations want to help willingly, they are free to do so. But for help with strings attached or something like, "Here's the aid, but you have to do this," especially when it comes to the meddling in or campaign against drugs, we won't accept.]

Aid at stake?

The country is set to receive 325 million euros (around ₱18.05 billion) in aid from 2014 to 2020 under the EU's Multiannual Indicative Program for the Philippines. The money will be used for sustainable energy and job creation, legal and judicial reform, as well as feasibility studies and outreach programs.

It is not clear if the $280 million (₱13.95 billion) EU grant earlier mentioned by Dominguez is part of this figure.

Abella said the Philippines will continue receiving the money under the Multiannual Indicative Program as long as the conditions are amenable to the government.

"We'll take it on a case-to-case basis," he said. "If it was allowed and accepted and nothing was found to be objectionable, it will continue."

Abella said government agencies who might lose funding as a result of the Palace's decision are taking proper action.

One-time act

Before the Palace briefing, National Economic and Development Authority head Ernesto Pernia dismissed the decision – which he said was made before a Philippine delegation went to the United Nations in Geneva on May 8 to defend the country's human rights record – as a mere response to criticism.

"We have to parse this carefully because our President has a style of doing something and then taking it back later," Pernia said Thursday.

"He is very sensitive and he usually takes it back later on," he added, speaking to reporters after a briefing on the Philippine economic growth figures for the first quarter of 2017.

Pernia added that the appointment of former Senate President Edgardo Angara as Special Envoy to the European Union on May 3 was "a way to mollify the issue."

But after learning from reporters that the Palace confirmed the decision, Pernia said economic managers were not consulted about it and that the country could lost $13 billion (around ₱647 billion) in grants.

"Well, it should not be policy," he said. "This is not a policy decision. This is not going to be customary. It's an act, a one-time act," Pernia added.

Pernia said he will meet with Dominguez and Budget Secretary Benjamin Diokno soon to discuss the issue further.

European businesses won't move away

Abella said European businessmen will likely not pull out of the Philippines because of the measure.

"These people are business people. They understand the dynamics of politics. And at the end of the day, they will go where they can grow. And l believe that they understand that the Philippines right now is in a sweet spot of growth," Abella said.

However, the EU grants, which are usually allocated to peace and humanitarian projects in the Philippines, especially Mindanao, complemented European businesses with ventures in the country, said  European Chamber of Commerce of the Philippines President Guenter Taus.

"While usually grants are not affecting businesses, it must be said that they do greatly contribute to creating desirable conditions for businesses to thrive and spur inclusive growth as it creates much needed jobs - and grants come free of charge and conditions," Taus said in a statement.

Duterte and the EU

In October 2016, Duterte challenged the United States and the EU to pull out their aid to the Philippines after they expressed concerns over alleged extrajudicial killings in the drug war.

"If you think it is high time for you guys to withdraw your assistance, go ahead," he said. "We will not beg for it," Duterte added.

In March, Duterte slammed the EU for having "no idea" about the drug problem in the Philippines and again accused the EU of proposing that the government supply drugs to treat drug dependents.

However, the EU said in a statement that it never gave such a proposal, and that it was working with the Department of Health to develop rehabilitation centers.

CNN Philippines Correspondents JC Gotinga and Claire Jiao contributed to this report.