Loans with Germany, France suspended over support for UN drug war probe

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Metro Manila (CNN Philippines, September 25) — Negotiations for two multimillion-euro loans were held off after President Rodrigo Duterte ordered the  suspension of all financial assistance negotiations from countries that supported the United Nations (UN) resolution to investigate the human rights situation in the Philippines.

These loans are from Germany and France, two of the countries that sponsored  the Iceland-led UN Human Rights Council resolution, Finance Secretary Carlos Dominguez said in a Senate hearing Wednesday.

"I think there are two loans that we are looking at. One is a 21-million euro  from France supporting the bus rapid transit program of Department of Transportation," Dominguez said, adding that a substitute lender has already been found.

"The other overseas development assistance is from Germany and I believe it is around $46 million and that has to do with funding studies for climate change. It's really mostly studies and we are looking for a substitute for that program," Dominguez said.

He explained that the memorandum will remain in effect as the government examines its relationship not only with the 18 countries that voted for the UN resolution, but also with the countries that sponsored it.

"The memo says it will be suspended while the relationships are being examined and the current negotiations involve not only the countries that voted but the countries that sponsored," the Finance chief said.

Executive Secretary Salvador Medialdea on August 27 signed an order directing government officials to suspend the negotiations and signing of the countries involved in the UN resolution.

READ: Philippines suspends aid from countries that back UN drug war probe

Presidential Spokesperson Salvador Panelo, who previously denied the existence of the memorandum, said that it will not affect diplomatic ties with the signatory and sponsor countries.

READ: Panelo: Barring aid from countries calling for UN drug war probe won't affect diplomatic ties