Where do EU grants go?

MANILA, Philippines — For the first time in modern history, the Philippine government will refuse any “conditional” aid from the European Union to discourage the bloc’s supposed meddling in the country’s domestic affairs.

Manila’s new policy came amid the EU’s repeated criticisms on President Rodrigo Duterte’s brutal drug war, which has taken the lives of more than 3,900 people—most of them slum dwellers in the country’s capital.

READ: Cayetano: Philippines will not accept new EU grants | Cayetano: Rejecting conditional foreign aid 'a policy to all countries'

EU Ambassador to the Philippines Franz Jessen earlier said cutting aid from the 28-member bloc would mean the loss of about €250 million or $278.73 million worth of grants.

Fair enough, the Philippines, as a sovereign nation, is not compelled to accept any external help which comes with conditions that the government may qualify as “interfering.”

But where are EU’s hefty grants that the Philippines is willing to forego being channeled?

European Development Fund

Europe had been funding about 100 community projects across the country, which is drawn from the European Development Fund.

In 2015, EU had more than doubled its grant assistance to the Philippines from €130 million (P7 billion) to €325 million (P17 billion) for 2014-2020, channeling “a more than proportional amount” of it to Mindanao, Duterte’s home region.

The seven-year assistance is part of the bloc’s contribution to the peace process and in response to the decades-long conflict in the southern region.

Most of the EU funds are given as grants, making the bloc one of the largest donors in the Philippines. 

In the last three years alone, EU has provided close to €3 million (P183 million) to address the humanitarian needs triggered by the security crisis in Mindanao.

The funds supported the provision of relief items to the most vulnerable individuals as well as the management and arrangement of services at evacuation sites.

In addition, the bloc has provided €1 million (P61 million) in 2016 to ensure access to quality education for children affected by the clashes.

Last July, the European Commission provided €850,000 or P49 million in humanitarian aid to help civilians affected by the conflict in Marawi City, which was overran by militants loyal to ISIS that triggered the biggest security crisis in the Philippines in years.

Meanwhile, Jessen on Thursday announced that Europe might give as much as 100 million euros (P6 billion) for the rehabilitation of the battle-scarred Islamic city, adding that job creation is the “major focus” of the grant as well as other peace initiatives in Mindanao.

READ: Rejection of EU funding could affect Mindanao peace projects

Other sectors

Aside from projects focusing on maintaining peace in Mindanao, the EU also remains a key development partner in the health sector and provides trade-related technical assistance.

In 2014, the Philippines was granted beneficiary country status under the General System of Preference (GSP+)—a preferential trade deal that allows 6,200 of its products to enter the EU market duty free.

The country’s beneficiary status under the GSP+ necessitates the implementation of the 27 international treaties and conventions on human rights, labor rights, environment and governance.

The bloc is likewise working with the Philippines in giving more access to sustainable energy and generating more jobs. Moreover, the EU’s assistance also aims to help the country strengthen the rule of law through judicial and legal reform.

To assist families affected by Typhoon Haiyan that pummeled Central Philippines in late 2013, the EU released a total of €30 million (P1.8 billion) to enable its partners to deliver humanitarian aid, early recovery, and rehabilitation.

Meanwhile, an additional €10 million (P612 million) in development funds were also allocated for infrastructure reconstruction in areas struck by the deadly storm.

Compromising sovereignty?

According to a working paper published by UK-based think tank Overseas Development Institute, international financial institutions and donor governments and agencies do not “infringe” sovereign rights of recipient countries as these entities “do not set conditions that fall outside their mandate.”

ODI also explained that setting conditions that the recipient country can freely welcome or reject is not tantamount to interference, adding that "infringement of sovereignty" usually means "actual armed invasion" or other forms of intervention that can impair a country's rights as an independent nation.

“To the extent, therefore, that conditions for loans are specifically linked to making sure that loans are put to the use for which they are made, and that loans are used to correct the situation that created the need for them, then sovereignty is not breached,” ODI concluded.

“Additionally, since recipient governments are not coerced into accepting the loans, the conditions that go with the loans cannot be said to be an infringement of sovereignty and hence of self-determination,” it added.

To recall, the Philippine government early this year said it would reject aid from the EU days after China promised to pour in billions of dollars to bankroll Duterte’s ambitious infrastructure program.

But Economic Planning Secretary Ernesto Pernia later said the decision to reject EU grants was “not a policy,” adding that Duterte, who is known to flip-flop on his statements, might "take back" his remarks soon as this could only be driven by "reaction."

READ: Philippines ends P13.8-B funding from European Union | Duterte may reverse decision to reject EU aid, Pernia says