Philippines declining EU grants to discourage interference

By TERESA CEROJANO Markets Associated Press

The Philippines will no longer accept new grants from the European Union, officials said Thursday, forgoing possibly more than 250 million euros ($ 278.7 million) in funds for development projects in the country.

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The EU delegation in Manila said the Philippine government informed it about its decision Wednesday, but it has yet to receive a written notice. Executive Secretary Salvador Medialdea, in a text reply to the Associated Press, said the move was "to discourage them from interfering with our internal affairs."

President Rodrigo Duterte earlier 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 the war on drugs launched by Duterte and Manila's moves to revive the death penalty.

"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 Thursday.

EU Ambassador Franz Jessen said more than 250 million euros ($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."

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

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 was worth around 1.6 billion euros ($1.78 million) in 2016, according to EU delegation data.

In March, the EU summoned a Philippine envoy to explain an expletive-laden tirade by Duterte, who threatened to hang EU officials for opposing his efforts to re-impose the death penalty.

The EU's external action service, the equivalent of a foreign office, said it hauled Charge d'Affaires Alan Deniega to its Brussels headquarters to provide "an explanation for the recent, unacceptable comments of President Duterte."

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.

Duterte has lashed out at the EU repeatedly for raising human rights concerns over his deadly crackdown on illegal drugs.

"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, referring to aid from the U.S., EU and other critics.

The social development arm of the influential Catholic Bishops Conference of the Philippines criticized the government's decision.

"The Duterte administration is just too fanatically engrossed on the war on drugs, hating every institution that questions it," said the Rev. Edwin Gariguez, head of the CBCP-National Secretariat for Social Action. "This short-sightedness is echoed even in making foreign or economic policy, which is extremely detrimental to the welfare and interest of the poor, like this decision not to accept EU aid."