Rejecting EU Foreign Aid: Can Filipinos Live Without Financial Help from Rich Nations?


President Rodrigo Duterte recently rejected a grant worth Php 13.8 billion ($280 million) from the European Union (EU). The money would have supported the rebuilding and rehabilitation efforts in Mindanao’s Muslim communities until 2020. The president said the decision was made upon the advice of Finance Secretary Carlos Dominguez III and he heeded because the grant also covered conditions that the president found unacceptable.

The president said that accepting the grant would embolden the EU to interfere with the nation’s affairs. According to analysts, Duterte didn’t want the foreign body to encroach upon his war on drugs, which has been rife with accusations of human rights violations.

The EU, through Ambassador Franz Jessen, confirmed the president’s rejection. He clarified, however, that the conditions attached to the grant were “standard conditions” similar to other countries. He implied that the request for the Philippines to uphold its human rights commitment wasn’t even on the table. “Human rights discussion is, in a sense, unrelated to our development assistance,” Jessen said, ABS-CBN reported.

Criticisms, Questions and Inconsistencies

In rejecting the EU grant, critics of Duterte lamented that his arrogance could cost lives. “Someone in Malacañang is trying to play with the lives and welfare of the Filipinos,” one netizen wrote. “It was not about sovereignty…it’s about his hurt ego,” another said, alluding to the EU’s call for Duterte to change his strategy on the war on drugs.

Some also couldn’t reconcile the president’s aim for independence when he’s borrowing from China and Russia and would be heavily indebted to these countries, both literally and figuratively. These countries had little to say against the president’s war on drugs and seemingly supported the alleged extra-judicial killings (EJK).

“Under Duterte, the Drug War simply trumps everything – economics, international relations, treaty obligations, rule of law, institutions, poverty alleviation, free development grants,” a netizen said. “When PDu30 (Duterte) says ‘No more foreign aid from EU,’ fine and good, if he is consistent. But he brags about receiving more aid from China, so he is inconsistent on foreign aid,” another chimed.

Some Filipinos, however, expressed surprise when it was revealed that the Philippines ordinarily receives grants from the EU. Considering Mindanao’s development massively trails behind Luzon and Visayas, they asked, “Did we benefit from those grants? Those were worth billions, so where did the money go?”

Foreign Aid 101

According to political analyst Malou Tiqua, foreign aid is either used for “diplomatic, developmental, humanitarian relief and commercial” purposes. The financial assistance given can be classified as either “a gift, a grant, a low or no interest loan, or a combination of these.”

It’s the giver or donor, in this specific case — the EU, which has the motive in providing aid. She outlined these motives as:

  • a sign of diplomatic approval
  • to reward a government for behavior desired by the donor
  • to extend the donor’s cultural influence
  • to enhance infrastructure needed by the donor for the extraction of resources from the recipient country
  • to gain other kinds of commercial access.

There have been existing debates over the advantages and disadvantages of foreign aid. One side argues the financial assistance can definitely help save millions of lives or improve living conditions when the money is used for infrastructure projects, technological improvements, health and education, and humanitarian emergencies.

Another side argues many nations dependent on aid only become socially and economically stagnant, such as the Philippine’s Mindanao, or on a global scale, the majority of Africa. Historians have long argued against foreign aid because more than help, it only held back development.

“What holds back many poor countries is the people who live there, including their governments. A society which cannot develop without external gifts is altogether unlikely to do so with them,” so goes a famous quote from British economist, Professor Peter Bauer, from 1974.

The Philippines is Rich

I was listening to a former senator’s local radio program over the weekend and was surprised to learn from the guest, an undersecretary from the Government Service Insurance System (GSIS), the country’s pension agency), that the agency has a “sleeping” fund worth Php 1.3 trillion ($26.1 billion). He also said the GSIS has been looking to invest this fund for the benefit of pensioners but, given the EU rejection, GSIS might also consider using the investment to fund future government rehabilitation programs.

In the last two days, a terrorist crisis hit Marawi, a small Muslim city located in Central Mindanao. The Department of Social Work and Development (DSWD) confirmed it has standby funds and stockpile of goods and resources worth Php 1,036,544,329.09 ($2,0791,192.73) to help displaced residents who have evacuated from the city. Nearby towns have also offered free food, water and clothes to Marawi evacuees, while Filipinos from other regions and parts of the world are launching different fund-raising drives.  The situation, while grim, is painting a different picture of a third-world country learning to stand without help from its richer benefactors.

The Philippines always had this capacity for resilience and resourcefulness. Filipinos brag – albeit perhaps just to themselves — about how rich the nation is because our lands are still filled with untapped resources, above ground and underwater. And when push comes to shove, Filipinos always deliver. Have we been so used to a non-functioning government all these years to distrust a leader when he says we have to learn to stand on our own?

EU Grants to Continue, Despite Rejection

Meanwhile, the administration’s economic planner, Ernesto Pernia, tried to appease critics and said Duterte’s decision won’t be standard policy for all other grants. Pernia also expressed optimism that Duterte would change his mind and reverse the rejection.

Jessen also backtracked on the grants. “We are not withdrawing any amount. We are in contact with the government on how best to work on our development assistance,” the EU Ambassador said. He and Foreign Affairs Secretary Alan Peter Cayetano will also meet next week to discuss and clarify Duterte’s rejection.

Written by Rachel Cruz

Rachel Cruz is a freelance writer from Manila who wishes to build a new Philippines


Duterte says idea to reject EU grant came from Finance chief

No human rights conditions for aid to PH, says EU

Du30 Dumps EU, Sacrifices Pinoys – Bernard Ong, Facebook

Duterte’s inconsistencies – Nonoy Oplas, Facebook

Lawmakers urge transparency, clarity on verbal foreign policy utterances

Foreign Aid – Malou Tiqua, Facebook

Foreign Aid Hasn’t Worked…And It Never Will – Peter Bauer

DSWD Funds

EU aid to continue – envoy


  1. I don’t know what the president is thinking. The obsession with the war on drugs is bordering on crazy. Work on the economy and not a sell off of the Philippines

  2. This man is full of hubris. Let’s see in five years.

  3. My brain freezes after every article on your President. I will have to research how he got into office.


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