NEDA sees ‘indirect’ impact of US freeze order on aid

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A US State Department order freezing all assistance and aid packages to foreign countries is expected to have an “indirect” impact on the Philippine economy, National Economic Development Authority (NEDA) said in its initial assessment of the move.

Secretary Arsenio Balisacan said   many ongoing projects, especially the infrastructure flagship programs of the government, will not be affected.

Balisacan, in an interview in Malacanang yesterday said most of the infrastructure flagship programs are financed through loans and assistance from other countries like Japan and South Korea as well as multilateral institutions like the Asian Development Bank and the World Bank.

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“Not so much directly. In the short term, much of our loans now are with other countries and multilateral institutions,” he said when asked how the freeze ordered by the Trump administration would affect the country.

“For our current infrastructure flagship projects not much, many of those projects are funded by Japan, Korea, ADB, and World bank,” he added.

Balisacan said in terms of the economy, the impact is “indirect” and may be felt through multilateral institutions and lending facilities where the US is a major shareholder like the World Bank and ADB.

He said the impact may also affect medium-term projects such as those financed through the official development assistance from these institutions.

He said he is still trying to “get data” on how much expected aid to the Philippines will be lost.

In 2024, the US Agency for International Development (USAID) obligated $9.27 million in various aid packages for the Philippines for disaster relief, management of displacement and emergency shelters, among others.

Tariff impact

Balisacan said another “indirect” impact on the Philippines is the possible tariff policy that the Trump government may impose against several countries amid his renewed crackdown on illegal immigrants.

He said if a higher tariff is imposed by the US, it will spark retaliation from other countries which would affect the global economy, and this in turn could impact the Philippines especially in terms of the supply chain.

Balisacan said to cushion its impact, “the key is to get the local economy strong, more resilient.”

“The most important immediate reply or response that we can make is to intensify our efforts to diversify our economy, diversify our trade and ensure that we continue to be aggressive in bilateral and regional trading arrangements so that we can buffer the economy from these disturbances,” he added.

US President Donald Trump has threatened to impose 25 percent tariffs on goods from other countries such as Canada and Mexico due to what he viewed as “inadequate border security” that failed to stop illegal drugs and migrants from entering the United States.

Tump likewise said he would not proceed with raising tariffs on Colombian goods after the Colombian government agreed to accept their nationals who were deported from the US.

Trump had threatened to impose 25% percent tariffs on all Colombian goods and to raise it to 50 percent in one week, as well as issue a travel ban and revoke the visas granted to Colombian government officials, allies and supporters.

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