The Department of Finance (DOF) said it is in talks with some international development partners to augment support for projects affected by the recent suspension of negotiations on loan and grant agreements with countries that co-sponsored or favored the resolution of the United Nations Human Rights Council (UNHRC).
Carlos Dominguez, DOF secretary, did not identify these potential donor-countries as the discussions are still in the preliminary phase.
“We are currently in exploratory talks with our other bilateral partners on how they can assist the Philippine government in funding the grants that were previously under negotiation but were suspended on orders of the President, pending the review by the Department of Foreign Affairs (DFA) of our country’s relations with countries that had voted for or sponsored the UNHRC resolution,” Dominguez said in a press statement over the weekend.
Dominguez directed Mark Dennis Joven, DOF undersecretary who heads the International Finance Group, to review affected projects and find ways on how these can be financed by other bilateral partners that did not support the resolution adopted by the UNHRC.
The UNHRC had sought a comprehensive written report on the Philippines’ human rights situation in relation to its war against illicit drugs and narco-trafficking.
Argentina, Australia, Austria, Bahamas, Bulgaria, Croatia, Czech Republic, Denmark, Fiji, Iceland, Italy, Mexico, Peru, Slovakia, Spain, Ukraine, the United Kingdom of Great Britain and Northern Ireland, and Uruguay all voted in the affirmative to adopt the resolution of the 47-member UNHRC. France, Germany and Sweden were among the UNHRC non-members that backed the resolution.
Dominguez made it clear that the Palace order, signed by executive secretary Salvador Medialdea, only directed the concerned agencies to “suspend negotiations for and signing of, all loan and grant agreements with the governments of the countries that co-sponsored and/or voted in favor of the aforesaid resolution, pending the assessment of our relations with these countries.”
He said the suspension does not mean a permanent cancellation of the talks, but only meant a deferment pending the assessment of the Philippines’ relations with these countries, which will be done by the DFA.
He also clarified that the suspension only covers those under negotiation, and will not affect existing loans and grants already being implemented.
Dominguez pointed out the proposed financing with the affected countries, except for a small project loan for the Metro Manila Bus Rapid Transit (BRT) in the amount of 21 million euros, cover technical assistance grants “and hence, will not significantly affect the infrastructure program of the government.”
“In any case, multilateral development financial institutions (MDFIs) and other bilateral partners have signified their willingness to finance the said 21 million euro project loan,” he added.
Moreover, Dominguez said the loan terms offered by the affected countries, if there are any, are no better than the rates offered by MDFIs and the other bilateral partners.
The ongoing grants on record with the affected countries amount to $197.03 million, including $172.4 million with Australia; $4.8 million, Italy; $1.11 million, Spain; $9.74 million, France; and $8.98 million, Germany.
“All of these will not be affected,” Dominguez said.
The projects in the pipeline that will be affected are with France, which cover the Metro Manila BRT, and those with Germany valued at around $36 million to fund studies mainly on climate change, he said.
Dominguez said during a recent briefing on the DOF’s 2020 budget at the Senate the government has found a substitute for the 21-million euro loan, while the DOF is now looking for a replacement to finance the Germany-funded program. —Angela Lorraine Celis