The decision of President Duterte to reject grants from the European Union (EU) also put at risk the future of Philippine companies that depend on the tariff-free privilege they are enjoying in exporting to Europe.
Senate sources familiar with the issue told the BusinessMirror that the danger from Manila’s abrupt decision to tell the EU it was declining further development aid from the bloc, which has been critical of the administration’s human-rights record, does not arise just from the loss of billions of pesos in development aid for the poor.
One senator noted the bigger challenge to the Philippines could arise from a subsequent decision by the EU—assuming it is piqued by relentless verbal attacks from the Executive branch—to cancel the EU’s Generalized Scheme of Preferences Plus (GSP+) incentives for developing countries. This preferential trade scheme benefits exporters of some 6,000 products to Europe. The Philippines’s duty-free exports to the EU was worth around €1.6 billion ($1.78 million) in 2016, according to EU delegation data. GSP, which was given to Manila after years of lobbying in European capitals, has benefited thousands of medium and small enterprises that export their goods at zero or minimal tariffs to Europe, the source, who asked not to be named, pointed out.
Another Senate source confided they were validating reports that periodic review of the Philippines’s GSP privileges was scheduled this year, and some sectors had earlier expressed concern that certain quarters in the EU might lobby to cancel the GSP on account of the Duterte administration’s relentless attacks on EU critics of how its war on drugs had caused so many deaths and alleged human-rights violations.
To date, the EU has not signaled that it would tie the GSP to the rights issue, but the Business-Mirror source said this latest move —to “snub” further development aid, mostly grants—might deepen the souring of relations with the influential bloc and fuel the calls in Europe to scuttle the GSP trade privileges.
Sen. Antonio F. Trillanes IV, a known critic of the President, slammed the Palace rejection of EU aid as “another reckless and whimsical decision of the Duterte administration”. “Instead of being arrogant and hateful, as President of a developing country, Duterte ought to be grateful there are donor countries that are concerned about the plight of our countrymen and are willing to help us,” the senator added.
But the Chairman of the Senate Committee on Economic Affairs, Sen. Sherwin T. Gatchalian asserts that the loss of P13 billion in foreign aid from the EU is “a price the Philippines can afford to pay in pursuit of truly independent foreign and economic policies”.
However, Gatchalian clarified this decision “does not mean that we are forsaking the economic ties we have built over the years with the EU.” The Philippines, he said, will “always be willing to build meaningful trade relations with any state or regional organization that is willing to deal with us in good faith, as peers and equals.”
Sen. Ralph G. Recto said he was not inclined to advise the Chief Executive on the issue.
“No need to give unsolicited advice,” Recto said in reply to a text query from the BusinessMirror. “They already made a decision. It’s unfortunate those benefiting from [EU] aid will no longer receive them.” But Recto noted that trade with EU member-countries is “another story”. “I don’t think our rejecting aid will result to diminished trade,” he added.
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This report is telling the readers that the Philippines is nothing but a dog to the EU. To eb given scraps and if it decides to think on its own, will be punished by its white masters. Bravo Businessmirror, now tell your white masters, to shove it where the sun never shines.