Drilon hopes PH ready
for fallout after rejecting EU aid

May 19 2017 7:05 PM

Senate President Franklin Drilon
Senate President Franklin Drilon

Senate Minority Leader Franklin Drilon said he was saddened by the decision of the Duterte administration to stop receiving developmental aid from the European Union (EU).

He expressed deep concern that the move may negatively affect trade relations between the Philippines and EU member countries.

“I am saddened by the decision. The EU has been a reliable trading partner and their assistance, by way of grant or aid, extended to the country through the years has been benefiting our people particularly those in the impoverished communities in Mindanao,” Drilon said in a statement on Friday, May 19.

“I hope that the government has studied this thoroughly and carefully and is prepared to deal with the consequences of its decision,” Drilon said.

Drilon said that “the EU has been a Philippine’s committed partner in the pursuit of peace and development in Mindanao.”

He emphasized that because of EU’s support to the peace process in Mindanao, it has provided around 80 percent of the total funds to the Mindanao Trust Fund, a fund facility set-up by various donors to fund socio-economic recovery of conflict-affected communities of Mindanao.

On the economic side, Drilon said the Philippines and EU’s partnership has resulted in billions of pesos in trade, helping to boost the economy and generate job opportunities.

“We must not forget that aside from developmental aid, we are beneficiaries of the Generalized System of Preferences Plus (GSP+) that allows the Philippines to export 6,274 products to the EU at zero tariff, including the famous tuna of General Santos City,” Drilon stressed.

This makes EU as one of the biggest trading partners of the Philippines, according to Drilon, with the total trade between the EU and the Philippines reaching 12.9 billion euros or roughly P704 billion in 2015.

“Of which 1.38 billion euros were from products qualified under the GSP+ scheme,” Drilon said.

For the first quarter of 2017, data provided by the Philippine Statistics Authority (PSA) showed that exports to EU constitute 15.5 percent of total exports of the Philippines, making the EU as the fastest growing export market for Philippine products, Drilon said.

Drilon said that before the Philippines was accepted in the GSP+ in 2014, Filipino exporters had suffered heavily from the declining trade with the EU, from 8.5 billion euros in 2002 to 5.1 billion euros in 2014.

However, Drilon said “the decision might trigger the removal of the Philippines from the GSP+.”

“Once GSP+ is withdrawn, Filipino producers will be charged tariff rates,” according to Drilon. Citing the tuna industry as an example, he said the country’s tuna will be imposed a 22% tariff once GSP+ is removed.

The value of tuna exports to EU member countries such as Germany, United Kingdom and the Netherlands in 2015 amounted to $133.12 million or roughly P6.65 billion, he n

said, citing the PSA data.

He said that the tuna industry, as well as those products enjoying zero tariff, stood to lose millions of pesos in case the GSP+ would be terminated.

The minority leader said that he did not believe that the EU would interfere in the country’s internal affairs, saying that “the Philippine and EU’s long-standing partnership has always been based on mutual respect and cooperation.”

“While it is the right of any country to accept or reject any grant from another country or institution, I do not agree that the grants offered by the EU would give it a license to interfere in our country’s internal affairs,” said Drilon.

“We are just being asked to adhere to our treaty obligations and they did not come from the EU but from the treaties that we have signed and ratified,” Drilon concluded.