Freeze on US aid will only have minimal impact on PH economy–Balisacan
National Economic Development Authority (Neda) Secretary Arsenio Balisacan acknowledged that while the United States was a major source of grants, the suspension would only have a minimal direct impact on the Philippine economy.
“Not so much directly. And in the short term, much of our loans now are with other countries and multilateral institutions,” Balisacan said.
“If you are talking about the economy, that’s a small part,” he said.
Balisacan noted that any indirect effects could stem from the United States’ significant shareholder role in multilateral lending institutions such as the World Bank (WB) and Asian Development Bank (ADB).
However, he said these potential impacts would likely be more medium-term.
Balicasan added that the Philippines’ current flagship infrastructure projects, which were largely funded by countries like Japan, Korea, and multilateral institutions like the ADB and WB, would not be significantly impacted.
“For our current infrastructure flagship projects, not much. Many of those projects are funded by Japan, Korea, ADB, and World Bank,” he said.
‘Stop-work’ executive order
The suspension, announced by the US State Department, involves a “stop-work” order for all existing foreign assistance, in addition to halting new aid, as US President Donald Trump ordered a 90-day pause in foreign development assistance.
This was in response to the Executive Order by Trump on “Reevaluating and Realigning United States Foreign Aid.”
This period will allow the new administration to review the efficiency and consistency of aid distribution with the country’s broader foreign policy goals.
US Secretary of State Marco Rubio has paused all foreign assistance funded by or through the State Department and the US Agency for International Development (USAID), which has several funded projects in the Philippines.
“President Trump stated clearly that the United States is no longer going to blindly dole out money with no return for the American people,” read the Jan. 26 statement by the US State Department.
The US remains the world’s largest donor of international aid, obligating approximately $68 billion in 2023 for 204 countries, according to official US government data.
In the case of the Philippines, the United States is one of the country’s top sources of Official Development Assistance, contributing around $147.7 million in 2023. —WITH A REPORT FROM PNA
