DESPITE clarification from Malacañang that the decision to reject aid from the European Union (EU) was not absolute, Senate Minority Leader Franklin Drilon still expressed serious concern over the negative effect it could bring to trade relations between Philippines and EU member-countries.
“The decision might trigger the removal of the Philippines from the GSP+ (Generalized System of Preferences Plus),” Drilon warned.
GSP+ allows the Philippines to export 6,274 products to the EU at zero tariff, including tuna from General Santos City.
“Once GSP+ is withdrawn, Filipino producers will be charged tariff rates,” said Drilon. Tuna, for instance, will be charged a 22 percent tariff, making it more expensive, he explained.
When the country was granted the GSP+ by the 28-member bloc in 2014, it was expected to comply with two stringent requirements, namely non-diversification of exports and the ratification and implementation of 27 international conventions on human and labor rights, environment and governance principles.
Malacañang on Thursday said it would no longer accept aid from EU to assert the country’s independent foreign policy.
The decision was based on the recommendation of the Department of Finance to reject new EU grants that “may allow it (EU) to interfere with the internal policies of the Philippines.”
But the Palace clarified that the rejection would be made on a “case-to-case basis” and humanitarian aid for victims of calamities would still be accepted as long as it is “unconditional.”
“I hope that the government has studied this thoroughly and carefully and is prepared to deal with the consequences of its decision,” the Senate minority leader said.
Drilon said he was saddened by the decision because the EU has been a reliable trading partner and EU assistance extended to the country through the years had benefited many Filipinos, particularly those in impoverished communities in Mindanao.
The EU is also supporting the peace process in Mindanao, providing 80 percent of the funds in the Mindanao Trust Fund, which finances socioeconomic recovery programs in conflict-affected communities in Mindanao.
Analyst Ramon Casiple is not discounting the possibility of the Philippines’ removal from the GSP+, noting that the decision of the Philippine government to cut aid could further alienate the EU.
“Certainly, the announcement has its effect, in further alienating EU and rattling our economic managers,” said Casiple, executive director of the Institute for Political and Electoral Reform.
He said the EU GSP assessment team visited the country early this year, and the Philippines’ decision to cut EU aid might affect their assessment.