NEDA: US Foreign Aid Freeze to Have ‘Indirect Impact’ on the Philippines

The United States’ recent decision to freeze foreign aid is unlikely to have a significant direct effect on the Philippines, according to National Economic Development Authority (NEDA) Secretary Arsenio Balisacan.

“Not so much directly,” Balisacan said when asked about the US State Department’s “stop-work” order. “In the short term, much of our loans now are with other countries and multilateral institutions.”

Limited Economic Impact

While the US remains the Philippines’ top source of grants, Balisacan emphasized that such grants represent only a small part of the country’s economy.

The pause, ordered by US President Donald Trump to review whether foreign aid aligns with his foreign policy, will apply to both existing and new assistance.

Balisacan noted that indirect effects might arise in the medium term, particularly if lending facilities in institutions like the World Bank and the Asian Development Bank (ADB)—where the US is a major shareholder—are impacted.

Funding for Philippine Projects

The NEDA chief assured that the Philippines’ flagship projects are primarily funded by Japan, South Korea, the World Bank, and ADB, which reduces reliance on US aid.

The Department of Foreign Affairs (DFA) is closely monitoring developments regarding the aid freeze.