NEDA sees no significant impact from US foreign aid suspension

National Economic Development Authority Secretary Arsenio Balisacan. (PCO File Photo)

By Darryl John Esguerra, Philippine News Agency

MANILA – The National Economic Development Authority (NEDA) has downplayed concerns regarding the potential effects of United States President Donald Trump’s temporary suspension of foreign assistance, asserting that the move is unlikely to significantly disrupt the country’s ongoing development initiatives.

In a media interview on Monday, NEDA Secretary Arsenio Balisacan acknowledged that while the US is a major source of grants, the suspension would have only 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 when asked about the potential effect of Trump’s order.

He stressed that foreign assistance from the US represents a small fraction of the Philippines’ overall economic activities.

“If you are talking about the economy, that’s a small part,” he added.

Balisacan noted that any indirect effects could stem from the US’s role as a significant shareholder in multilateral lending institutions like the World Bank and the Asian Development Bank (ADB).

However, he assured that these potential impacts would likely be more medium-term in nature.

He also assured that the Philippines’ current flagship infrastructure projects, which are largely funded by countries like Japan, Korea, and multilateral institutions like the ADB and World Bank, 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.

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 Trump ordered a 90-day pause in foreign development assistance.

This period will allow the new administration to review the efficiency and consistency of aid distribution with the country’s broader foreign policy goals.

The US remains the world’s largest donor of international aid, obligating approximately USD68 billion in 2023 for 204 countries, according to official US government data.

In the case of the Philippines, the US is one of the country’s top sources of Official Development Assistance, contributing around USD147.7 million in 2023.