The impact of US President Donald Trump’s decision to freeze foreign aid—leading to expected funding cuts for various global programs—is likely to be “less severe” in the Philippines, according to the United Nations (UN) Philippines.
According to the UN Philippines, only around 8% of its funding in 2024 came from the US.
Nonetheless, the organization assured its commitment to mitigating any potential impact “through savings, restructuring, and looking for alternative sources of funding – both internationally and domestically.”
The UN Philippines also said that the country’s evolving economic status has shifted the organization’s role, as the Philippines is on track to becoming an upper-middle-income nation.
The UN also expressed its intent to engage with the US administration as it reassesses contributions to the UN system, emphasizing the importance of collaborative efforts in “shaping a strategic path forward.”
Earlier, UN Secretary-General Antonio Guterres voiced concerns over the aid freeze, particularly regarding its effects on development and humanitarian initiatives, and urged for exemptions to protect vulnerable communities.
“The Secretary-General calls for additional exemptions to be considered to ensure the continued delivery of critical development and humanitarian activities for the most vulnerable communities around the world, whose lives and livelihoods depend on this support,” UN spokesperson Stephane Dujarric said.
The United Nations Population Fund (UNFPA) reported that more than nine million people are expected to lose access to health and protection services due to the US funding crisis.
Among the most affected are 1.2 million Afghan refugees and approximately 600,000 Rohingya refugees, who may lose access to lifesaving sexual and reproductive health services following the closure of over 60 health facilities.
The Trump administration’s 90-day freeze on U.S. foreign aid would have minimal direct impact on the Philippine economy, the National Economic and Development Authority’s (NEDA) chief earlier said.
“The U.S. is our number one source of grants, but these account for a small portion of the overall economy,” Socioeconomic Secretary Arsenio Balisacan said.
He said that current flagship infrastructure projects remain unaffected, as they are largely funded by Japan, Korea, the Asian Development Bank (ADB), and the World Bank.
Balisacan noted, however, that an aid freeze could have indirect effects due to the U.S. being a major shareholder in global lending institutions like the World Bank and ADB.
“If lending facilities for official development assistance are affected, it could impact the medium-term prospects,” he said.
While the immediate impact of the aid freeze is expected to be limited, Balisacan emphasized the importance of proactive measures.
On the possibility of U.S. tariff increases, the NEDA chief acknowledged potential repercussions on the Philippines’ integrated supply chains.
“If there’s higher tariffs in the U.S., this could spark retaliation by other countries, which would impact the global economy. But our economy is primarily domestic, with about 60% coming from local activities,” he explained.
To bolster resilience, Balisacan emphasized the need to diversify trade and investments.
“The key is to intensify efforts to diversify our economy and trade, and ensure aggressive participation in bilateral and regional trading arrangements to buffer these disturbances,” he said.
Balisacan highlighted the government’s Philippine Development Plan, which aims to reduce dependence on external aid and prioritize investments in agriculture, industry, and digitalization.
This policy strengthens the country’s economic foundation and reduces vulnerabilities to external shocks, it was explained.
Editor’s Note: This is an updated article. Originally posted with the headline “Impact of US foreign aid freeze ‘less severe’ in PH—UN Philippines.”