Madness? | Why US Aid is not good for you or PH

US soldiers bring warships, warplanes, take control and command of 'Operation Damayan' in Haiyan-ravaged central Philippines (Bulatlat File Photo by Pom Cahilog-Villanueva, Nov 2013 /
US soldiers bring warships, warplanes, take control and command of ‘Operation Damayan’ in Haiyan-ravaged central Philippines (Bulatlat File Photo by Pom Cahilog-Villanueva, Nov 2013 /


MANILA – For daring the US and others to withdraw their aid, President Rodrigo Duterte has been called a “psychopath”. For those whose mind has been warped by colonialism and imperialism, they called it plain madness. ‘As a poor country, why would we shun the “altruism” of rich countries like the US?’

But the US would rather not stop with its aid program here. It is the key with which they’ve been maintaining their domination of the Philippine economy and military even after the Philippines’ 1946 nominal independence.

Under the cover of altruism

Data from the US Agency for International Development (USAID) show that from 2001 to 2014, total economic aid to the Philippines amounted to more than $1.94 billion (in current prices). Total military aid in the same period amounted to almost $566.11 million. That’s a combined $2.51 billion in 14 years.

Annually, the US disbursed $138.95 million in economic aid and $40.44 million in military aid, or a combined $179.39 million every year from 2001 to 2014.

For 2015, preliminary USAID data show that the US disbursed $180.62 million in economic aid. There’s no 2015 data yet on military aid from the USAID online database. Reports, however, say that US military assistance for the Philippines was about US$50 million last year and it will reportedly rise to US$79 million in 2016, on top of another US$42 million from the new US-Southeast Asia Maritime Initiative.

US assistance to the Philippines has grown under President Barack Obama and his declared US pivot to Asia. From 2010 to 2014, US economic aid increased by almost 15 percent in real terms annually.

Military aid grew by almost 8 percent every year during the same period. (US economic and military aid data since 1946 can be generated from USAID’s reports & data)

These are just the bilateral aid from the US. The US is also a major contributor to multilateral bodies like the World Bank and agencies of the United Nations (UN), which also provide “development aid” to the Philippines.

That’s a lot of aid money that Duterte would be foregoing when he spurned American patronage.
But again, there’s more to US aid than altruism. From experience, US aid has been used not for development cooperation but for advancing the donor’s interests and agenda. It has consolidated its patron-client relationship with the aid recipient. It has been a useful neocolonial tool for the US to foster continued dependence and subservience, and steer domestic policy-making along its desired paths.

US has also used aid to directly create profit-making opportunities for their transnational corporations (TNCs).

US Aid in education, health, disaster relief for US benefit

Remember how the US used the public education system as an integral part of their colonization campaign in the Philippines? It has succeeded in making Filipinos subservient to the colonizers more than using purely military might.

Colonial education has been so effective that some Filipinos could not imagine life without the US. Their reaction to Duterte’s stance on independent foreign policy is an indication.

Colonial education continues to this day through, among others, the use of foreign assistance. The largest bilateral US aid disbursed to the Philippines in 2015 was in Primary Education, at $25.33 million. Almost half of this amount, $12.49 million, went to the Basa Pilipinas project of the USAID. In this project, the US is developing and distributing teaching and learning materials, English books and reading materials, etc. for local teachers to use for their Grades 1-3 pupils. Another US$5.35 million in US aid was also disbursed for Higher Education in 2015. (See Chart 1)

The second biggest chunk of US aid disbursement last year went to Material Relief Assistance and Services with $20.37 million. They also disbursed $3.84 million for Disaster Prevention and Preparedness; $1.92 million for Emergency Food Aid; and more than $1 million for Relief Coordination, Protection and Support Services.

Should Filipinos thank the US when it is using disaster relief to justify their increased military presence here? The controversial Enhanced Defense Cooperation Agreement (EDCA), for instance, was justified directly with a promise of humanitarian aid and disaster relief. American troops can base in military facilities here so they can pre-position not just their weapons and war machines but also “humanitarian relief supplies”. (Read for instance, US Secretary of State John Kerry’s recent statement on EDCA made last July 2016)US aid bad for PH

Family Planning also traditionally gets a big portion of US aid with disbursement reaching $17.08 million in 2015. Related sectors also get significant amounts such as Reproductive Health Care (US$3.94 million) and Population Policy and Administrative Management (US$0.43 million).

Population control has long been a strategy of US imperialism in the Philippines. In 1974, the USAID and Central Intelligence Agency (CIA) wrote the “Kissinger Report”. It views population growth as threats to US access to natural resources of poor countries. They want to check the number of youth as they will most likely challenge the US imperialism.

The Kissinger Report listed the Philippines as one of 13 primary target countries for US-led population control effort.

The US has also been funding public health. In 2015, it disbursed $16.04 million in aid for Tuberculosis Control and more than $0.90 million for STD Control including HIV/AIDS. This is like an investment: control of infectious diseases like TB and AIDS helps ensure an efficient workforce. US imperialism exploits for super profits a productive and efficient (and, of course, cheap) labor force. Poor countries with weak public health systems due to imperialist plunder and underdevelopment could not afford to care for massive health outbreaks.

It also directly benefits big US pharmaceutical companies that have monopoly over patented drugs used in these health programs. In the Philippines, the anti-TB campaign is a partnership between USAID and Johnson & Johnson, an American pharmaceutical and consumer goods giant.

US Aid influencing policymaking

US aid in the Philippines exerts its biggest impact on the setting of national economic policies and priorities. As example, Obama has introduced the Partnership for Growth (PFG) initiative, an aid program participated in and coordinated by the USAID, State Department, Millennium Challenge Corp. (MCC) and other US agencies as well as the World Bank, International Monetary Fund (IMF) and various UN bodies.

Through the PFG, the US flexes influence in national policy making such as through the five-year Joint Country Action Plan (JCAP), which identifies priority areas for policy reforms in the Philippines. These have included trade and investment liberalization, deregulation, enforcement of contracts with private business (such as those engaging in public-private partnership or PPP), as well as fiscal and judicial reforms.

An example of how US steers internal policy-making is the PFG’s centerpiece program in the Philippines, which is the $433.91-million grant from the MCC. The MCC is a highly conditional aid. It requires the Philippines to, among others, maintain so-called “economic freedom” to continue receiving the grant.

One of the indicators of ‘economic freedom,’ as designed by the MCC, is the Trade Policy Indicator. It measures the country’s openness to international trade based on average tariff rates and non-tariff barriers (e.g. trade quotas, production subsidies, government procurement procedures, anti-dumping, local content requirements, etc.) to trade.

The “Compact” or agreement between the Philippine government (as represented then by the Aquino administration) and MCC is that the latter may suspend or terminate the grant if the country fails to reverse policies that are inconsistent with the Trade Policy Indicator and other indicators designed by the MCC.

In effect, the US is compelling the Philippines to further open up its market to dumping of imports at the expense of local producers.

Another component of PFG is The Arangkada Philippines Project (TAPP) of the USAID and the American Chamber of Commerce (AmCham). Through the USAID-funded TAPP, AmCham is pushing for 471 specific recommendations that promote the interest of foreign corporations in the country through greater liberalization, deregulation, privatization and denationalization.

These are explicitly stated in “Arangkada Philippines 2010: A business perspective” prepared by the Joint Foreign Chambers of Commerce in the Philippines (JFC), of which AmCham is a key member.

Under the TAPP, the JFC has been issuing Legislation Policy Briefs identifying broad recommendations for Congress and the Executive. Among the JFC proposals is the lifting of constitutional restrictions on foreign investments through Charter change (Cha-cha).

All these are in preparation for the country’s future membership in the US-led Trans-Pacific Partnership (TPP) agreement. The TPP is an ambitious free trade deal and the latest campaign of US imperialism to further consolidate its economic domination in Asia Pacific in the face of a rising China.

Just last March 2016, the US Chamber of Commerce, with funding from USAID under the PFG’s five-year $12.84-million Trade-Related Assistance for Development (TRADE) project, released its “readiness assessment” of Philippine membership in the TPP.

It examined the “consistency of the country’s existing policy framework with the agreement’s requirements and the implied required changes if the Philippines is to meet these requirements”.

As expected, one of the “implied changes” is liberalization through Cha-cha. (The full report may be downloaded here)

Military patronage

Much hype has been created over the US promise of support to the Philippines in case it faced China and other threats.

But the US has been using military aid not to modernize the Armed Forces of the Philippines (AFP) but to maintain its influence and control over our military. US military aid mostly comes in the form of Foreign Military Financing (FMF). The US gives grants and loans so the Philippines can buy US-made weapons and defense equipment and acquire defense services and military training.

Experience shows the Philippines has been helping the US military — it is like a junkyard of their discarded equipment, and it has been buying US arms to wage war on Filipino revolutionaries and activists who are also enemies of US imperialism.

In 2014 $50 million in FMF was disbursed by the US to the Philippines out of the total $57 million in military aid that year. The Philippines is traditionally one of the largest recipients of FMF among all US allies. It ranked fifth in 2014 in FMF, behind Egypt, Israel, Pakistan, and Jordan. The country also accounted for 64 percent of US FMF in East Asia and the Pacific. (Data here)

But again, these military items the country receives under the FMF and other US military aid programs are either surplus or second-hand and antiquated military articles. Also, they are not given for free but are sold at a discount (with a portion of the amount shouldered or waived by the US through the FMF).

Examples include the five-decade-old US Coast Guard vessels (“Hamilton-class cutters”) that the US Navy has retired and sold to the Philippines. Since 2012, the Philippines has already bought two of these decommissioned ships for about US$25 million – and a third one is expected soon – through the FMF, Foreign Military Sales (FMS) and Excess Defense Article (EDA) programs.

The weapons systems of the ships have also been removed by the US prior to their turnover to the Philippine Navy. PH had to separately buy from the US these vessels’ weapons and guns and additional technology including radar system, anti-ship missile system, etc.

As such, US military aid has also provided business for the US military industrial complex.
Aside from FMF, other US military aid programs in the Philippines include counter-narcotics, military education and training, cooperative threat reduction, and counter-terrorism fellowship program. (See Chart 2)
US Aid in PH

Along with annual military exercises under the Visiting Forces Agreement (VFA), military aid fosters complete dependence of the AFP on US military technology, hardware, and expertise. It also helps justify the continued presence of American troops in the country.

But despite decades of US military patronage, the AFP remains one of the weakest and least modernized in Asia-Pacific. The Abu Sayyaf that the US has long been using to legitimize their military presence in the country continues to terrorize the people.

Mutual respect, sovereignty

Foreign aid is not necessarily bad. It is an important element of cooperation among countries promoting development. But the US aid in the Philippines tells us that aid could also be used to perpetuate a skewed relationship between the donor and recipient, between a colonial master and colony.

Such unequal, oppressive and exploitative relation between the US and the Philippines is the real reason why the country is underdeveloped and the Filipinos are starving. If the Duterte administration rejects US aid to pursue a truly independent foreign policy and nurture development cooperation with other countries, based on mutual respect and sovereignty, then we are already taking initial steps to addressing the root causes of our poverty and hunger. (

IBON Foundation, Inc. is an independent development institution established in 1978 that provides research, education, publications, information work and advocacy support on socioeconomic issues.

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  1. · Edit

    He who pays the piper, calls the tune.
    I suggest that anyone interested in this topic read the book “Confessions of an Economic Hit Man”, by John Perkins. This whistleblower book by an insider describes the process that is utilized by the IMF, World Bank, Asia Development Bank and more that are all the tools of USA dominance and control of developing nations. When any leader of a nation refuses the project money offered, that leader is demonized in the Western main stream media, the US National Endowment for Democracy begins funding NGO’s that begin undermining the legitimately elected government to create either a soft or hard regime change. If everything else fails, the assassin’s are sent in. Any national leader that fails to obey the dictates of the “Sole Super Power” is targeted. Already, President Duterte has claimed that the CIA want him dead. Let us hope that that does not happen, because he has set an ambitious agenda for the next 6 years that can free this nation from oligarchy induced poverty and foreign control. The legacy of colonialism remains intact, the evidence is the ongoing massive poverty that impacts the vast majority of the people.

  2. $32 billion in business investment. That’s what it cost for Duterte to sell PH to the Chinese. How much do you think was put into a personal account in HK for Duterte. Until PH roots out corruption, the country will never be self sufficient – rather they will continue to rely upon OFW’s for families just to eat. PH has become a dependent society and Duterte just upped the ante in that dependency.

  3. This article is good with facts, but expresses decidedly dubious analysis. Leaps of logic abound, and betray a pre-judged bias before the author starts. Assistance with education resourcing is no more colonial than purchasing Philippines goods and services – if there is fault with the resources developed, the author would be better advised to become involved with the development of those resources.
    If the encouragement of employment of Philippine human resources is to be classed as neo colonialism, the Philippines has no avenue to provide services internationally to one of its largest trading blocs.
    On the subject of T.P.P. the author is on much stronger ground, however the forces of U.S. politics seem to have forever doomed this excessive leap towards unregulated cross border trade and devaluation of individual sovereignty to the scrap heap. Let’s hope it remains there.
    As for military aid, it beggars belief that the author attaches such negative motives to the cut rate and sometimes outright free passing of older generation equipment to allied nations. The author would apparently only be satisfied if the U.S. funded purchases from third country weapons providers, a patently ridiculous scenario. The availability of the weaponry is through its designation as surplus but functional, a largess without which the Philippine military would suffer even larger equipment and technology deficits.
    It is an admirable task to examine the nature of aid and assistance, but to do so with a pre-conceived objective of delineating such support as under-handed colonial oppression serves only to make the authors comments eminently ignorable as biassed blithering.
    Tariffs and isolationist trade barriers hurt both exporter and importer nations. Better that the author focus on achieving even handed and fair trade, oppose the spread and passing of pre-fabricated legislation imported through Chamber of Commerce ties, and argue for greater input into how aid is delivered than reject it outright as unwanted.
    The Philippines undoubtedly suffered suppression of its development in the colonial era, but two full generations have been born since that time, the population doubled, and blaming the past for the current position on the ladder of growth is pure sophistry.
    I am vigorously opposed to U.S. imperialism both overt and covert, but this article does little to advance the aspirations of the Philippine nation and provides a useful tool for colonialists to discount opposition as mere rhetoric.

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