In a diplomatic escalation with economic implications, Philippine President Rodrigo Duterte has suspended all loan and grant agreements with countries that support a United Nations probe into his brutal drug war.

The executive order, which targets the United Kingdom, Australia and 16 other countries, has rekindled rights-related tensions with the Philippines’ traditional Western partners, and will diminish financial aid and assistance amid an already slowing economy.

A leaked August 27 memorandum revealed that the Office of the President ordered a suspension of any negotiations or signing of any grant and loan agreements with nations that voted in July for a formal probe at the United Nations Human Rights Council.

Signed by Executive Secretary Salvador Medialdea, the executive order states that the ban will remain in place “pending the assessment of our relations with these countries” and can only be lifted by the Office of the President.

The memo was issued “in light of the administration’s strong rejection of the resolution of the UN Human Rights Council.” It also follows on Duterte’s 2017 decision to reject aid from the European Union amid disagreements over human rights issues, namely in relation to the drug war.

At the time, the Philippine government complained about supposed “conditionalities that will affect our sovereignty” in EU grants to the Philippines. It’s not clear whether the reported memorandum is in effect but the Duterte administration is signaling diplomatic escalation with any country that openly criticizes his drug war.

Philippine President Rodrigo Duterte holds a Galil sniper rifle at Camp Crame in Manila on April 19, 2018. Photo: AFP.Noel Celis
Philippine President Rodrigo Duterte holds a Galil sniper rifle at Camp Crame in Manila, April 19, 2018. Photo: AFP / Noel Celis

The campaign has resulted in the extrajudicial killings of thousands of drug suspects, perpetrated by both police and vigilante groups. Police officials have claimed that they have only opened fire in self-defense, a blanket claim rights groups and others have hotly contested.

In July, Iceland sponsored a resolution supported by 18 other member states of the UN’s 47-member Human Rights Council to conduct thorough and independent investigations into the reported extrajudicial killings.

The draft resolution also called on the Philippine government to “refrain from all acts of intimidation or retaliation” against UN offices and related efforts to investigate the drug war.

In March 2018, Duterte said any International Criminal Court investigators who entered the Philippines to probe the drug war would be fed to crocodiles. This month, his government announced it would bar entry to UN investigators, with Foreign Secretary Teodoro Locsin Jr referring to UN human rights experts as “bastards.”

Argentina, Australia, Austria, Bahamas, Bulgaria, Croatia, Czech Republic, Denmark, Fiji, Iceland, Italy, Mexico, Peru, Slovakia, Spain, Ukraine, the United Kingdom and Uruguay supported the resolution.

Fifteen nations abstained while the Philippines and China, along with Qatar, Saudi Arabia, Somalia, Afghanistan and Democratic Republic of Congo, voted against the resolution. Japan, a long-time Philippine partner, abstained from the vote.

Upon its adoption by the UN later that month, UN rights chief Michelle Bachelet was accordingly directed to prepare a “comprehensive report on the human rights situation” in the Philippines by June 2020.

EDITORS NOTE: Graphic content / (FILES) This file photo taken on July 8, 2016, shows police officers investigating a dead body of an alleged drug dealer, his face covered with packing tape in Manila.Duterte ends his first year as Philippine president on June 30, 2017 as a hugely popular leader, after taking Filipinos on a promised "rough ride" of drug war killings and foreign policy U-turns. / AFP PHOTO / NOEL CELIS / GRAPHIC CONTENT
Police officers investigating a killed alleged drug dealer his face covered with packing tape in Manila. Photo: AFP/Noel Celis

Laila Matar, deputy Geneva director at Human Rights Watch, described the move as an important step towards “accountability for thousands of drug war-related killings and other abuses, and will provide hope to countless survivors and families of victims.”

The Philippine Dangerous Drugs Board has slammed the resolution, stating it violated the country’s “sovereignty and territorial integrity” and that the “principle of non-intervention in the internal affairs of states must be observed by all,” including the UN.

“While the world drug problem is a common and shared responsibility, we underscore the sovereign right and duty of the Philippines to determine and implement the best approaches to address its drug problem, considering its historical, political, economic, social and cultural contexts and norms,” it said.

The Philippine government has also considered withdrawing its membership from the UN Human Rights Council to express diplomatic discontent with what it perceives as a pervasive bias against its drug policy.

The presidential palace, however, has dismissed the widely reported memorandum as fabricated.

“The President has not issued any memorandum suspending loans and negotiations involving 18 countries that voted in favor of the Iceland resolution,” Philippine Presidential Spokesman Salvador Panelo said in response to the reports.

Foreign Secretary Locsin, however, implied its veracity by claiming that the Philippines would lose “nothing big” by severing aid and loans from the countries mentioned in the memorandum.

Philippine Foreign Secretary Teodoro Locsin Jr makes a point in a file photo. Photo: Twitter

He claimed that the amount in grants and loans at stake was “not worth the candle considering the amounts and the terms and the money goes mostly to consultants…small time,” the chief diplomat added.

“Experience showed the same countries that voted for the Iceland resolution never gave or lent us anything worthwhile or offered with conditions more onerous than the loans we’d have to pay back,” he tweeted.

In a thinly veiled attack on Mexico, which the Philippines president has described as a “narco-state” and was among the nations that supported the UN probe resolution, Locsin said, “we don’t want to borrow money from those whose defense of the drug trade and attacks on anti-drug trade campaigns makes us mighty suspicious about where the money’s coming from.”

“Yes, we pick and choose. To take indiscriminately is actually criminal. For example, we can never take from narco-states like the most notorious one, which voted for the Iceland resolution and had the entire Geneva laughing. Really,” he added.

Philippine Defense Secretary Delfin Lorenzana has sought an exemption from the ban for the military, arguing that some of the foreign  loans and grants are crucial to armed forces’ modernization and national security.

For instance, strategic partners such as Australia, which is in the process of transferring six offshore patrol vessels to the Philippines, has been a key counterterrorism partner in recent years,

“Maybe we are going to request for exemptions because we really need to transact business with another country,” Lorenzana said. “I will talk again to higher ups on how we can go around the directive of the president but we will follow the directive,” the defense secretary said.

The contested memorandum has lit a fire under the political opposition. Vice-President Leni Robredo said the decision to sever aid with major donors is regrettable “because this could have been additional funding for programs for the poor.”

Australia alone contributed US$82.8 million in Official Development Assistance (ODA) to the Philippines in the past year, with as much as $79.7 million allocated for the fiscal 2019-20 period.

The UK and EU members who supported the resolution are also among the top contributors of grants and ODA to the Philippines.

This photo taken on May 18, 2016 shows a family inside their house at an informal settler area in Davao City, in southern island of Mindanao. Selling coconut wine in one of the shantytown drug heartlands of Philippine president-elect Rodrigo Duterte's hometown is a lot easier than a few years ago. / AFP PHOTO / TED ALJIBE
A Filipino family inside their house at an informal settler area in Davao City, in southern island of Mindanao. Photo: AFP/Ted Aljibe/

The UK, one of the targeted countries, was the top source of donations after the 2013 Haiyan superstorm disaster, contributing as much as $95.2 million in humanitarian aid, while the EU has in recent years allocated close to $356 million for various projects in job creation, renewable energy and health and assistance to vulnerable populations.

“It would have been OK if we had our own money to replace it, but if we don’t have any, the beneficiaries of these programs would be the ones who would sacrifice,” the vice-president said. “[I]f I were the government and I have nothing to hide, I would welcome [a UN probe].

“If they conduct investigations and the probers don’t find anything, wouldn’t that be an affirmation that what [the Duterte government] has been saying is correct?”