Impact of US aid freeze on PH: It’s small anyway
US AID composite image from Inquirer, AP file photos
MANILA, Philippines—In a major policy shift, United States President Donald Trump ordered a suspension of US foreign aid, a move that has profound consequences for many countries, including the Philippines.
The abrupt halt to funding affects ongoing development programs, humanitarian assistance, and disaster response efforts — raising serious concerns among international organizations and aid recipients.
The decision, which comes just weeks into Trump’s new term, signals a broader reevaluation of US foreign assistance priorities. Rooted in his “America First” policy, the suspension reflects Trump’s long-standing stance that US taxpayer dollars should be primarily used for domestic needs rather than foreign assistance.
READ: Trump suspends US foreign assistance for 90 days pending reviews
He has frequently criticized foreign aid as “wasteful spending” that does not directly benefit American citizens.
Article continues after this advertisementHowever, analysts warn that cutting aid programs may backfire, affecting not only millions of recipients worldwide but also the United States’ geopolitical influence, particularly in regions where American assistance has historically countered the growing presence of China and other global powers.
Article continues after this advertisementThe Philippines, a key US ally in Southeast Asia, stands to lose a significant source of financial and humanitarian support should this suspension extend beyond the initial 90-day review period.
What is USAID?
The United States Agency for International Development (USAID) is the primary US government agency responsible for delivering civilian foreign aid.
Established in 1961 by President John F. Kennedy through an executive order, USAID was designed to promote economic development, global stability, and humanitarian assistance in countries recovering from war, natural disasters, and economic distress.
Since its founding, USAID has played a crucial role in addressing major global challenges. Some of its most significant contributions include:
- The Marshall Plan’s Legacy: Although USAID itself was created after the Marshall Plan, it carried forward similar economic assistance programs that helped rebuild war-torn Europe after World War II.
- The President’s Emergency Plan for AIDS Relief (PEPFAR): Launched in 2003, this initiative has provided more than $100 billion to combat HIV/AIDS worldwide, saving millions of lives.
- Global food security programs: USAID has led global food assistance efforts, providing millions of tons of food aid to famine-stricken regions in Africa and Asia.
- Disaster response and reconstruction: The agency has responded to some of the world’s worst natural disasters, including the 2004 Indian Ocean tsunami and the 2010 Haiti earthquake, by providing immediate relief and long-term rebuilding efforts.
- Democracy promotion: USAID has supported initiatives to strengthen democratic institutions, promote free elections, and fight corruption in many developing countries.
For over 60 years, USAID has been an indispensable partner in the development and funding of infrastructure projects, education programs, disaster resilience efforts, and health initiatives in the Philippines. The agency’s presence has helped alleviate poverty, improve governance, and strengthen disaster preparedness in one of the most climate-vulnerable nations in the world.
Why is USAID being suspended?
Shortly after his inauguration on January 20, 2025, Trump signed an executive order freezing all US foreign assistance for 90 days, pending a comprehensive review of foreign aid policies.
The order stated that the “foreign aid industry and bureaucracy are not aligned with American interests and in many cases antithetical to American values” and that they “serve to destabilize world peace by promoting ideas in foreign countries that are directly inverse to harmonious and stable relations internal to and among countries.”
According to the Trump administration, the goal is to reassess aid spending to ensure it aligns with Trump’s “America First” agenda. The executive order directs USAID and the State Department to evaluate whether existing programs provide tangible benefits to US interests.
Consequently, the order declared that “no further United States foreign assistance shall be disbursed in a manner that is not fully aligned with the foreign policy of the President of the United States.”
The administration has cited concerns that foreign aid is often misused, either through bureaucratic inefficiencies or corruption in recipient countries. Trump’s allies argue that billions of taxpayer dollars have been funneled into nations that do not provide reciprocal benefits to the US, further justifying the aid freeze.
During his confirmation hearing before the Senate Foreign Relations Committee, Secretary of State Marco Rubio emphasized the administration’s approach to foreign aid, stating:
“Every dollar we spend, every program we fund, and every policy we pursue must be justified with the answer to three simple questions: Does it make America safer? Does it make America stronger? Does it make America more prosperous?”
Additionally, some administration officials have suggested that funds allocated to foreign nations should instead be redirected to bolster domestic programs, such as infrastructure, border security, and economic stimulus efforts.
Critics of the freeze, including bipartisan members of the US Congress and international aid organizations, argue that the decision was made hastily and without proper consultation with agencies overseeing these programs.
They warn that a prolonged freeze could have catastrophic consequences, particularly in countries heavily reliant on US aid for food security, health programs, and disaster recovery.
“Humanitarian and development assistance accounts for only around one percent of the federal budget; it saves lives, fights diseases, educates millions of children, and reduces poverty,” Oxfam America President & CEO Abby Maxman explained in a statement.
“Suspending and ultimately cutting many of these programs could have life or death consequences for countless children and families who are living through crisis. Suspending it casts uncertainty over all [US] humanitarian and development programming, which makes aid experts unable to effectively plan or operate,” Maxman added.
Further, foreign policy experts caution that halting aid may create an opportunity for geopolitical rivals, such as China and Russia, to step in and exert greater influence in regions that have historically depended on US assistance.
“The sea dispute will certainly become a bargaining chip in US relations with China, especially in regard to trade and tariffs. Everything is on the table to be bargained because Trump is no cold warrior. He is a deal maker who may even sell his own mother,” Roland Simbulan, a retired professor of Development Studies and Public Policy and chair of the Center for People’s Empowerment in Governance, told the South China Morning Post.
Simbulan noted that this approach could be advantageous for the Philippines, as it may lead to a reduction in military tensions between the two superpowers, shifting their interactions toward pragmatic negotiations and strategic compromises rather than an arms race.
How much has the US spent on foreign aid?
The US has been the largest single donor of foreign aid globally, allocating substantial resources annually to tackle global crises and foster economic development. In 2023, the US disbursed a total of $72 billion in foreign assistance, with funding distributed across 209 countries and regions.
This substantial allocation included approximately $58 billion for economic development and $14 billion for military aid. The US supported over 20,000 projects globally, spanning sectors such as health care, education, climate resilience, and governance.
That same year, Ukraine was the largest recipient of US aid, receiving $16.62 billion in economic and military support as it continued to face a continuing invasion by Vladimir Putin. Israel followed with $3.31 billion, primarily in military assistance to ensure regional stability.
Ethiopia and Jordan received $1.77 billion and $1.72 billion respectively, with funds focused on food security, economic development, and military needs. Egypt secured $1.45 billion, mainly for military aid, while Afghanistan received $1.27 billion to support post-conflict recovery.
Other significant recipients included Somalia with $1.21 billion for humanitarian relief and Nigeria with $1.01 billion for health care and security challenges.
USAID assistance to PH
Since 2001, USAID has distributed over $473 billion globally, with disbursements steadily increasing from $7.2 billion in 2001 to a record $43.7 billion in 2023. These funds have been essential in addressing pressing global challenges, including pandemics, humanitarian crises, and economic development.
In 2023 alone, USAID allocated $18.35 billion to economic development, $11 billion to humanitarian assistance, $7.78 billion to health programs, and $3.56 billion to operational and program support. Additional resources were directed toward governance, education, and security initiatives.
The Philippines has been a key recipient of USAID aid since the agency’s establishment. Over $5 billion in assistance has been provided to the country since 1961, with $2.81 billion disbursed between 2001 and 2023. Annual disbursements during this period typically ranged from $100 million to $200 million, supporting disaster recovery, health care, education, and governance reforms.
In 2023, the Philippines received $198 million (approximately P11.1 billion) in USAID assistance, with a large portion allocated to disaster response and health care programs.
USAID has played a crucial role in supporting the Philippines during times of crisis. Following Typhoon Haiyan (Yolanda) in 2013, it provided $143 million — around P8 billion — in emergency relief to rebuild homes, infrastructure, and livelihood. Beyond disaster response, the agency has funded programs to boost economic opportunities in underserved areas and strengthen disaster preparedness and climate resilience.
Health initiatives have been a key focus of USAID’s work in the Philippines. The agency has led efforts to combat HIV/AIDS and tuberculosis while promoting family planning, community-based drug rehabilitation, and mental health awareness.
During the COVID-19 pandemic, USAID provided critical resources, including vaccines and medical equipment, to support the country’s response.
From 2018 to 2023, the agency invested over P14.6 billion, approximately $260 million, in health programs, reinforcing its long-standing commitment to improving public health in the Philippines.
What’s next?
Despite widespread concerns over the suspension of US foreign aid, the Philippine government has sought to downplay its potential impact. Foreign Undersecretary Eduardo Jose de Vega expressed confidence that the country would not be significantly affected, noting that US assistance has been relatively small compared to broader economic engagements.
“And while the US involvement in our economy as a trading partner is still very high, I think even with the freeze, it’s not like it’s going to severely affect us because the aid packages from the US are small right now,” said De Vega.
READ: PH sees no hard impact of US global aid freeze
Similarly, Socioeconomic Planning Secretary Arsenio Balisacan acknowledged that while the US has historically been an important provider of grants, the suspension is unlikely to cause major disruptions to 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.
He added, “If you are talking about the economy, that’s a small part.”
USAID Mission Director in the Philippines Ryan Washburn reaffirmed that the country remains a priority for US assistance despite shifting budget priorities under the Trump administration.
“There are always difficult budget environments and a new administration changes budget priorities, but we understand that Asia and the Philippines will remain a priority in the new Trump administration,” Washburn said last January 15.
READ: PH to remain priority of US aid under Trump, says USAID ex
Read more: https://newsinfo.inquirer.net/2032654/impact-of-us-aid-freeze-on-ph-its-small-anyway#ixzz8zufTqb4Z
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