Amazon RDS always uses localhost?

I have a PostgreSQL RDS and I have a Java EE application.

When I use the RDS and run the app locally it works perfect!

However if I package this application, deploy on Elastic Beanstalk, the following error occurs.

Connection refused. Check that the hostname and port are correct and that the postmaster is accepting TCP/IP connections.

When I checked the logs of the application in Elastic Bean, I found the line below

2015-05-11 06:08:25,283 WFMSS INFO  org.hibernate.connection.C3P0ConnectionProvider - C3P0 using driver: org.postgresql.Driver at URL: jdbc:postgresql://127.0.0.1:5432/myDBName

Question:

1. Why is it using 127.0.0.1 when I clearly specified in my persistence.xml the correct connection URL?

Any advice will be greatly appreciated. Thanks.