US decries role in creation of Peace Fund

As the government initiated bilateral talks with the prospective donors to the Mindanao trust fund, otherwise known as the Peace Fund, the US is protesting an oversight that inadvertently diminished its role as a participant in the creation of the facility.

Finance officials as well as sources from the diplomatic community have said that there has been a flurry of activity between Philippine and US officials following an article that came out in The New York Times detailing the creation of the Peace Fund.

Sources told reporters that US officials have been calling Philippine officials to clarify whether it was being excluded from the Peace Fund effort.

"They thought they were being excluded so we have been receiving repeated calls and we had to make clarifications that they are not being excluded at all," said a Finance official.

The official said US officials wanted a high-profile role in the creation of the Peace Fund.

According to diplomatic sources, however, the Arroyo administration had a lot to prove when it started soliciting help from bilateral donors who are being asked to contribute grant assistance to the Peace Fund.

"It’s a trust fund that we are trying to decide whether we could trust," said a diplomatic source. "We have to wait and see."

The Peace Fund is a pet project of Finance Secretary Jose Isidro Camacho and it is being spearheaded by the World Bank which has already made a commitment to set aside grant funds for the facility.

The US Agency for International Development (USAID) has also agreed to provide the initial funding for the $50-million grant facility intended for development projects in the war-torn areas of Mindanao.

Finance officials said the initial response to the proposed Peace Fund had been encouraging enough to usher its inclusion in the agenda of the annual donors’ consultative meeting in Cebu next month.

The World Bank had also agreed to provide a $2-million seed fund to trigger contributions to the Peace Fund and USAID had agreed to realign $10 million of its $20-million fund intended for the demobilization of the Moro Islamic Liberation Front (MILF).