US increases development, security aid to RP

MANILA, Philippines - The United States has increased its development and security assistance to the Philippines for fiscal year 2010 to $135.1 million, the Department of Foreign Affairs (DFA) announced yesterday.

Foreign Affairs Secretary Alberto Romulo said the increase granted by the US Congress is higher than the $118.7 million requested by the Obama administration. It also represents an increase of 13 percent from the FY 2009 appropriated budget of $119.7 million.

“The US Congress has always played a key role in ensuring that the alliance between the Philippines and the United States remains strong and is supportive of peace and development efforts in the Philippines, particularly in Mindanao,” Romulo said.

He said “two-thirds of US assistance is devoted to Mindanao for livelihood, basic services, and reintegration of ex-combatants.”

According to Romulo, the increase is part of the Fiscal Year 2010 Omnibus Appropriations Bill which was approved by the US House of Representatives on Dec. 8 and the Senate on Dec. 13. The measure will now go to US President Barack Obama for his signature.

Romulo highlighted the successful meeting between President Arroyo and President Obama at the Oval Office in July this year. During the meeting, Obama said “we are very appreciative of the concrete ways in which her administration has pursued in strengthening ties with the United States,” adding that, “President Arroyo has done outstanding work on a whole range of issues.”

Specifically, the combined Development Assistance and Economic Support Fund was increased to $70.3 million in FY 2010 from $60 million in FY 2009. Foreign Military Financing (FMF) was also increased to $32 million from $15 million over the same period.

Also included in the FY 2010 appropriation is $198 million for the Filipino Veterans Equity Fund that will benefit Filipino World War II veterans.

The DFA added that the Philippines also stands to receive an amount of up to $450 million from the US Millennium Challenge Corp. (MCC), whose board of directors led by Secretary of State Hillary Clinton, recently unanimously reselected the Philippines as compact eligible for FY 2010.

The government remains hopeful that full funding of the Philippines MCC compact agreement is possible due to a rider attached to the FY 2010 appropriations bill that waives the statutory 25 percent funding cap on the Philippines arising from its recent World Bank upgrade to a higher income category.

The DFA said the Philippines is considered by the MCC as one of the countries that has the high capacity to exercise sound political, economic and social policies that will maximize sustainable poverty reduction.

“This is partly due to the Philippines’ progress in fighting corruption,” Romulo said.

 He stressed that “the World Bank’s 2009 Worldwide Governance Indicators noted the Philippines’ improvement in the area of control of corruption.”

Romulo said the country is on track to conclude a compact agreement with US Millennium Challenge Corp. in March 2010 based on the procedures and timelines of the MCC.

But the Philippines was thwarted in its bid to get a multimillion-dollar grant from the MCC for failing to meet performance benchmarks, particularly control of corruption, but was allowed to continue the process of developing a compact grant in 2010.

It was the second straight year the Philippines failed to get a significant share of the US government‘s innovative foreign assistance program.

The Threshold Program, a $21 million grant assistance from the MCC, focused on improving anti-corruption and revenue generation efforts of Department of Finance (DOF), Bureau of Internal Revenue (BIR), Bureau of Customs (BOC) and the Office of the Ombudsman. 

In terms of Development Assistance, the Philippines is second only to Indonesia globally.

The Philippines receives the highest level of International Military Education and Training (IMET) funds in East Asia and the Pacific and the 12th biggest share of US Foreign Military Financing (FMF) in the world.

With regard to foreign military financing (FMF), the US Congress has conditioned the release of US$3 million (out of the increased amount of $33 million) with progress in Philippine efforts to address human rights issues.

“The conditionalities on the FMF is part of the larger entity that consists of the breadth and scope of Philippines-US bilateral relations and is reflective of the constructive engagement between our two governments on the issue of human rights. The Philippine Government welcomes this aspect of our engagement with the US as both our governments are committed to upholding and protecting human rights,” Romulo said.

Romulo noted that the significant increase in US assistance for the Philippines for FY2010 is an indication of its confidence and the value it places on its partnership with the Philippines.

US assistance to the Philippines remains a significant contributor to building peace in Mindanao, strengthening democratic institutions in the country, enhancing economic growth, and reinforcing greater stability in Southeast Asia.