Economic team meets with MCC

MANILA, Philippines – The Philippines has reaffirmed its commitment to the Millennium Challenge Corp.’s (MCC) approach to fighting poverty and conveyed its readiness to enter into another Compact partnership to make the country eligible for bigger US aid.

Philippine Ambassador to Washington Willy Gaa said yesterday the country’s economic management team made the commitment during a meeting – which he also attended – with top MCC officials in Washington last April 25.

The Philippines’ Millennium Challenge Account (MCA) Compact Status bid for 2010 was tackled in the meeting.

The economic team was composed of Finance Secretary Margarito Teves, Budget Secretary Rolando Andaya Jr., and Socio-economic Planning Secretary Ralph Recto.

Also at the meeting were Country Director and Transaction Team Leader for the Philippines Troy Wray, GRP-MCC Point of Contact for Policy Improvement Process (PIP) Ambassador Cesar Bautista, and Finance Undersecretary Rosalia de Leon. The MCC officials at the meeting were led by acting CEO Rodney Bent.

The MCC is a US government corporation established to work with developing countries in achieving growth through sound political, economic, and social policies.

At present, the Philippines is a “threshold country” under the MCC program but it may apply for Compact status by presenting a sustainable five-year program against poverty and corruption.

Foreign Affairs Secretary Alberto Romulo said the Philippines remains on track to receive major grants for key development projects when it was reselected as compact eligible by the Board of the MCC.

Romulo said the Philippine government was able to successfully address misperceptions about corruption in the Philippines and that “this was a major factor in the decision of the MCC Board to rule in our favor.”

He reiterated that out of 17 policy indicators that the MCC maintains, the Philippines scored above the median in 14 indicators.

The Philippines missed the control of corruption indicator by just a hairline of 0.01 below the median. This was largely due to a change in the methodology used, which failed to take into account recent efforts of the Philippine government to fight corruption.

Romulo emphasized that the Philippines is able to correct certain misperceptions, reinforce understanding of the reality on the ground, and highlight the resolve and actions taken to fight corruption and to improve governance.

The Philippines submitted six Compact proposals to the MCC Transaction Team in December for preliminary assessment. The proposals touched on fiscal revenue enhancement, social safety net programs, and community/road infrastructure, among others.

“We take this as an affirmation of their confidence in our efforts to prevail. We also see this as a welcome challenge, in the context of the overall challenges we face in winning a final victory against corruption,” said Romulo on the MCC Board’s readiness to sign a Compact Agreement with the Philippines once the country passes the indicator criteria on corruption. “We are committed to fighting this scourge,” he said.

He defended the Philippines’ ranking for eligibility for the MCA, saying the country failed in corruption, health and education indicators because the MCC changed and increased the median.