Philippines passes US corruption test

PHILIPPINE NEWS SERVICE — THE country is eligible to apply for millions of dollars in development grants from the United States to reduce poverty, thanks to its progress in curbing corruption, the corporation administering the fund said this week.

This means the Philippines could get an additional $300-million grant from the US government after graduating to the compact status from the threshold level based on good governance indicators.

President Arroyo welcomed the announcement by the Millennium Challenge Corp. or MCC, a US government corporation that uses aid to encourage good governance in developing countries.

“This is a great day for the Philippines, and the actions by the Millennium Challenge Corporation offers a remarkable validation of the efforts of our government and nation to invest in our people, fight corruption and encourage economic freedom,” Mrs. Arroyo said.

The President said being declared eligible for a large-scale Millennium Challenge grant or compact could bring in hundreds of millions of dollars that could be used to lift people out of poverty.

Countries selected as eligible for a large-scale grant may submit a proposal for a five-year program to reduce poverty through sustainable economic growth.

They then begin consultations with citizens, non-governmental organizations, and representatives of the private sector and government to identify barriers to poverty reduction and economic growth.

MCC teams then work with countries on their compact proposals to ensure that projects meet economic growth and poverty reduction targets. The resulting compact also sets forth how the country plans to ensure financial accountability, transparency, fair and open procurement, and measurable results.

The MCC recently approved a $698-million grant to Kenya, another compact-eligible country.

In its announcement, the MCC board praised the administration’s efforts in three MCC-funded programs to help curb corruption through improved tax and customs administration and to strengthen the Office of the Ombudsman.

“Congratulations to the government of the Philippines for its demonstrated commitment to tackling difficult challenges and improving the lives of its people,” said MCC chief executive Ambassador John Danilovich.

“The MCC board determines eligibility for this large-scale grant funding based on independent indicators that measure good governance, the country’s investments in its people and policies that encourage economic freedom,” Danilovich said.

Mrs. Arroyo assured Millennium Challenge that the government would redouble its efforts to meet its criteria.

“I am deeply honored and pleased that our efforts are paying off and have been recognized in Washington,” the President said.

“I believe that if we can all come together, redouble our efforts and continue to meet the criteria of the Millennium Challenge Corp., the long-term benefit to our nation will be the best gift I can leave this nation when I step down in 2010.”

In June 2006, the MCC board approved a $21-million grant for the Philippines as a threshold country—a level where the government still needs to improve revenue administration and anti-corruption efforts.

The $21-million threshold program was expected to increse the conviction rate in corruption cases filed before the anti-graft court on a cumulative basis from 30 percent to 40 percent; increase the number of cases successfully mediated in the Ombudsman’s Public Assistance Office from zero to 300 a year; increase the percentage of income tax returns filed by professionals and the self-employed by 10 percent; and increase the number of tax evasion cases filed before the Department of Justice.

News of the Philippines’ eligibility under the Millennium Challenge program was marred by an unfavorable report by the US State Department on the country’s human rights record.

The latest report said “despite intensified government efforts to investigate and prosecute these cases [of political killings], many went unsolved and unpunished.”

The US State Department also criticized communist rebels for killing local officials and ordinary citizens and using landmines. It condemned the New People’s Army use of children as soldiers.