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The Philippines is seen treading the right path with “terrific opportunities” ahead that make it eligible again to access grants that could help boost economic growth, a ranking US aid official said in a report by Philippine Star.
In a briefing late Friday afternoon, Millennium Challenge Corp. (MCC) CEO Alice Albright said the independent foreign aid agency of the US would start working with the Philippine government on areas that need to be focused on.
MCC re-engaged the Philippines in December last year through the development of threshold programs that will support policy and institutional reforms.
“We looked at the data for the Philippines and I think the country has some terrific opportunities ahead,” Albright said.
“The Philippines was among the countries that stood out that are really on the right pathway forward. We are back here and we are just delighted and we think there’s a promising future,” she said.
Created by the US Congress, the MCC partners with the world’s poorest countries that are committed to just and democratic governance, economic freedom and investing in their populations.
The MCC provides time-limited grants promoting economic growth, reducing poverty and strengthening institutions. It uses a scorecard to assess every country’s eligibility for grants.
Based on the Philippine scorecard, the country fared well in terms of economic freedom particularly on regulatory quality, trade policy, gender in the economy, land rights and access, and employment opportunity. However, the Philippines needs improvement in fiscal policy and access to credit.
On governance, the Philippines scored high in civil liberties, political rights and government effectiveness. But the country did not do well in corruption control, rule of law and freedom of information.
The MCC likewise looked at how the Philippines invested in its people. The country scored well in natural resource protection and child health, but not so much on health and education expenditures.
Finance Secretary Ralph Recto said there is a need to expedite the threshold process and access compact grant resources for the Philippines to swiftly benefit from the program.
Recto added that MCC assistance could be instrumental in reducing corruption and improving revenue administration efficiency through digitalization, supporting infrastructure projects, enhancing agricultural productivity to curb inflation, and improving the education sector.
Albright said there are no specifics yet on what the program will be about.
“The first step will be for the government to appoint a national coordinator that we will work with. We’ve had some very good initial conversations and we expect things to unfold very quickly,” Albright said.
“Is it possible that the country gets selected for the larger program at some point in the future? Sure, it’s possible, but we’re very much focused on the threshold program right now,” she said.
A threshold program is a contract between the MCC and a country, which provides financial assistance in meeting requirements to access large-scale grants by becoming “compact eligible,” through support for policy and institutional reforms by addressing a country’s constraints to economic growth.
A compact program, on the other hand, is a multi-year agreement between the MCC and an eligible country to fund specific programs targeted at reducing poverty and stimulating economic growth.
Previously, the Philippines enjoyed US government support under the MCC’s first compact grant of $434 million which concluded in 2016 and a prior threshold grant of $20.7 million that was implemented between 2006 to 2009.
The threshold program enhanced anti-corruption efforts by strengthening the Office of the Ombudsman, improving revenue administration and increasing enforcement capacity within the Department of Finance.