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Aug 6, 2010
By JOSEPH G. LARIOSA (© 2010 Journal Group Link International) CHICAGO (jGLi) – The Board of Directors of the U.S. Government’s Millennium Challenge Corporation (MCC) in Washington, D.C. has approved Thursday (Aug. 5th) a $434-million grant to support Philippine government’s development of a “potential compact to reduce poverty through economic growth.” Non-governmental organizations, private sector firms, and the Philippine government and people consulted extensively to design a homegrown program to address key constraints to sustainable development.
Last March, two months before the May 10 elections, the MCC approved portion of this grant but its release was deferred as “final consideration of the compact proposal in order to engage with the incoming administration to secure their commitment to the ideals and principles of MCC and to the compact’s objectives and implementation.”
In a press statement, MCC Chief Executive Officer Daniel Yohannes said, “Congratulations to the people and Government of the Philippines for tackling difficult challenges to create tangible opportunities for growth and prosperity. “The Filipinos have articulated a clear vision to improve the quality of their lives through a technically, environmentally, and socially sound plan. I am confident that the country’s ongoing commitment to positive reforms, accountability and transparency, and the timely implementation of the compact will deliver tangible results.” The $434 million MCC compact provides funding for three major projects. First, the compact includes $54.3-million in investments to computerize and streamline business processes in the Bureau of Internal Revenue. This project will bolster the effectiveness of revenue collection and reduce opportunities for corruption.
Second, the compact includes $120-million to expand Kalahi- CIDSS, a community-based, rural development program. This innovative approach to development strengthens local accountability and empowers poor communities to design and drive the projects they need to increase their incomes and improve their lives. And Third, the compact includes $214.4-million to construct and repair 220 kilometers of Samar Road. This road, which passes through 15 municipalities, will improve access to markets and services for farmers, fishers, and small businesses in some of the poorest provinces in the Philippines. The compact may be signed after a 15-day congressional notification period, which follows MCC Board approval. ? The $434 million compact was initially proposed by the Arroyo government but was never approved by the MCC. By targeting poorer communities and emphasizing local government accountability for public expenditures, the project provides an excellent vehicle for ensuring income benefits that are broadly distributed and combats low-level corruption and “elite capture” of resources.
The Philippines successfully implemented the first phase of its Kalahi-CIDS’s project from 2003 to 2010 in 4,229 communities across 42 provinces, providing a wealth of information for MCC’s project appraisal. The project is expected to benefit 290,000 people over the next 25 years and would overlap with a number of communities participating in the Kalahi-CIDSS project. The Philippines already received nearly $21-million from its two-year program that seeks to improve its revenue administration and anticorruption efforts consistent with the “Medium-Term Philippine Development Plan, 2004-2010,” which was developed under the guidance of President Arroyo.
Millennium Challenge Corporation is a U.S. Government agency designed to work with developing countries based on the principle that aid is most effective when it reinforces sound political, economic, and social policies that promote poverty reduction through economic growth. The MCC program is expected to further accelerate and institutionalize efforts to stamp out corruption , improve tax collection, and channel more resources to poverty reduction programs such as in healthcare, education and social services. The program is administered by the United States Agency for International Development.