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11 December 2014

WASHINGTON, D.C.—Because of its strong efforts at policy reforms, including its successful campaign against corruption, the Philippines has found itself eligible for significant funding from the United States to help reduce poverty in the country.

The eligibility of the Philippines for a new five-year grant or compact was announced today by the Millennium Challenge Corporation (MCC), an independent American aid agency created by the US Congress in 2004.

The MCC’s announcement of Manila’s eligibility for a second compact came four years after it awarded the Philippines with $434-million to fund three major poverty reduction projects in the country.

“The selection of the Philippines for a subsequent compact recognizes the significant progress achieved under the current compact and its strong efforts at policy reform, including successful efforts to root out corruption,” the MCC said in a statement issued on Thursday.

Ambassador Jose L. Cuisia, Jr. immediately welcomed the positive development, saying it brings the Philippines one step closer to a second compact that will allow the country to avail itself of US funding to support its poverty alleviation programs.

“The selection of the Philippines for a second compact is a recognition of President Aquino’s commitment to good governance,” Ambassador Cuisia said. “I believe a smooth transition to a second compact will help the Philippines in further institutionalizing good governance policies and reforms.”

Ambassador Cuisia said he was informed by MCC Vice President for Operations Kamran Khan of the approval by the MCC Board of the recommendation to start discussions for a second compact for the Philippines. He then reported the good news to Foreign Affairs Secretary Albert del Rosario and Finance Secretary Cesar Purisima.

“The government has been a strong partner in compact implementation. Selecting the Philippines now allows for a seamless transition from one compact to the next,” the MCC said, adding that the Philippines is currently on track to complete its first compact by May 2016.

Approved in 2010, the first compact provided the Philippines with $214.4 million for the construction and repair of 220 kilometers of Samar roads to improve access to markets and services for farmers, fishermen and small businessmen; $120 million for a development project that empowers communities by encouraging their participation in poverty reducing activities; and $54.3 million for the computerization and streamlining of business processes of the Bureau of Internal Revenue to bolster tax collection and reduce corruption.

Ambassador Cuisia said Manila’s eligibility for a second compact was greatly enhanced after the recent release of the latest MCC scorecard where the country passed 13 out of 20 indicators, including Immunization Rates, Land Rights Access, Rule of Law, and the “must-pass” indicator Control of Corruption.

Rule of Law and Control of Corruption are based on the World Governance Indicators (WGI) where the Philippines recently improved its ranking. Several individual indicators such as the Global Integrity Index, the Transparency International Global Corruption Barometer Survey, the World Justice Project and Freedom House are used to construct the WGI indicators.

“I note the big improvement in the Control of Corruption and Rule of Law indicators in WGI. I am gratified that these have resulted in the Philippines’ positive MCC scorecard in Fiscay Year 2015,” Ambassador Cuisia said.

“I echo our economic managers’ sentiments that this indeed will heighten the confidence level in the Philippines and complement the gains in the economic front,” he added.

Aside from the Philippines, the MCC selected Mongolia as eligible for a new compact and approved efforts to continue developing compacts with Benin, Lesotho, Liberia, Morocco, Niger and Tanzania.  The MCC also voted to make Nepal eligible for a compact; selected Cote d’Ivoire and Sierra Leone to develop Threshold Programs; and approved a $28-million Threshold Program for Guatemala. ###