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10/12/2009: Unanimous Compact Eligibility Reselection for FY 2010 Reaffirms RP’s High Capacity as MCC Partner - Romulo

10 December 2009—The Philippines was unanimously reselected Compact eligible for FY 2010 today by the Millennium Challenge Corporation’s (MCC) Board of Directors chaired by U.S. Department of State Secretary Hillary Clinton.

“The reselection reaffirms both MCC’s confidence in the Philippines’ high capacity as development partner and the Philippine Government’s highest level of political commitment to good governance,” Foreign Affairs Secretary Alberto G. Romulo enthused.

This is the third time that the Philippines was endorsed as Compact eligible, allowing the country to qualify for a large scale-grant for FY 2010 under MCC’s Millennium Challenge Account (MCA) program.

In a press statement issued after the Board Meeting, MCC said that “in FY 2010, the Philippines and Indonesia graduated from the low income country category (LIC) to the lower middle income country category (LMIC). Graduation to a higher income category, as well as other factors including higher medians and changes to the indicator system, can impact a country’s indicator performance, while not necessarily reflecting a change in policy performance.”
MCC added that “in making its decision to reselect the Philippines and Indonesia, the Board took into consideration each country’s current indicator performance as an LMIC, as well as the information that the Philippines and Indonesia would have met the criteria as a low income country.”

Secretary of State and MCC Board Chair Hillary Clinton, in a visit to Manila last 12 November 2009, said that the “the Philippines should not be penalized for its own success”, referring to the Philippines’ income reclassification from a low-income country (LIC) to a lower-middle income country (LMIC) category, which affects MCC funding for RP’s Compact proposal under the Millennium Challenge Account (MCA) Act of 2003.

Congresswoman Sheila Jackson Lee (D-Texas) also observed that “despite the change in standards, the Philippines exceeds ten (10) out of the seventeen (17) indicators on the MCC scorecard.” Congresswoman Jackson Lee added that this development is remarkable given the shift in income classification.

The country’s Compact proposal for 2010-2014, which is in the final stages of development, focuses on three (3) high-impact projects - Secondary National Roads Development (SNRD); Kapit-Bisig Laban sa Kahirapan-Comprehensive and Integrated Delivery of Social Services (KALAHI-CIDSS) and Integrated Revenue Information System (IRIS).

The Philippines’ plan of action under MCC’s Policy Improvement Process (PIP) to strategically address policy performance issues such as Control of Corruption (COC) is also being reviewed by the MCC. The PIP will monitor progress in preventive measures against corruption such as improving transparency in budget delivery, institutionalization of a balanced scorecard system on improved frontline public services in specific national agencies and development of selected local government units (LGUs) as “sparkplugs” for economic development.

On 16 October 2009, MCC Vice President for Compact Development Darius Teter signed a Memorandum of Understanding on 609 (g) under the Millennium Challenge Account (MCA) Act of 2003 with Philippine Ambassador to the United States Willy C. Gaa in Washington DC.

The MCC will provide a pre-Compact assistance worth $5.57 million to help the Philippines complete beneficiary analysis, engineering designs, and environmental and social impact assessments for the Compact proposal.

As part of its Open Government Innovations Gallery, the White House recently recognized the Millennium Challenge Corporation’s (MCC) commitment to transparency and results. MCC is a U.S. Government agency dedicated to transparency and results in an effort to be accountable and effective in the global poverty reduction work on behalf of U.S. taxpayers.

Since its creation in 2004, MCC has made a great effort to make its collaborative work accessible and open to the public, and to show the progress towards results and final impacts to the American people and its development partners. MCC has approved over $7 billion in poverty reduction Compacts with 20 partner countries.

“With the country’s reselection as Compact eligible for FY 2010, the Philippine Government reiterates its continuing commitment to good policy performance,” Secretary Romulo assured. END.