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10/11/2009: RP’s Ranking (Control of Corruption) Improved from 39th to 33rd Among Low-Income Country (LIC) List

Manila, 10 November 2009 - Foreign Affairs Secretary Alberto G. Romulo today acknowledged the Millennium Challenge Corporation (MCC) scorecard of the Philippines showing below the median scores in a number of indicators, but stressed that these resulted from “technicalities in evaluation.”

“On the CoC (Control of Corruption) indicator, the Philippines’ ranking has actually improved by six notches, from 39th to 33rd, above the 37th rank of the median country out of the 73 countries in the LIC list of the MCC, “Secretary Romulo said.

Comparing the results with last year’s MCC scorecard, Secretary Romulo pointed out that the country would have showed improved performances had it not been elevated to a higher income category. The failing marks, he stressed, resulted chiefly from the country’s transition from a low-income country (LIC) in 2008 to lower middle-income (LMIC) in 2009, based on its improved income per capita.

“The country’s failing grades in some areas is the result of technicalities in evaluation, such as the country’s rise from a low-income country to a lower middle-income country. Higher income countries are measured using more stringent standards,” Secretary Romulo said.

“The improvement in the country’s income category is a clear reflection of the Philippine Government’s sustained commitment to economic and governance reforms amidst the global financial crisis,” he added.

The World Bank increased RP scores in governance report

“We also recall,” the Secretary added, “that in the 2009 World Governance Indicators (WGI) report published by the World Bank Institute, the Philippines demonstrated significant improvements in four out of six governance dimensions namely, government effectiveness, regulatory quality, rule of law and control of corruption. In fact, the biggest jump was recorded in the control of corruption where our score increased from 22.2% to 26.1 %.”

The WGI report, together with its third party sources of information, represents the largest publicity available data resource on governance in the world. It is also used by the MCC, in combination with other indicator reports, in making its allocation decisions.

The MCC scorecard showed the country received passing marks for Political Rights (53%), Civil Liberties (62%), Government Effectiveness (79%), and Voice and Accountability (59%).

Under “Economic Freedom,” the Philippines passed in five categories, namely, Regulatory Quality (74%), Land Rights and Access (58%), Trade Policy (65%), Inflation (48%), and Fiscal Policy (56%), but failed in Business Start-Up (34%).

Under the second broad category “Investing in People,” the country showed a passing mark for Natural Resource Management (84) but failed under Immunization Rates (41%), Girls’ Primary Education Completion (44%), Health Expenditures (19%) and Primary Education Expenditures (32%).

RP intensifies fight against poverty and corruption

As the World Bank report on the improved income status of the Philippines came out last July, the Philippines remains hopeful that being placed in a higher income category will not derail the bid for an MCC full Compact grant in 2010. The country’s compact proposal for 2010-2014 is currently under technical review.

The Compact proposal, which is in the final stages of development, focuses on three 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).

Secretary Romulo stressed that, “While the gains from the government’s anti-corruption efforts were clearly manifested in notable international governance reports, the Philippine government will continue to build on these gains.”

The Philippines’ plan of action under MCC’s Policy Improvement Process (PIP) to strategically address policy performance issues such as Control of Corruption is also being reviewed by the MCC. The MCC has recognized the high degree of political commitment the Philippine government has demonstrated to this process which is a product of a multi-stakeholder effort.

The Philippines’ 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.

MCC remains confident in RP as potential Compact partner

Recognizing the Philippines’ continuing commitment to good policy performance, MCC Vice President for Compact Development Darius Teter signed a memorandum of understanding on 609 (g) under the Millennium Challenge Account Act of 2003, with Philippine Ambassador to the United States Willy C. Gaa last October 16 in Washington DC.

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

“The Philippines is ready to be a Compact partner. Concluding a Compact agreement soon will further support our anti-poverty program and efforts in the areas of ruling justly, investing in people and promoting economic freedom,” Secretary Romulo assured. END