Millennium Challenge makes way back to PH

By Ian Nicolas P. Cigaral@ipcigaral

December 19, 2023 12:00:00

A key US foreign aid agency started to “re-engage” with the Philippines again seven years after it stopped giving development grants to the country over human rights concerns, a move that coincided with rekindled Manila-Washington ties under the Marcos administration.

The Department of Finance (DOF) welcomed the Philippines’ eligibility to receive another grant package from US-backed Millennium Challenge Corp. (MCC) which, the department said, recognized the country’s “renewed commitment to advancing reforms in good governance, human rights and anticorruption.”

MCC’s Board of Directors made the decision on Dec. 13, with the DOF hoping to access a bigger grant financing in the future.

“The Philippine government stands ready to work hand in hand with the US government toward developing and implementing important programs that will unlock growth in the Philippines,” Finance Secretary Benjamin Diokno said in a statement.

Created in 2004, MCC provides time-limited grants and assistance to countries that meet rigorous standards for good governance, fighting corruption and respecting democratic rights—which are measured using a scorecard.

The Philippines received $20.7 million in aid from the MCC from 2006 to 2009.

The package at the time was in the form of a threshold grant, a contract with MCC that assists countries in meeting requirements to access larger grants by becoming eligible for compact financing, which is a multi-year deal with MCC to fund specific programs targeted at reducing poverty and stimulating economic growth.

Threshold program

The DOF said the old threshold program helped enhance the Philippines’ anticorruption efforts by strengthening the Office of the Ombudsman, and improved tax administration. Those efforts, in turn, made the Philippines eligible for a compact assistance for the first time in 2008.

In 2010, Manila secured a five-year compact deal amounting to $434 million, but human rights concerns over the Duterte administration’s bloody war on drugs prompted MCC not to give another aid when the agreement expired in 2016.

To prove itself worthy of a new aid, Diokno said MCC asked the Philippines to develop threshold programs that would renew state efforts to institute reforms in good governance, human rights and anticorruption.

Should the Philippines succeed, it may get another compact program in the future and enjoy bigger financing from MCC.  Those efforts would be undertaken at a time when President Marcos is mending ties with the United States that had soured during the Duterte administration.

“The Marcos administration is committed to improving anticorruption measures,” Diokno said. “Moreover, the government is mobilizing a whole-of-nation approach in addressing economic growth constraints.” INQ