THE Washington-based Millennium Challenge Corp. on Thursday removed the Philippines from the group of countries that are eligible for a second funding grant following concerns about the rule of law and civil liberties.
The MCC, an independent US government foreign aid agency, said its board of directors deferred a vote on reselecting the Philippines for a second round of infrastructure grants that it calls “compacts,” subject to a further review.
Although the MCC statement did not specify what the concerns were, the US government has been critical of the rising number of summary executions in President Rodrigo Duterte’s bloody war on drugs.
In 2011, the MCC gave the Philippines $434 million to finance three projects on boosting revenue collection efforts, strengthening poor communities and developing national roads.
The country was then reselected to be eligible to develop a new set of projects with a new grant, which MCC said last October would focus on boosting agriculture and competitiveness.
“[The first] compact is a strong example of how the US and the Philippines worked together to unlock economic growth and lift people out of poverty,” the US Embassy said last October.
“A second compact would try to invest and leverage resources for significant impact on a more focused scope,” it had said.
Economic and Planning Secretary Ernesto Pernia said the MCC decision was nothing to worry about.
“Well, I am not really worried… What is the MCC? In terms of value, it’s $430 million,” Pernia said.
Had the Philippines been chosen for the second tranche of grants, it would receive a smaller value for the continuation of programs and projects, he said.
“It’s really more symbolic in terms of the confidence of those behind the MCC, rather than... having real impact on the economy…. And [with] the amounts of investments that many countries are interested in putting in, I wouldn’t lose sleep over that,” Pernia said.
The US Embassy in Manila confirmed the Philippines’ exclusion from the grant.
The MCC, created by the US Congress in 2003 through the Millennium Challenge Act of 2003, partners only with countries that can show measurable support for a free and open political system with access to open markets. Only countries with proven track records in anti-corruption, civil liberties and the rule of law may partner with the MCC in crafting a development program unique to their local conditions.
In 2010, President Benigno Aquino III wrote a letter to President Barack Obama expressing the government’s commitment to MCC principles and commitment to implement the three projects under it.
The MCC Board approved a $434-million Philippine compact, intended to enable poor communities to develop small-scale projects.
MCC forms partnerships with some of the world’s poorest countries, but only those committed to good governance, economic freedom, and investments in their citizens. With John Paolo Bencito
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