MCC sees ‘terrific’ opportunities for PHL

Millennium Challenge Corp. Chief Executive Officer Alice P. Albright — COURTESY OF DEPARTMENT OF FINANCE FACEBOOK PAGE

THE Millennium Challenge Corp. (MCC) is seeing “terrific” opportunities for the Philippines, which it says is on the right track after once again being eligible for its aid programs.

“We’re looking at a lot of the data for the Philippines. I think that the country has some terrific opportunities ahead,” MCC Chief Executive Officer Alice P. Albright said in a roundtable interview with reporters on Friday.

In December, the MCC Board selected the Philippines as eligible to develop a threshold program, which is a smaller grant focused on policy and institutional reforms.

“The Philippines, amongst several other countries, stood out as countries that are really on the right pathway forward. We’re back here and we’re just delighted about that. We think there’s a promising future,” Ms. Albright said.

The Department of Finance last week met with MCC executives to discuss the steps moving forward.

Finance Secretary Ralph G. Recto was also quoted saying that there is a need to expedite the process and eventually access compact grant resources.

The Philippines’ last threshold program concluded in 2009 and focused on improving anti-corruption across government agencies.

Its last compact program was a $434-million deal which closed in 2016. It supported reforms to strengthen revenue collection and community-driven development projects as well as the rehabilitation of a national road in Samar.

According to the MCC, a compact program is a five-year agreement that targets programs on poverty reduction and economic growth. If the country does not qualify for a compact, it may be eligible for a threshold program, which is smaller grants.

Ms. Albright noted that there was a change in legislation that allowed the Philippines to re-enter a threshold agreement even after its compact ended in 2016.

“We recently had a change in the legislation that allowed us to have a threshold with a country after the country had a compact. That is a new feature and so we’re very excited about that because it continues to give us more options and flexibilities and choices and pathways in working with different countries,” she said.

“The Board of Directors for the first time just this December decided to utilize that threshold after compact capability.”

The Philippines and Tanzania were the first two countries selected for threshold programs after a compact program.

“The country stood up in our latest selection and eligibility round as being very eligible for the threshold, so we’re very excited about that and getting started on it,” Ms. Albright said.

She also noted it may be possible for the Philippines to be eventually selected for the larger-scale compact program in the future.

“Is it possible that the country gets selected for a larger program at some point in the future? Sure, possible. But we’re very much focused on the threshold program right now,” she said.

To become a candidate for the programs, the country must not exceed a certain per-capita or income level and must not be subject to any number of US sanctions.

“In determining country eligibility, the Board considers: a country’s performance on the scorecard indicators; the opportunity to reduce poverty and generate economic growth within a country; and the availability of funds,” according to the MCC’s website.

Candidates for subsequent compact selection are also reviewed based on their performance implementing prior compact programs, country progress towards achieving its results, and the nature of the country’s partnership with the MCC, among others.

Meanwhile, the scorecard itself measures performance of the country on the policy criteria mandated in the MCC’s authorizing legislation. 

Based on the Philippines’ latest scorecard on the website, the Philippines passed half of the overall scorecard and the democratic rights criteria but failed the control of corruption indicator.

The Philippines also failed to meet the performance standard for other indicators such as fiscal policy, access to credit, rule of law, freedom of information, health expenditures, education expenditures, immunization rates, and girls’ secondary education completion rate.

“We do scorecards and sort of an evaluation internally of every country every year… it’s very evidence-based about who gets selected and why,” Ms. Albright added.

The MCC chief executive said the threshold program is still in the early stages and that it has not yet narrowed down a focus area or financing amount.

“The first step will be for the government to appoint what we call a national coordinator, which is the main counterparty that we will work with. But we can work as quickly as the government is able to work going forward, and we expect to have some very good conversations, and we expect things to unfold very, very quickly,” Ms. Albright said.

The MCC was created by the US Congress in 2004 and focuses on providing financing to developing countries. — Luisa Maria Jacinta C. Jocson