Beyond Threshold

19 May 2008 – The Philippines is currently vying for Compact funding from the United States' Millenium Challenge Corporation (MCC), which will entitle the government from $60 to $600M in grant support to improve health and education and to build infrastructure.

The Philippines was considered eligible for this multimillion dollar funding in March. However, increased funding under the Compact status will be awarded only after a successful country Threshold program. MCC signed the Philippines for a two-year $21 million Threshold assistance in June 2006. The program, which is being implemented by the Department of Finance and the Office of the Ombudsman, is focused on enhancing anti-corruption efforts and boosting revenue collection under the Bureau of Customs and the Bureau of Internal Revenue. The Office of the Ombudsman is also hard-pressed to increase its annual conviction rate in corruption cases filed before the Sandiganbayan, the country’s anti-graft court.

A team of specialists will embark on a 12- to 16-month preparation to design a new country program for MCC funding. Dante Canlas has been designated as the “Point of Contact,” or the point person in preparing the proposal. Dr. Canlas, an economist and former socioeconomic planning secretary, will head a core team of specialists comprised of economists and private-sector representatives who will conduct strategic consultations and prepare the initial project concepts.

Initial work for the Compact proposal will include setting up public consultations with the private sector and civil society groups. This is aimed at identifying priority sectors and policy areas where urgent reforms are needed. A strong proposal, according to MCC “promotes sustainable economic growth and poverty reduction; identifies specific activities, beneficiaries, expected results and implementation mechanics; and must be implemented within five years.” According to John Hewko, vice president for Compact development for the MCC, the Philippine proposal will be reviewed beginning December 2008 for a chance to qualify for a share in the $2.25 billion grant.

MCC is the US government corporation managing the Millenium Challenge Account (MCA), which receives funds from the United States Congress to fight global poverty. Countries applying for funding under the MCA are evaluated based on 16 policy indicators grouped under the following categories: promotion of political and economic freedom, education and health expenditures, and control of corruption.