RP to receive US$21M Anti-Corruption Aid from Millenium Challenge Corp.

19 June 2006 – The Philippines stands to receive US$21 million in aid from the Millenium Challenge Corporation, a U.S. government corporation created to help developing countries achieve sustainable economic development and administer funds from the Millenium Challenge Account.

With this grant, the Philippines is expected to bolster efforts in the area of “stamping out corruption, improving tax collection, and channeling resources for poverty reduction.” Partner agencies for this project are the Office of the Ombudsman, the Department of Finance, and the DOF’s subagencies, the Bureau of Customs and Bureau of Internal Revenue.

The reforms are focused on three main project components. The first component is Data Mining and Predictive Auditing Capacity-Building, which aims to develop a Center for Revenue Enhancement to effectively gather and validate tax collection data. Methodology-Building and Capacity-Building will cover the skills enhancement of the implementing groups of the DOF’s Revenue Integrity Protection Service, Run After Tax Evaders, Run After the Smugglers campaigns through extensive training; investments in information technology, surveillance tools and equipment; and the development of a customs tracking system. The third and last component will build Expanded Investigation teams, to bolster the effort to bring more corruption cases to court. Government investigators will also be given improved compensation and will be subject to performance indicators.

The two-year plan targets an increase in the conviction rate in corruption cases to 40% from 30%, a 10% rise in income tax returns filed by professionals and the self-employed, and a rise in the number of favorable tax appeals decisions to 24 cases from 2 cases. Funding will be administered through the U.S. Agency for International Development.

As part of the government’s initiative to curb corruption, President Gloria Macapagal-Arroyo has requested the Department of Budget and Management to release P1 billion as the government’s counterpart fund to the Millenium Challenge Corp.’s grant. The agency tasked to oversee the parallel anti-corruption campaign is the Presidential Anti-Graft Commission. According to PAGC Chairperson Constancia de Guzman, they are drafting guidelines for how the funds will be utilized by recipient agencies.

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