The Millennium Challenge Corp. (MCC) assured that, even if the term of President Aquino is coming to a close, the implementation of its second compact with the Philippines will continue.
MCC Department of Compact Operations Vice President
Kamran M. Khan told reporters
on Friday that the granting of the second compact to the Philippines was an “apolitical” move for the US foreign-aid agency, which
transcends administrations.
Khan said the Philippines is the only country given a second compact by the MCC a year ahead of the completion of its first compact. The decision of the MCC to grant a second compact to the country was finalized in December 2014. “This is a partnership between the people of the United States and the people of the Philippines. This is not determined by one administration or another. We do this process from a very apolitical standpoint,” Khan said.
Compacts are large, five-year grants for countries that pass MCC’s eligibility criteria. Khan said the MCC decided to grant the Philippines a second compact on the basis of its performance in the first compact, which is already around 80 percent to 90 percent on track to completion in 18 months.
He also said the Philippines did well in terms of the 20 indicators that MCC monitors. The country managed to improve in 13 out of the 20 indicators in just a few years.
One indicator that was remarkable for MCC is the country’s performance in the control of corruption. Data from organizations, like Transparency International, showed that the country has improved 37 notches in its ranking since 2012.
“We are confident that, based on those indicators, based on what we see through our eyes and the eyes of our embassy and through our
partnership, this is not a country that is going to go offline just because it’s going through a transition,” Khan said.
“This democracy has evolved. I guess, what we are trying to say is that we have faith and we see the
best as a possibility and we don’t fear the worst,” he added.
The MCC estimates that it will require around 12 to 24 months to complete the process of studying and selecting the projects for the second compact. Khan said projects to be funded through the MCC grant will have to be determined after a thorough joint study is done by representatives of both governments.
These projects will be selected according to the needs of the country and which projects can bring the most economic benefit to
the Philippines. Each project, Khan said, must pass a minimum requirement of 10-percent economic rate of return, which is the approved hurdle rate for MCC-funded projects.
Khan also said the projects must also be doable in five years, which is the maximum time frame of
completing MCC-funded projects.
On the average, Khan said the MCC grants $350 million for projects funded by various compacts worldwide. The Philippines, however, got a bigger amount for its first compact at $388 million.
The grants were used for three projects: the Kapit-bisig Laban sa Kahirapan-Comprehensive and
Integrated Delivery of Social Services, which received $120 million; the Secondary National Roads Program, specifically a 222-kilometer road in Samar, $214 million; and the Revenue Administration Reform Project at the Bureau of Internal Revenue, $54.3 million. The MCC was created by the US Congress in 2004 to deliver American foreign assistance by focusing on good policies, country ownership and results.
Compacts are multiyear agreements between the MCC and a country to fund specific programs targeted at reducing poverty and stimulating economic growth.
MCC has approved almost $9.8 billion in various programs worldwide. These grants support projects in multiple sectors, including agriculture and irrigation; transportation infrastructure; water supply and sanitation; and access to health-care services.