MANILA, Philippines – The Millennium Challenge Corporation (MCC), a US agency that ties grants to good governance, says it might stop giving money to the Philippines by 2016.
The reason: the Philippines could be a middle-income country by then and won't need its help.
“If you look in terms of what’s been accomplished in this country, if it continues to grow at the current rate, there may not be a need for a second compact particularly if it graduates to a middle-income country,” said Daniel Yohannes, CEO of MCC.
It's actually good news more than bad.
The MCC's latest assessment speaks of the Obama administration's confidence in how President Benigno Aquino III is running the economy.
Yohannes delivered that message to Malacañang Friday morning.
While Aquino predecessor Gloria Macapagal Arroyo sought MCC funds, the agency only awarded the Philippines almost half a billion dollars in grants in 2010 after Aquino took over.
“Corruption exists. It exists here and it exists in rich countries. The key thing we have to look for is the trend. I talked to more people in my short visit here. I think people are at a point where they now more comfortable about the administration’s commitment to eradicate corruption,” Yohannes said.
“I have expressed what I have seen since I've been here. And I thanked the President for his support and leadership. Together we're fighting poverty and hopefully one day to create an environment in this wonderful country where aid is no longer needed.”
The $434-million MCC fund is being used to build a 220-kilometer road in eastern Visayas for rural development, and the computerization of the Bureau of Internal Revenue's collection system to help it cut red tape.
The 5-year contract expires when President Aquino ends his term.
One of his economic managers says it's okay if they don't get more money from the US agency.
“That would be ideal. We hope to get a second compact but if we don't qualify because of the improved growth rates, then that's an excellent position to be in, right?” said Finance Secretary Cesar Purisima.