MCC report: Ombudsman wasting US firm's anti-graft aid

By ARIES RUFO,, Newsbreak

Posted at Jan 07 2009 03:11 PM | Updated as of Jan 08 2009 03:05 AM

Millions of dollars in funding support appear to have been wasted as corruption in the Philippines progressively worsened in the past two years, a Millennium Challenge Corp. (MCC) evaluation report showed.

The worsening status of corruption, which was noted in 2007 and 2008 by the MCC, “raises questions about the efficacy” of MCC-funded anti-corruption programs of the Ombudsman amounting to millions of dollars, the report said. The MCC is a US government-owned corporation managing the Millennium Challenge Account aimed at helping governments lick corruption.

Ironically, the increase in the level of corruption was noted just as funding support poured. In late 2006, the Philippines received a $6 million grant from the MCC because of its high percentile ranking in control of corruption indicator. The country is eligible for a total amount of $21 million from the MCC.

Before the MCC account, the Ombudsman also got a huge grant from the EU for anti-corruption programs.

But from 76th percentile in 2006, the country’s ranking dipped to 57th percentile in 2007 and 47th percentile in 2008.

In March 2008, the MCC, during an assessment, noted the slide in 2007 and it “raised concern over the fragility of the Philippines’ control of corruption score.” Just the same, the MCC declared the Philippines eligible for another round of large-scale funding from the MCC.

Such decision created an “awkward situation” for the MCC Board, the report said, as later developments showed.

With the further decline in the Philippines’ score in 2008, the evaluation report said the MCC’s initial concerns “now appear to have been justified.” It further noted that the release of grant “coincided with the weakening of the corruption score.”

It was thus of no surprise when the country flunked the MCC’s fiscal year 2009 report, which denied the Philippines a new round of funding.
Aside from failing grades in control of corruption (47 percent), the country also failed in health expenditures (19 percent) and primary education (32 percent).

To be eligible for the funding assistance, developing countries must demonstrate a commitment to policies that promote political and economic freedom, investments in education and health, control of corruption, and respect for civil liberties and the rule of law.

The MCC account is not the only foreign-funded program implemented by the Ombudsman which got a failing grade.  During the time of Ombudsman Simeon Marcelo, the Office of the Ombudsman got a 2.9 million euro grant from the European Union to finance the Improving Governance to Reduce Poverty program.

But our sources in the Ombudsman said that since Merceditas Gutierrez came into office in Nov. 2005, the funding support has been “drastically decreased due to incompetence.” But Alistair Macdonald, head of the delegation of the European Commission to the Philippines, in an earlier interview said the EU is still set to review the programs it had funded including the anti-corruption projects in collaboration with the Ombudsman.
The slash in foreign support came as various surveys confirmed the worsening corruption. The Political and Economic Risk Consultancy survey has tagged the Philippines as number 1 in corruption in Asia while Transparency International’s 2008 perception index placed the Philippines in the bottom quarter of 180 countries surveyed.