US unlocks $434M for Aquino gov't

By Rodney Jaleco, ABS-CBN North America News Bureau

Posted at Aug 07 2010 09:52 AM | Updated as of Aug 07 2010 07:15 PM

WASHINTON DC - The United States has given the young Aquino administration what the previous administration of President Gloria Macapagal Arroyo had coveted for nearly 2 years and never got – a signal of trust and confidence – when it agreed on Friday to unlock $434 million in poverty- and corruption-fighting grants for the Philippines.

“Congratulations to the people and Government of the Philippines for tackling difficult challenges to create tangible opportunities for growth and prosperity,” declared Millennium Challenge Corporation (MCC) CEO Daniel Yohannes.

Ambassador Willy Gaa, who has nursed the Philippines' quest for an MCC Compact, said it “reaffirms the Philippine’s high capacity as MCC partner.”

Earlier this year, the MCC Board headed by State Secretary Hillary Clinton, decided to defer approval of the Compact agreement until after the national elections held last May.

Yohannes said at the time they wanted to get a commitment from the new Philippine government that it would abide with MCC policy objectives. He was apparently referring to the government’s worsening corruption problem, as shown in performance parameters the aid-giving body conducts every year for participating nations.

The Philippines became eligible for a Compact agreement as early as 2009, but the Arroyo administration continually flunked the corruption test, including the last one released for Fiscal 2010 (the US fiscal year starts in October).

On a median of zero, the Philippines scored a -0.20 or about 26% in the Control of Corruption parameter.

Former President Arroyo, according to Washington DC insiders, also sought the MCC Compact for political reasons, because it would provide a “seal of approval” for her administration. But as she became embroiled in one scandal after another, some involving her family, the MCC appeared to tighten the requirements for her to get the Compact agreement.

This time around, the MCC apparently didn’t want to wait for its regularly scheduled 4th quarter board meeting to act on the Philippines’ request – something sources here say sends a clear signal to the 2-month-old administration of President Benigno “Noynoy” Aquino III.

President Aquino has worked to deliver on his campaign promise of “kung walang corrupt, walang mahirap” (if no one is corrupt, no one is poor).

Diplomatic sources say that that message resonates well in the US government, which apparently wants to encourage the young Aquino administration to sustain and intensify its efforts at curbing graft, ending impunity and ensuring resources reach the poor and needy.

"The Filipino have articulated a clear vision to improve the quality of their lives through a technically, environmentally and socially sound plan," Yohannes declared.

The MCC Compact grants will invest $54 million in computerizing and improving the tax collection activities of the Bureau of Internal Revenue; some $120 million will go to livelihood- and quality of life enhancing projects in the country’s poorest barangays; and $214 million will be spent for the construction and repair of 220 kilometers of roads that cut across the most marginalized communities of Samar Island and link it with the rest of the archipelago.

The US congress has already allocated the funds requested by the State Department to fund the Compact agreement with the Philippines.

The Compact agreement can be signed after a 15-day congressional notification period. Congress is on summer recess.

"I am confident that the country's ongoing commitment to positive reforms, accountability and transparency, and the timely implementation of the compact will deliver tangible results," Yohannes averred.

The agreement could be signed by President Aquino, who’s widely expected to visit the United States next month.