Philippines re-engaged with US foreign aid agency

MANILA, Philippines — The independent foreign aid agency of the US government has re-engaged the Philippines through the development of threshold programs aimed at boosting economic growth.

In a statement, economic team head and Finance Secretary Benjamin Diokno welcomed the decision of the Millennium Challenge Corp. (MCC) to re-engage the Philippines via programs that will support policy and institutional reforms.

Created by the US Congress, the MCC partners with the world’s poorest countries that are committed to just and democratic governance, economic freedom and investing in their populations.

The MCC provides time-limited grants promoting economic growth, reducing poverty, and strengthening institutions.

Last week, the MCC board of directors selected the Philippines to develop threshold programs in recognition of its renewed commitment to advancing reforms in good governance, human rights and anti-corruption.

“We welcome the eligibility of the Philippines under the MCC Threshold Program, which we hope will allow us to further access the bigger Compact Program,” Diokno said.

“We stand ready to work hand in hand with the US government toward developing and implementing important programs that will unlock growth in the Philippines and redound to economic and social transformation for all Filipinos,” he said.

The MCC provides three different kinds of grant financing: compact, threshold, and regional compact.

Specifically, a compact program is a multi-year agreement between the MCC and an eligible country to fund specific programs targeted at reducing poverty and stimulating economic growth.

A threshold program, on the other hand, is a contract between the MCC and a country that provides financial assistance to assist in meeting requirements to access large scale grants resources by becoming “compact eligible” through support for policy and institutional reforms by addressing a country’s constraints to economic growth.

Introduced in 2018, the MCC regional compact program intends to promote cross-border economic integration, trade and collaboration and for regional integration.

Previously, the Philippines enjoyed US government support under the MCC’s first compact grant of $434 million which concluded in 2016 and a prior threshold grant of $20.7 million that was implemented between 2006 to 2009.

The threshold program enhanced anti-corruption efforts by strengthening the Office of the Ombudsman, improving revenue administration and increasing enforcement capacity within the Department of Finance.