THE “father of good governance,” Dr. Jesus Estanislao, predicted last week the USA’s Millennium Challenge Corp. (MCC) would most likely finalize the MCC’s grant of about $500 million to finance Philippine anti-poverty and anti-corruption programs. But all of a sudden, the
MCC deflated everybody’s hopes by announcing that its board had decided to wait till a new Filipino president is elected.
The MCC, a US government entity,
deferred its final decision on granting the Philippines over half a billion dollars to assist in the country’s development until after the elections in May—and after it receives the new president’s commitment to pursue the reforms and activities described in the Philippine proposals for “compact grants.”
In a press release dated March 24 (March 25 here in the Philippines), the MCC, which is chaired by
Secretary of State Hillary Clinton, decided to postpone the $584 million “compact” grant to be distributed over the course of five years.
The MCC decision was made by its board of directors during its regular quarterly meeting.
The reason for the deferral to a still undetermined date is that the MCC wanted to first observe if the next administration would share the corporation’s ideals and dedication to the compact grant’s objectives of alleviating poverty and spurring economic growth.
“At our meeting, the MCC Board praised the Government of the Philippines for their hard work in developing this innovative compact proposal and acknowledged the government’s commitment in working with MCC . . . We will look to the incoming Philippines’ government to demonstrate its commitment to MCC principles and the compact before final consideration,” said MCC Chief Executive Officer Daniel Yohannes.
The Philippine government submitted to the MCC last year a compact proposal featuring a list of projects to be funded by the grant.
The MCC narrowed the list down to three projects.
One of these projects is a community-based rural improvement program called Kalahi-CIDSS expected to benefit five million people for over two decades, which would equate to around $250 million in costs. This project would be implemented by the Department of Social Welfare and Services.
Second is the construction and maintenance of the 220-kilometer Samar Road to efficiently improve access to markets and the travel time of farmers, fishermen and small businesses in the least developed parts of the country. This project is to be overseen by the Department of Public Works and Highways (DPWH). The MCC would allocate $187 million in for this project.
The third project to be funded by the MCC is the renovation and computerization of the Bureau of Internal Revenue’s (BIR) Integrated Revenue Information System, which was also the beneficiary of a previous grant from the MCC. That was relatively small “threshold” grant, to enable the BIR to begin undertaking its reforms.
Scoring system
In order to receive a compact grant, a country must perform well in a scoring system devised by the MCC based on 17 indicators divided into three categories: Ruling Justly, Investing in People and Economic Freedom.
Countries are grouped together according to their per capita income. Between these grouped countries, a median is taken for all indicators, which serves as the standard.
The Philippines scored below the median in seven indicators, specifically, in Control of Corruption (26-percent percentile ranking), Rule of law, Immunization Rates, Health Expenditures (6-percent percentile ranking), Primary Education Expenditures (27-percent percentile ranking), Girls’ Primary Education Completion and Business Start-up (34-percent percentile ranking).
Note also that in 2008, the Philippines only scored below median in three indicators.
In 2009, however, the Philippines was promoted by the MCC from the low-income category to the lower-middle income country grouping, effectively raising the median standards across all indicators.
But despite unsatisfactory scores,
the Philippines is still most likely to receive the compact grant thanks to efforts in improving governance at the national level.
These improvements, helped by good-governance efforts launched under the Institute for Solidarity in Asia’s Performance Governance System, became palpable in six key government agencies that enrolled with isa on September 24, 2009.
The primary effort reflecting such good governance initiatives is the participation of six National Government Agencies (NGAs) in the Institute for Solidarity in Asia’s (ISA) Performance Governance System (PGS).
ISA core values
The DPWH, Bureau of Internal Revenue, the Department of Health, the Department of Education, the Department of Transportation and Communications and the Philippine National Police entered the “initiated” level of the PGS.
To be given the rank of “initiated” means the institution has agreed to accept the ISA core values—among which are patriotism, transparency, honesty, competence and hostility to corruption. Not only that, it must also have defined its own goals and set a timetable for achieving them. And it is not just the leadership of the institution that sets the road map and plan to achieve the goals.
These goals, plans and road map must be co-authored and therefore accepted and committed to by all stakeholders and by relevant civil society groups and other representatives of the public.
The PGS utilizes the Balanced Scorecard System first developed by the Harvard Business School. The ISA applied this Balanced Scorecard System for Local governments, and also, adapted it for the use of these six NGAs.
All the departments and their subordinate offices were given scorecards with different measurable targets and achieved indicators, yet with similar objectives for every department.
In a Public Governance Forum, convened jointly by the ISA, the National Competitiveness Council and the Development Academy of the Philippines (DAP), Antonio Kalaw, President of the DAP, said that he received an order from the Office of the President to instigate the six NGA’s implementation of the ISA’s PGS.
Furthermore, Dr. Estanislao, founding chairman of the ISA, said that this involvement of the six NGAs gave the MCC strong reasons to give the grant.
“[The] MCC is acknowledging the effects [on good governance that] we are doing at the national level,” Estanislao said.
Political suicide
In all likelihood,
the next president’s administration would still be given the compact grant. It would be political suicide for the incoming president to fail in obtaining the grant that would fund these significant projects urgently needed for reducing poverty and economic progress.
Growth in governance, and consequently, in the economy would also be further delayed should the incoming government discontinue projects such as that of the ISA’s PGS.
The Philippines was already the beneficiary of a $21-million “threshold” anti-corruption grant from the MCC directed to the BIR and the Office of the Ombudsman. This grant ended successfully in May 2009.
News of the MCC’s deferment of the grant caused so much disappointment.
A Philippine News Agency report said Finance Secretary Margarito Teves on Thursday expressed disappointment with the decision of the Millennium Challenge Corp. board to defer approval of the country’s proposed $433.4-million compact grant for three projects covering the period of 2010 to 2014.
“
They wanted firm commitment from the next administration on the proposed program,” Teves said in a prepared statement released by the Office of Deputy Presidential Spokesman Gary Olivar.
In a press briefing earlier, Presidential Spokesman Secretary Ricardo Saludo expressed hope the MCC board, which met Wednesday in Washington D.C., would approve the Philippine proposal.
“The statement of former Finance Secretary and governance advocate Jesus Estanislao has been encouraging. We are also advised by a Filipino-American official of the Obama administration that there may be a positive action on our request for assistance,” Saludo had said.
Reports quoting Estanislao on Wednesday said, the MCC’s five-year grant will be signed in the United States as early as between April 10 and 12.
The Department of Finance (DOF) will manage the grant when it is given by the MCC.
To date, six government agencies have gone through ISA’s performance governance system a globally recognized anti-corruption program.
These agencies are the Department of Education, Department of Health, Department of Transportation and Communications, Department of Public Works and Highways, the Bureau of Internal Revenue and the Philippine National Police.
Eight more agencies will start using the PGS scorecard to help improve their governance ratings.
“As the MCC board recognized in its press release, we worked hard to ensure compact eligibility and the timely submission of a high-quality proposal. We believe that the approval of our compact proposal will facilitate the implementation of projects to support higher growth and accelerate poverty reduction,” said Teves.
In February, the MCC extended a $3.55-million grant to the Philippines to streamline the procurement/bidding process and to prepare a financial accounting system for the proposed compact program.
In early 2009, the Philippines submitted a number of proposals for MCC compact funding, including transport infrastructure to improve access to markets and services for farmers, fisherfolk and small enterprises; the expansion of a community-based rural development program focusing on poor areas; a redesign and computerization of key business processes in the BIR that will reduce tax evasion and curb corruption while raising tax revenues.
Originally Posted by Golden Thief Bug
i did stop. at a point, i even gave him a chance. he won, i supported him. well i still support him till now well hes the president. but what happened during the hostage crisis turned all that upside down. you know what i mean. e pray nalang ko.. i jsut hope sayop ko ug sakto mo
as if si Obama got control of MCC.. MCC is an independent US foreign aid agency and ang chair si Hilary Clinton. si Obama ba naghatag sa grant? lol
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