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PHL fails in ‘control of corruption,’ but passes more than half of MCC indicators

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THE PHILIPPINES failed in nearly half of indicators tracked by a US foreign assistance agency, with the country’s failure particularly in “control of corruption” putting at risk its chances of becoming eligible for grants under this program next year.

The Millennium Challenge Corp. (MCC) scorecard for the Philippines for next year showed that the country passed 12 of 20 indicators used to determine eligibility for grants under its program.

The MCC released the 2020 country scorecards on Nov. 1. “MCC scorecards are a key component in the agency’s annual competitive selection process that determines which countries are eligible to develop compacts — grant investments that last five years,” the agency said in a statement on its Web site.

Formed in 2004, the MCC provides grants aimed at promoting economic growth, reducing poverty and strengthening institutions.

Sought for comment, Socioeconomic Planning Secretary Ernesto M. Pernia said in a mobile phone message: “It means the Philippines can’t avail itself of MCC funding. But it’s not critically important as we have several other funding sources.”

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At the same time, the MCC explained that “The scorecard indicators can also be used by businesses, investors, and the private sector to inform investment decisions and better understand the operating environment in a specific country.”

The government has been wooing more American investments despite President Rodrigo R. Duterte’s occasional anti-US remarks, with Finance Secretary Carlos G. Dominguez III noting in a Philippine Economic Briefing Roundtable Lunch on Oct. 17 in Washington D.C. that while “the US business community expressed interest in participating in this [‘Build Build Build’ infrastructure] program on several occasions… no serious offer has come.”

The Philippines is counted among the 60 “low-income” countries which MCC classifies as candidates for eligibility for funding next year, together with the likes of India, Indonesia, Laos, Vietnam and Ukraine, among others.

In order to determine whether a country could be eligible, the MCC Board considers whether a country passed at least 10 of the 20 indicators, with at least one pass in each of the three main categories of “economic freedom,” “ruling justly” and “investing in people.”

A country must also pass either the “political rights” or “civil liberties” indicator, as well as the “control of corruption” indicator. “Not passing either ‘hard hurdle’ results in not passing the scorecard overall, regardless of whether at least 10 of the 20 other indicators are passed,” MCC said.

The Philippines passed six out of eight “economic freedom” indicators, namely: fiscal policy, inflation, regulatory quality, trade policy, gender in the economy, as well as land rights and access, but failed in terms of access to credit and business start-up.

Under “ruling justly,” the Philippines met the grade in terms of political rights, civil liberties and government effectiveness, but failed in control of corruption, rule of law and freedom of information.

Finally, in terms of “investing in people”, the country passed in natural resource protection, girls secondary education enrollment rate and child health, but failed in health expenditures, primary education expenditures and immunization rates.

The Philippines had been eligible for $433.91 million in MCC grants in a previous five-year compact signed in September 2010.

The country used $385.072 million of those funds from May 25, 2011 to May 25, 2016 to modernize tax collection by the Bureau of Internal Revenue, expand community-driven development projects and improve governance at the village and municipal levels, as well as rehabilitate a major secondary national road in Samar. — Beatrice M. Laforga

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