Gov’t passes MCC aid eligibility

The Duterte administration passed the eligibility requirements to secure fresh grant from the US government’s Millennium Challenge Corp. (MCC) despite human rights concerns, Washington announced yesterday.

In a report posted on its website late Wednesday, the Washington-based foreign aid agency said that the Philippines is among the 75 low- and low-middle countries eligible for a millennium challenge compact from the US government.

As one of the eligible nations for fiscal year 2018, the MCC noted the Philippines has “demonstrated commitment to (i) just and democratic governance, (ii) economic freedom, and (iii) investments in its people.”

The Philippines also presented “the opportunity to reduce poverty and generate economic growth in the country, and the availability of funds to MCC.”

Last June, Finance Secretary Carlos G. Dominguez III said the MCC offered a fresh funding for the Philippine government’s development projects, but it is not yet known if the fresh grant prescribes any preconditions.

The MCC, which preconditions aid on the attainment of health, rule of law and corruption indicators, deferred in December last year its decision on a second tranche of funding for the Philippines after a $434-million package in 2011.

“I've talked to the Millennium Challenge people maybe three times already, and they said they want to have a second compact,” Dominguez said in an interview in June. “But so far, nothing… They haven't decided.”

Dominguez said the government would consider the offer from the US government as long as the aid coming from the US is in line with the Duterte administration’s priorities.

“We will consider their offer — is it in our priorities? Are the terms reasonable? Are our sovereignty not affected? But so far, nothing. We've engaged with them several times… they know our priorities, let's see what they will say,” the finance chief said.

MCC's December unfavorable decision was owing to "significant concerns" about the rule of law under President Rodrigo R. Duterte.

The second compact worth up to $430 million would have run for five years or throughout the term of President Duterte. The US government set up the MCC to promote economic growth and reduce poverty around the world. However, countries can only qualify if they "demonstrate a commitment to just and democratic governance, investments in its people, and economic freedom.”

During US President Barack Obama’s final months in office, Washington had been a vocal critic of President Duterte's war on drugs that severely strained ties between the longtime allied nations.

But the fraught relations between Manila and Washington made a sharp change when US President Donald Trump took office in January. With Trump at the helm, the US leader wants "a warm, working relationship" with President Duterte.

Dominguez said the proposed second compact from MCC is now “undergoing an American process” where the Philippine government is not involved.

“We're going to do what we can, while we can, while they do their own process. They haven't decided, I believe the new [US] administration has not really decided what to do with the Millennium Challenge,” Dominguez said.

“We have nothing to do with the MC except if they come to us and make us an offer. So, I'll just wait,” he added.

In May, the Duterte government rejected a grant from the European Union that allegedly meddled with the Philippines’ internal affairs and set out several preconditions that did not conform with the administration’s priorities.