Friday, December 11, 2009

Graft-ridden GMA gov’t flunks MCC test, no US grants for RP

By Michaela P. del Callar

Original Story:

The Philippines under the Arroyo government has again failed to secure a large scale grant from a United States aid agency due to the long-standing problem of corruption in her government.

At a board meeting held in Washington Wednesday (Thursday in Manila) by the Millennium Challenge Corp. (MCC), however, the Philippines was re-selected to apply anew for additional funding for its development projects.

The results of its recent corruption test, which the Philippines flunked, had a great impact on the decision of MCC Board of Directors at its quarterly meeting when its directors selected and reviewed eligible developing countries for compact funding. Manila would have received additional $500-million poverty-reduction funding from the MCC only if it had passed the MCC’s anti-corruption index.

Control of corruption is considered by the MCC as the only pass/fail indicator. No country can receive funding under the Compact program unless it passes at least half of the 17 indicators and the Control of Corruption indicator.

This is the third time, according to the Department of Foreign Affairs, that the Philippines was endorsed as Compact eligible, allowing the country to qualify for a large scale-grant for fiscal year 2010 under the Millennium Challenge Corp.’s Millennium Challenge Account (MCA) program. The MCC Board of Directors is headed by US Department of State Secretary Hillary Clinton.

“The re-selection reaffirms both MCC’s confidence in the Philippines’ high capacity as development partner and the Philippine government’s highest level of political commitment to good governance,” Foreign Affairs Secretary Alberto Romulo said, in trying to put a spin on the failure.

Romulo is optimistic that Manila would finally qualify next year following its re-selection to apply for compact funding by the MCC.

The Philippines , which qualified in 2007 under the MCC’s threshold program initially received $21 million for the government’s anti-corruption projects.

The MCC is a US government corporation designed to work with developing countries on Millennium Challenge Account (MCA)-funded programs for economic growth.

Two MCA programs available are the primary Compact Program and the secondary Threshold Program, which helps countries that are close to qualifying for Compact Program assistance address specific policy weaknesses.

Both programs are based on the principle that aid is most effective when it reinforces good governance, economic freedom, and investments in people that promote economic growth and elimination of extreme poverty.

MCC said that in making its decision to reselect the Philippines and Indonesia, “the Board took into consideration each country’s current indicator performance as an LMIC, as well as the information that the Philippines and Indonesia would have met the criteria as a low income country.”

According to the DFA, the Philippine’s plan of action under MCC’s Policy Improvement Process (PIP) to strategically address policy performance issues such as Control of Corruption (CoC) is also being reviewed by the MCC.

The PIP will monitor progress in preventive measures against corruption such as improving transparency in budget delivery, institutionalization of a balanced scorecard system on improved frontline public services in specific national agencies and development of selected local government units (LGUs) as “sparkplugs” for economic development.

Meanwhile, Malacañang shrugged off the recent report released by the New York-based think tank over the alarming issues that are currently plaguing the country, directed at President Arroyo’s bid for the Congress next year and her declaration of state of Martial Law in Maguindanao, that it said could create an adverse effect in the country’s business and economic environment.

GlobalSource Partners analyzed that if Arroyo stays in power as reflected by her decision not to completely break away from government upon her exit as president, the country’s credit woes might get worse.

But Presidential Spokesperson for Economic Affairs, Gary Olivar claimed that the warning is directed at public officials who have failed to do their share of economic responsibility because of spending too much on playing politics.

“What it (GlobalSource Partners report) says is that what’s bad for business is if what should be the normal process of checks and balances of Congress and the Executive (Branch), especially in a situation controlled by opposing parties, if a normal and healthy process like that in a democratic (country) degenerates into politicking, where the participants do not then focus on their key job which is to execute and legislate. So it’s very clear it is not the President’s run for Congress itself that is viewed as potentially bad for business. It is a situation where the politicking continues as usual,” Olivar explained.

Olivar, moreover, said it is still “premature” for a New York-based think tank to assume what will happen to country in the near future let alone the implied warnings it has for Arroyo if and when she obtains a seat in the Congress next year.

“We would therefore recommend to the opposition to read closely the story from GlobalSource and pay attention to the warnings. It seems the warning is directed at those who originate politicking, those who create sideshows, those who distract the public instead of focusing on what their main job should be. These people (are the ones who) should read the story, not the President,” he added.

On the concerns over Martial Law in Maguindanao, Olivar pointed out that he is uncertain as to what relevance this issue has on the market situation insofar as the economic and business environment in the country is concerned.

Olivar further mentioned that the projected budget deficit hitting at 312 billion to 320 billion would still be manageable to the country considering Gross Domestic Product (GDP) ratio. With Aytch S. dela Cruz

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