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Obama seeks funds for MCC program for RP

By Lito Katigbak

WASHINGTON – The Obama administration has asked the US Congress for $1.425 billion to fund the Millennium Challenge Corporation’s budget for fiscal year 2010 that will enable the MCC to sign a compact with the Philippines worth $584 million.

The request, which is 63 percent over last year’s budget, shows that a priority US foreign policy goal is the reduction of global poverty, said MCC Acting Chief Executive Officer Rodney Bent.

As the global financial crisis threatens to force an additional 90 million people worldwide into poverty this year, there is no better time to support MCC’s innovative approach to reduce poverty and promote long-term economic growth, he said.The proposed MCC budget “provides funding for a strong pipeline of countries, including Jordan, Malawi and the Philippines, that are working with their civil societies to develop homegrown compact proposals that will overcome barriers to economic growth,” Bent said in his blog.

Ambassador to Washington Willy Gaa said he was “happy and delighted” the Philippines was being considered for a compact.

Since its inception in 2004 MCC has approved compact programs in 18 countries worth $6.4 billion. These are expected to benefit more than 22 million people as improved national and regional infrastructure, agricultural systems and practices and other community services spur investment and raise local incomes, Bent said.

[ad#obama180x150]The MCC board is due to meet in the fall of this year to select additional countries eligible for large-scale grants. Signing ceremonies are expected by the summer of 2010 and if all goes well implementation of projects should start before the end of the year or in early 2011.
In a Congressional Budget Justification report MCC detailed how it will allocate the $1.42 billion budget to fight global poverty.

It said the funding level would among other things enable it to sign compacts with Jordan, Malawi and the Philippines.

All three have submitted investment proposals covering a wide range of activities designed to stimulate growth, address direct and indirect costs of doing business and reduce poverty and MCC is in the midst of assessment and detailed preparations, the report said.

Under evaluation in the Philippines for MCC funding for a five-year period from the time the compact is signed are projects to improve tax and customs collection and reduce corruption, improve access to markets through rural road rehabilitation and empower local communities to develop and implement infrastructure projects that support economic development.

MCC said the three proposed projects are:
- A comprehensive and integrated delivery of social services through small-scale, community driven investment projects at village and municipal level estimated to cost $250 million.
- A National Road Development Project to rehabilitate and improve secondary national roads in rural areas in selected provinces of Luzon and Visayas costing $187 million.
- An Integrated Revenue Information System (IRIS) to improve collection and fairness of tax and customs regimes through targeted investments in capacity, processes, and technology costing $147 million.

The Philippines had hoped to be eligible for large-scale grant funding under the US government’s innovative foreign assistance program last year but this was delayed because of failure to pass a control of corruption test, one of 17 benchmarks that the MCC assesses to determine if a country meets the criteria for receiving aid.

To be eligible for US assistance, developing countries must show their commitment to policies that promote political and economic freedom, investments in education and health, control of corruption, and respect for civil liberties and the rule of law by performing well on 17 different policy indicators.
Of the 17 indicators that MCC uses to determine with which countries to work, meeting the “control of corruption” criteria is weighed most heavily.

“Our record is good and we’re hopeful we’ll pass the corruption test,” Gaa said.

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