June 16, 2006
Millennium Challenge Corporation Board Approves Anti-Corruption Initiative in Philippines
Washington, D.C. The Board of Directors of the Millennium Challenge Corporation (MCC) today approved financing for an anti-corruption initiative in the Philippines. The country is presently ineligible for broader MCC Compact assistance because of persistent problems with public corruption, one of 16 factors used to select countries to participate in the Compact program. Compact eligibility is reserved for countries that score above the median on independently measured indices such as political and economic freedom, investment in education, control of corruption, respect for civil liberties, health care spending, fiscal and trade policies and judicial fairness.
The Philippines is undertaking bold reform programs to tackle corruption and attract more international investment, including possible future MCC Compact assistance that is designed to reduce poverty through economic growth, said Ambassador John Danilovich, Chief Executive Officer, MCC.
In the Philippines, low performance on the corruption index is largely attributable to high levels of corruption in tax and customs administration, conflicts of interest in the public sector and weak enforcement of existing anti-corruption laws.
The Philippines’ nearly $21 million, two-year program seeks to improve revenue administration and anti-corruption efforts and is consistent with the Medium-Term Philippine Development Plan, 2004-2010, which was developed under the guidance of President Gloria Macapagal-Arroyo and released in October 2004. With MCC’s support for its anti-corruption initiatives, the Philippines is expected to further accelerate and institutionalize efforts to stamp out corruption, improve tax collection, and channel more resources to poverty reduction programs such as in healthcare, education and social services. The program will be administered by the United States Agency for International Development.
The initiative is part of MCC’s Threshold Program which assists countries that are on the threshold of eligibility for Millennium Challenge Account Compacts. Threshold Program assistance is used to help countries address the specific policy weaknesses indicated by the country’s scores on the 16 policy indicators.
Millennium Challenge Corporation (MCC), a U.S. government corporation designed to work with some of the poorest countries in the world, is 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.