The government is working to convince the Millennium Challenge Corp. (MCC) to approve the country’s compact assistance proposal by yearend.

Finance Secretary Margarito Teves, currently attending the 42nd Annual Meeting of the Asian Development Bank Board of Governors in Indonesia, said this was the main point of discussion during his meeting with MCC officials at the sidelines of the World Bank-International Monetary Fund Spring Meetings in Washington last month.

"[We] urged MCC for an early approval of our compact assistance proposal. We agreed to explore options and work harder with MCC to facilitate the approval by MCC board by the end of this year and achievethe signing of a grant agreement for Philippine compact assistance early next year," he said in a mobile "text" message yesterday.

Last December, MCC Chief Executive Officer John Danilovich said the MCC’s board of directors had deferred the approval of the Philippines’ compact proposal until it meets the MCC’s criteria on corruption.

Based on the MCC October 2008 scorecard, which ranges from 0 percent (worst) to 100 percent (best), the Philippines got a score of 47 percent, which is below the median of 50 percent, in terms of control of corruption.

Mr. Teves admitted that the Philippines will still have to address the problem of corruption, but insisted that the government is already implementing programs to solve it.

"We need to hurdle the control of corruption indicator. Agencies concerned are working hard on it," he said in his "text" message.

But Vincent Lazatin, executive director of civil society group Transparency and Accountability Network, believes that the government will have a difficult time surmounting this hurdle.

"I am not very hopeful [that the Philippines will obtain the grant.] I don’t think the Philippines is qualified. I don’t see anything that would indicate that the government is making a headway against corruption. There are many corruption controversies that remain unsolved," he said in a phone interview yesterday.

Mr. Lazatin said the government should intensify its drive against corruption by undertaking more vigorous investigations against erring officials and persecuting "big fishes" influential with this government who are involved in questionable transactions.

The MCC is a US government firm established to work with developing countries to push good governance as a way of promoting sustainable growth. Last year, it initially tagged the Philippines as eligible to apply for compact assistance due to its supposed accomplishments in addressing corruption.

A compact is a multi-year agreement between the MCC and a qualified country to fund specific programs aimed at reducing poverty and stimulating economic growth.

The MCC Board reviews the applicant’s eligibility for this large-scale grant funding, based on indicators that measure good governance, investment in people, and policies that promote economic freedom.

Specific indicators are civil liberties, political rights, voice and accountability, government effectiveness, rule of law, control of corruption, immunization rates, public expenditure on health, girls’ primary education completion rate, public expenditure on primary education, business start-up, inflation, trade policy, regulatory quality, fiscal policy, natural resource management and land rights and access.

The Finance chief also admitted that the funding faces other "constraints."

"We also noted MCC’s constraints, including possible lower-than-requested MCC budget and [matters regarding the] processing timetable," Mr. Teves said

He said this was due to "budgetary constraints" being faced by the US government.

In a separate interview yesterday, Finance Undersecretary Gil S. Beltran explained only that the amount of grant to be given, as well as the time of its disbursement, would depend on factors like the availability of funds and the viability of proposed projects.

"All funds given by the MCC came from the US government. It depends on the budget they will release. The grant to be given may be higher or lower, depending on the projects in the proposal. If they [MCC] like the projects, the funding may be higher," Mr. Beltran said.

Mr. Beltran expressed confidence that the government would secure the assistance.

"The projects we proposed are targeted at the poor like the secondary national roads project and rural infrastructure," he said.

Mr. Teves has said that the government has proposed to the MCC five development projects which are estimated to cost at least $700 million.

The five projects are: the Pantawid Pamilyang Pilipino Program or the conditional cash transfer, the Kapit-bisig Laban sa Kahirapan-Comprehensive and Integrated Delivery of Social Services, the Sustainable Upland Watershed Management and Productivity Enhancement project, the fiscal governance enhancement project, and the secondary national roads program.