PHL gets failing mark for inability to curb corruption in MCC scorecard

The Philippines received a failing mark in the “control of corruption” indicator in a scorecard by the Millennium Challenge Corp. — PHILIPPINE STAR/MICHAEL VARCAS

A UNITED STATES government foreign aid agency has given the Philippines a failing mark in “control of corruption” on its latest scorecard released on Tuesday.

The latest Millennium Challenge Corp. (MCC) scorecard for the Philippines showed it passed 12 out of 20 indicators used to determine a country’s eligibility for grants under its program, and the “democratic rights” indicator.

However, the Philippines received a failing mark for the “control of corruption” indicator, which means it will be unable to secure any grants next year.

The MCC requires countries to pass at least 10 of the 20 indicators, “control of corruption” indicator and either the “civil liberties” or “political rights” indicator.

“The mandatory passing of either the Political Rights or Civil Liberties indicators is called the Democratic Rights ‘hard hurdle’ on the scorecard, while the mandatory passing of the Control of Corruption indicator is called the Control of Corruption ‘hard hurdle.’ Not passing either ‘hard hurdle’ results in not passing the scorecard overall, regardless of whether at least 10 of the 20 other indicators are passed,” the MCC said on its website.

“While satisfaction of all three aspects means a country is termed to have ‘passed’ the scorecard, the Board also considers whether the country performs ‘substantially worse’ in any one policy category than it does on the scorecard overall,” it added.

However, the government will not tap MCC’s assistance facility for now, Finance Undersecretary Mark Dennis Y.C. Joven, said. Instead, the government will focus on securing grants from the US Agency for International Development (USAID).

“We are not applying for MCC assistance since allocation is not as significant as USAID allocation. We are pursuing USAID as our main US bilateral development partner,” Mr. Joven said in a text message on Tuesday.

USAID has extended P228.8 billion to the Philippines over the past 20 years, including the recent P780 million to fund the country’s pandemic response.

MCC uses its competitive selection process to determine which countries will be eligible for its assistance, which includes the use of a scorecard, while the USAID follows an approach where a development program, that usually covers five years, is created to determine which projects will be funded to help the country become less reliant on foreign aid.

Under the MCC scorecard, the Philippines passed six out of eight “economic freedom” indicators. It scored passing marks in terms of fiscal policy, inflation, regulatory quality, trade policy, gender in the economy, as well as land rights and access. However, it received a failing mark in access to credit and business startup.

The Philippines also passed three out of six indicators under “ruling justly,” namely political rights, civil liberties and government effectiveness. It failed in terms of control of corruption, rule of law and freedom of information.

The country also scored positively in three out of six in “investing in people” indicators, namely: natural resource protection, girls secondary education enrolment rate and child health. However, it failed in health expenditures, primary education expenditures and immunization rates.

In a Sept. 8 report, the MCC considered the Philippines among 68 potential countries that will be eligible for its assistance programs, along with other nations such as Bangladesh, Laos, Pakistan, India, Timor-Leste and Vietnam.

The country was listed under the low-income category for having a per capita income of below the World Bank’s threshold of $4,045 gross national income (GNI) per capita for 2021.

Data from the US foreign aid agency showed the Philippines has a $3,850 GNI per capita with a population of 108.117 million.

The MCC relies on the scorecard to determine a country’s eligibility. The scorecard is the third out of the four-stage selection process followed by the agency: from identification of candidate countries, publication of MCC’s selection criteria and its methodology report, the scorecard, and the actual selection of countries.

The Philippines was eligible for $433.91 million in MCC grants in a previous five-year compact signed in September 2010. The grant expired in May 2016 and since then, the government is hoping the US aid agency will continue its development assistance to the country.

The country used $385.072 million of the MCC’s funds from May 25, 2011 to May 25, 2016 to modernize tax collection by the Bureau of Internal Revenue, expand community-driven development projects and improve governance at the village and municipal levels, as well as rehabilitate a major secondary national road in Samar. — Beatrice M. Laforga

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