Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City 

FOURTEENTH CONGRESS
First Regular Session 
 

HOUSE RESOLUTION NO. 33     

“RESOLUTION URGING THE APPROPRIATE HOUSE COMMITTEE TO CONDUCT AN INQUIRY, IN AID OF LEGISLATION, INTO THE TWENTY-ONE MILLION DOLLARS ANTI-CORRUPTION AID FROM THE US GOVERNMENT’S MILLENIUM CHALLENGE CORPORATION AND THE ONE BILLION PESO COUNTERPART FUND BY THE PHILIPPINE GOVERNMENT, TO ENSURE TRANSPARENCY IN THE PROCEDURES, ACCOUNTING AND UTILIZATION OF THESE ANTI-CORRUPTION FUNDS”             

Whereas, the Millennium Challenge Corporation (MCC) is a U.S. federal agency which administers the Millennium Challenge Account (MCA) – a development assistance program to developing nations that “rule justly, invest in their people, and encourage economic freedom”;  

Whereas, proposed by U.S. President George W. Bush in March 2002, the MCC receives an annual funding through the US Congress beginning FY 2004; 

Whereas, President Gloria Macapagal-Arroyo (PGMA) declared in her SONA on July 24, 2006 that “our reforms have earned us P1 billion from the U.S. Millennium Challenge Account for more investigators, prosecutors, and new technology to fight corruption. We are matching this with another billion from our fiscal savings”;  

Whereas, on July 26, 2006, representatives of the MCC and the Philippine government signed the $21 million agreement to fund the two-year threshold program to improve revenue administration and anti-corruption efforts in the country. Said funding will be administered through the US Agency for International Development (USAID); 

Whereas, following the approval by the MCC of the Philippine program in June 2006, PGMA has ordered the release of P1 billion pesos to match the US anti-corruption aid one-for-one. The fund augmentation is expected to be sourced from the standby appropriations for “strategic government reforms” under the 2005 General Appropriations Act; 

Whereas, Finance Secretary Margarito Teves reported that the $21 million dollars aid would go to the Office of the Ombudsman ($6.5 million), Bureau of Internal Revenue’s Run After Tax Evaders (RATE) Program ($9.4 million), Bureau of Customs’ Run After the Smugglers (RATS) Program ($3.1 million), and Department of Finance’s Revenue Integrity Protection Service (RIPS) or Lifestyle Check Program ($1.4 million); 

Whereas, the counterpart fund shall be distributed to eight government agencies which will implement parallel anti-corruption programs, specifically Department of Education and Commission on Higher Education in the inclusion of ethics in governance subjects in the school curriculum; 

Whereas, under the agreement, the Philippine government has to achieve specific targets in the area of fighting graft and corruption, to wit: (1) increase the conviction rate in corruption cases filed before the Sandiganbayan to 40 percent; and (2)  increase the number of cases successfully mediated in the Ombudsman’s Public Assistance Office from the current zero to 300 per year;  

Whereas, in improving revenue administration, the agreement requires to (1) increase the number of cases filed under the Revenue Protection Service of the finance department from 13 to 50; (2)  increase the number of officials charged by RIPS Program from six to 35; (3) increase the percentage of income tax returns filed by professionals and self-employed Filipinos by 10 percent; (4) increase the percentage of corporate tax returns filed by 10 percent; (5) increase the number of cases filed under the Custom’s RATS Program from nine to 24; (6) increase the number of cases filed under the RATE Program of the Bureau of Internal Revenue from 44 to 116; and (7) increase the RATS Program cases filed before the Court of Tax Appeals from two to 15 per year; 

Whereas, the achievement of the foregoing targets would raise the status of the Philippine government from threshold program, which only involves a $21 million grant, to the MCC compact program which would translate to a $175 million grant; 

Whereas, these targets seem unrealistic for a two-year period given the fact that the Philippines abated in its anti-corruption drive in the last eight years from 50.5 percent in 1998 to 37.4 percent in 2005 according to the World Bank; 

Whereas, MCC Vice-President for accountability Charles Sethness warned that failure to implement the anti-corruption program could result in the forfeiture of the grant while the program shall be discontinued if the targets set on the first year are not met; 

Whereas, there is an exigency to come up with guidelines for how the program will be implemented and how the funds will be utilized by the recipient government agencies to ensure that said targets will be efficiently and effectively met; 

Whereas, in consideration of the other numerous anti-corruption programs of the government and the massive funds allocated thereto, which include the P3.18 billion for the banner programs under the Medium Term Public Investment Program (MTPIP) for the period 2004-2010, there is a need to look into the program to avoid the duplication of funding for similar programs and to reduce anti-corruption expenses;  

Whereas, in the interest of transparency, the concerned government agencies, particularly, Office of the Ombudsman, DoF, and PAGC, should periodically report to the public the performance of the recipient government agencies in the utilization of the fund to encourage wide participation in the implementation of the threshold program; 

Now, be it resolved as it is hereby resolved, that the appropriate House committee conduct an inquiry, in aid of legislation, into the twenty-one million dollars anti-corruption aid from the US Government’s MCC and the one billion peso counterpart fund by the Philippine government, to ensure transparency in the procedures, accounting and utilization of the anti-corruption fund”            

Adopted,                                                   

EMMANUEL JOEL J. VILLANUEVA