As he apparently downplayed the Philippines’ poor corruption ranking in a recent global survey, Foreign Affairs Secretary Alberto Romulo yesterday expressed confidence that the Arroyo governent could still get additional financial grant from United States to fund its poverty reduction programs.

Romulo waxed optimistic the Philippines could retain its Compact Program eligible status and obtain full compact grant from the Millennium Challenge Corp. (MCC) in early 2010.

“The MCC has acknowledged that the Philippines is making siginificant headway in combating corruption and we are optimistic that we will achieve our bid for a full compact grant by next year,” Romulo said.

In Malacañang, Executive Secretary Eduardo Ermita welcomed the latest MCC’s latest report rating as he emphasized in a statement that the country even fared much better, especially with its status getting elevated from being categorized in the low-income country (LIC) to lower middle income country (LMIC).

Ermita said this development in the country’s income category in the MCC’s assessment scheme further showed concrete improvements on the part of the Arroyo government to improve governance and to battle corruption.

With the latest MCC rating, the Philippines stands to lose an additional $500-million poverty reduction funding from the MCC after it failed anew in the agency’s latest corruption index. It qualified in 2007 under the MCC’s threshold program and received $21 million to fund the government’s anti-corruption projects.

In Congress, Sen. Panfilo Lacson stressed it was no longer surprising that the Arroyo government flunked the corruption acid test. “What do we expect from an administration that brazenly steals money, be it from the taxpayers or loan proceeds as in the World Bank fiasco, or even aid such as the fund for Millennium Development Challenge? I will be surprised if we got good marks instead of a failing grade,” he said.

The results of the corruption test will greatly impact on the decision of MCC Board of Directors at their quarterly meeting scheduled for Dec. 9 when they select eligible developing countries for compact funding.

But Romulo maintained that the MCC has consistently recognized the Philippines’ high capacity to be a Compact partner. “They have invested heavily to ensure that the Philippines develops a Compact Program that will help reduce poverty through economic growth,” he said.

Recognizing the Philippines’ continuing commitment to good policy performance, Romulo said MCC vice president for Compact Development Darius Teter even signed a memorandum of understanding with Philippine Ambassador to the United States Willy Gaa last Oct. 16 in Washington DC granting $5.57 million for further development of the country’s Compact projects.

“During the signing, Mr. Teter said that ‘in every way, the Philippines has been a model partner,’” Romulo recalled, adding that “in view of the high political commitment that the Philippines has attached to the MCC program and more importantly, in pursuing governance reforms, the MCC has been sending assessment missions in the past several months to help develop the Philippines’ proposed Compact projects with the last mission composed of some 30 experts.”

On the recently released scorecard, Romulo said the MCC assured that “there was no absolute decline in the Philippines’ control of corruption score.”

“They added that in general, the Philippines has improved in absolute terms on the indicators and did well in comparison to the low income group,” Romulo said, adding that the Philippines’ ranking on Control of Corruption “has actually improved by six notches from 39th to 33rd, and four ranks above the average.”

Romulo also cited a World Bank report that now classifies the Philippines as an LIC in the same group as China, Indonesia and Thailand. In this income group, the Philippines was rated lower than it could have as low income country.

“The improvement in the Philippines’ control of corruption score as an LIC reflects the institutional and comprehensive fight of the Philippine government against corruption from preventive to punitive measures,” he said.

The MCC is a US government corporation designed to work with developing countries on Millennium Challenge Account (MCA)-funded programs for economic growth.

Two MCA programs available are the primary “Compact Program” and the secondary “Threshold Program,” which helps countries that are close to qualifying for Compact Program assistance address specific policy weaknesses. Both programs are based on the principle that aid is most effective when it reinforces good governance, economic freedom, and investments in people that promote economic growth.

SOURCE: THE DAILY TRIBUNE By Michaela del Callar and Aytch de la Cruz 11/12/2009