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10/12/2009: RP’s MCA Bid on Track with Reselection as Compact Eligible for 2010 – Gaa

10 December 2009. Following confirmation of a favorable decision made yesterday by the Millennium Challenge Corporation’s (MCC) Board of Directors on the Philippines’ Compact for 2010, Philippine Ambassador to the United States Willy C. Gaa said, “The Philippines’ bid for Compact status is on track with the unanimous reselection of the Philippines as Compact eligible for FY 2010.”

“Being Compact eligible means that the Philippines has an opportunity to qualify for a large-scale grant in 2010 under the MCC’s Millennium Challenge Account (MCA) program. This grant will greatly enhance the Philippine Government’s ability to carry out vital projects aimed at spurring economic growth and reducing poverty. This is very positive news for the Philippines and the Filipino people.” Ambassador Gaa explained.

Ambassador Gaa stressed that the Philippines’ reselection as compact eligible is a necessary step towards concluding a Compact Agreement. “The signing of a Compact Agreement hinges primarily on the selection of a potential partner Country as Compact eligible each year, followed by the submission of a Compact proposal, based on MCC’s analysis of a country’s ‘key constraints’ to growth,” Ambassador Gaa clarified.

As compact eligible for 2010, the Philippines can now continue with negotiations for a Compact Agreement, which include on-going technical assessments on the GRP Compact proposal on road infrastructure, fiscal governance and community-led development projects; pre-implementation phase of the Compact proposal; and development of a plan of action under the Policy Improvement Process (PIP) to address performance issues such as control of corruption (COC).

The rigorous Compact process takes about 3-5 years to conclude. A Compact partner must be reselected each year as eligible to continue implementation of the Compact program.

At MCC’s Public Outreach Meeting today which discussed the decisions taken by the Board, MCC Senior Management confirmed that “in making its decision to reselect the Philippines and Indonesia, the Board took into consideration each country’s current indicator performance as an LMIC, as well as the information that the Philippines and Indonesia would have met the criteria as a low income country.”

Under the low-income country (LIC) category, the Philippines’ ranking on the Control of Corruption (COC) indicator has improved by six notches, from 39th to 33rd, above the 37th rank of the median country out of the 73 countries in the LIC list of the MCC.

The continuing improvements in the Philippines’ COC scores have been reported by independent and credible third party sources of information such as the World Bank Institute for the 2009 World Governance Indicators scorecards, the Hong Kong-based Political and Economic Risk Consultancy’s (PERC) 2009 Asian Corruption Survey and the Global Integrity’s 2008 Global Integrity Report.

This is the third time that the Philippines was endorsed as Compact eligible. The country’s Compact proposal for 2010-2014, which is in the final stages of development, focuses on three (3) high-impact projects - Secondary National Roads Development (SNRD); Kapit-Bisig Laban sa Kahirapan-Comprehensive and Integrated Delivery of Social Services (KALAHI-CIDSS) and Integrated Revenue Information System (IRIS).

Asked to comment on what would be the following steps following reselection as Compact eligible, Ambassador Gaa noted that, “We have hurdled a major step in the process. We now can begin to finalize details of the Compact proposal with the MCC. There is still some work to be done and the Government will be doing its best to secure this grant that would bring significant benefits towards our country’s development and in the lives of the Filipino people.”

The MCC Philippine Transaction Team is currently in Manila finalizing the GRP Compact proposal which will be submitted soon to the MCC Board for review. END.