MCC since its inception has approved over $8.4 billion in so-called “compact and threshold programs” all over the world.

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The US Government has an independent foreign aid agency called the Millennium Challenge Corporation (MCC) The US Congress created it in 2004, a bipartisan product aimed to help governments fight poverty. It delivers foreign aid based on a government's good policies and the success of its anti-poverty and anti-corruption programs. 

The MCC forms partnerships with the poorest countries that are committed to good governance, economic freedon and investing in the development of their citizens. 

What.the MCC calls a “threshold program” has the aim of making a country eligible for the large-scale “compact” grants. Under the threshold program the country’s leaders and civil servants are watched—and properly rated using the MCC scorecard—as to their ability and zeal in achieving targeted reforms.

In most countries that have partnered with the MCC, the potential of becoming a compact-grant awardee has been a great incentive for government officials to work hard at achieving the initial goals of massive institutional reforms.

The MCC says that all but one of the threshold programs worldwide have been administered by the US Agency for International Development (USAID).

MCC awarded its threshold program assistance to the Philippines in 2006, when the president was still Mrs. Gloria Macapagal Arroyo. The so-called “Millennium Challenge Account—Philippines Threshold Program (MCA-PTP)” was designed to help our country improve its performance on specific indicators and eventually become eligible for an MCC Compact grant.

MCA-PTP was implemented from November 2006 to May 2009. The total grant amount was $20,685,000. The program was managed by USAID, and implemented through a contract with Management Systems International (a US-based consulting firm) and a grant to The Asia Foundation. Threshold program objectives, scope and performance indicators were outlined in the Strategic Objective Grant Agreement between USAID and the Philippine Government.

The MCA-TPP had twin main goals: to reduce opportunities for corruption and improving revenue administration. To meet these goals, the threshold program gave technical assistance to five agencies: the Office of the Ombudsman, the Revenue Integrity Protection Service (RIPS), the Bureau of Internal Revenue (BIR), the Bureau of Customs (BOC) and the Department of Justice (DOJ). The program supported the enforcement efforts of these agencies against corruption, tax evasion and smuggling through training of investigators and prosecutors, surveillance and IT equipment, work flow re-engineering, and research and case analyses.

Substantial assistance was provided for the nationwide computerization of BIR district offices, specialized IT system for managing human resources of BIR, IT connectivity for improved case management at the Ombudsman and assistance to BOC for drafting a bill for the harmonization of customs and trade laws.

All these five government agencies, monitored and measured using scorecards, attained extremely impressive accomplishments.
It was seen that the Philippine threshold program “significantly enhanced the enforcement capability and systems of the five agencies for the effective detection and prosecution of corruption, tax evasion and smuggling.”

Too long and too many for our available space, the accomplishments thanks to the support of the threshold program were solid and impressive.

April 2009 Compact grant disappointment
On the basis of the success of the “Millennium Challenge Account—Philippines Threshold Program (MCA-PTP)” the Philippine Government submitted the final draft of its Compact grant proposal to MCC in January 2009.

All the government officials and MCC people in the Philippines involved in the effort were hoping and many sere praying, for the compact grant to be approved by April 2009. But approval did not come.

It was a big disappointment for the heads of the government agencies and their assistants. The latter were executives specifically tasked with monitoring reforms and enforcing good governance goals as targeted—and as OK’ed by the MCC through USAID.

Also disappointed were the president of the Development Academy of the Philippines, Career Senior Official, Tony Kalaw Jr. He was the government’s overall coordinator, working closely with the Institute for Solidarity in Asia’s (ISA) founding Chairman Dr. Jesus Estanislao. Even before the government’s partnership with MCC in the threshold program, these agencies were already subjecting themselves to ISA’s Public Governance System scorecard.

Why did the Philippine government not win the MCC Compact grant in April 2009—as expected?

MCC decided it that it was more prudent to wait for President Benigno Aquino 3rd to assume office. MCC apparently wanted to make sure that the Aquino administration would be as committed to the MCC goals and methods as the Macapagal administration had been—as proved by its performance in the threshold program.

Finally, on September 23, 2010, Finance Secretary Purisima representing our country and the MCC’s CEO Daniel Yohannes signed the Compact-grant agreement. The witnesses were President Aquino and US Secretary of State Hillary Clinton.

Entry into force May 25, 2011
Eight months later, on May 25, 2011, the Compact grant became operational or, in the MCC jargon, “entry into force was achieved.”

The grant is in the amount of $434 million. The Compact must be implemented in five years.

The compact grant will be used to “support reforms and investments to modernize the Bureau of Internal Revenue [about $54.4 million], to expand and improve a community-driven development project, the Kalahi-CIDSS (about $120 million) and to rehabilitate a secondary national road in Samar province [about $214.4 million].”

Very good news. But much better news is that target objectives are being met ahead of schedule. That would prov prove that “Kung walang corrupt, walang mahirap” is still the administration battle cry.