Philippines no longer a low-income country

The Philippines has graduated from a low-income country category to the lower middle-income country category, making it eligible for a multimillion-dollar grant from the Millennium Challenge Corp. (MCC), the Department of Foreign Affairs reported Thursday.

The MCC board of directors chaired by US Department of State Secretary Hillary Clinton deemed the country eligible for a $5.57- million grant, or around P228 million, as a result of its graduation to higher catergory for the 2010 Fiscal Year.

MCC is a United States government corporation that works with some of the poorest countries in the world to reduce global poverty by promoting sustainable economic growth. Since its creation in 2004, it has approved over $7 billion in poverty reduction compacts with 20 partner countries.

“In making its decision to reselect the Philippines and Indonesia, the board took into consideration each country’s current indicator performance as an LMIC [lower middle-income], as well as the information that the Philippines and Indonesia would have met the criteria as a low income country,” the MCC said in a press statement.

This is the third time that the Philippines was endorsed as compact eligible, allowing the country to qualify for a large scale-grant for Fiscal Year 2010 under MCC’s Millennium Challenge Account (MCA) program.

“Graduation to a higher income category as well as other factors including higher medians and changes to the indicator system can impact a country’s indicator performance, while not necessarily reflecting a change in policy performance,” it added.

Prior to its promotion as an lower middle-income country, the Philippines has improved its rating in the Control of Corruption (COC) indicator to 33rd from 39th, which is above the 37th rank of the median country out of the 73 countries on MCC’s list of lower-income countries.

Democrat Congresswoman Sheila Jackson Lee of Texas said Manila exceeded 10 out of the 17 indicators on the MCC scorecard.

The MCC scorecard showed the Philippines received passing marks for political rights (53 percent), civil liberties (62 percent), government effectiveness (79 percent), voice and accountability (59 percent), regulatory quality (74 percent), land rights and access (58 percent), trade policy (65 percent), inflation (48 percent), fiscal policy (56 percent) and natural resource management (84 percent).

Manila, however, failed in business start-up (34 percent), immunization rates (41 percent), girls’ primary education completion (44 percent), health expenditures (19 percent) and primary education expenditures (32 percent).

“This development is remarkable given the shift in income classification,” Jackson pointed out.

The MCC grant is expected to help the Philippines complete beneficiary analysis, engineering designs, and environmental and social impact assessments for its compact proposal for 2010 to 2014, which is in the final stages of development.

Manila’s proposal, according to the Foreign Affairs department, focuses on three projects: Secondary National Roads Development; Kapit-Bisig Laban sa Kahirapan-Comprehensive and Integrated Delivery of Social Services and Integrated Revenue Information System.

The work for the Philippines, however, is far from over since the MCC is still reviewing its plan of action to strategically address its performance on issues such as control of corruption. The MCC’s Policy Improvement Process will monitor the country’s progress in preventive measures against corruption such as improving transparency in budget delivery, institutionalizing a balanced scorecard system on improved frontline public services in specific national agencies and developing selected local governments as “sparkplugs” for economic development.

Foreign Affairs Secretary Alberto Romulo said, “with the country’s reselection as Compact eligible for Fiscal Year 2010, the Philippine government reiterates its continuing commitment to good policy performance.” –LLANESCA T. PANTI REPORTER, Manila Times