How we got P20 billion

The American ambassador ex-uded his trademark ebullience. “Today’s decision by the MCC Board of Directors, chaired by Secretary of State Hillary Clinton, marks a vote of confidence in the Aquino Administration and its commitment to confront corruption,” declared Ambassador Harry Thomas Jr. “The MCC grant will support President Aquino’s efforts to reduce poverty, stimulate economic growth, combat corruption, and ensure a better future for all Filipinos.” Those were exactly the goals of the Arroyo Administration (no, that’s not a typo) when it proposed in 2009 the package of projects for which the Millennium Challenge Corporation (MCC), an agency of the US State Department, approved last week $434 million in funding. In March 2010, after years of working on the Philippines’ ratings in governance, economic management, and social development, the government was judged by the MCC to be eligible for the nearly P20 billion aid.

However, the US agency’s board deferred its vote to wait and see if the next Philippine president would commit to go ahead with the undertakings proposed by President Gloria Arroyo. A week after his inauguration, President Benigno Aquino 3rd wrote US President Barack Obama that he supported the MCC’s goals. Assured of the projects going forward, the agency untied the purse strings.

The product of months of meetings between Philippine and American officials, as well as the MCC-retained consultant, former economic planning Secretary Dante Canlas, the major programs and their proposed budgets are:

• Construction and repair of the 220-kilometer Samar Road, to uplift the poverty-stricken island, a key link between NPA rebels in Luzon and Mindanao (P9.6 billion)

• Kapit-Bisig Laban sa Kahira-pan-Comprehensive and Integrated Delivery of Social Services (Kalahi-CIDSS), a highly successful nationwide program to develop poor communities with input from the people (P5.4 billion)

• Redesign and computerization of BIR processes to boost tax collection (P2.4 billion).

Other projects will receive the remaining P2 billion of the P19.5-billion package.

The journey to MCC compact status and P20 billion in grants began five years ago, when the Philippines entered the threshold program and got P1 billion in anti-corruption assistance from the agency. President Arroyo matched the money with another billion in government funds, creating the single biggest anti-corruption outlay in the country’s history. It funded reforms at the BIR and Customs, as well as bureaucracy-wide programs implemented by the Presidential Anti-Graft Commission (PAGC).

For all these governance efforts, however, media coverage focused on corruption controversies, leading to perennially poor ratings for the Philippines in perception surveys used by the MCC to assess countries. In a March 2008 meeting in Washington, top Philippine officials including this writer when he was the Cabinet Secretary, cited statements by one of the most widely quoted corruption surveyors on how perceptions captured in surveys may be different from real conditions.

Hong Kong-based Political & Economic Risk Consultancy (PERC) had said that its regional corruption survey is not useful for country comparisons. For one thing, there is no common set of respondents grading all nations in the report. Moreover, ratings are affected by the freedom or muzzling of a country’s media. Corruption in the Philippines gets more coverage than in places with a restricted press. On the country’s sudden drop in ratings in 2007, PERC said that despite the survey score, there was no marked deterioration in conditions on the ground.

Besides explaining integrity ratings and reporting anti-corruption efforts to the MCC, the government also partnered with the private sector in 2008 on joint initiatives to cut red tape and improve governance. Led by the Office of the President and the public-private National Competitiveness Council, government and business joined hands in programs to enhance transparency in the status of anti-graft cases and budget releases, to formulate Harvard-style balanced scorecard strategic plans for six key agencies, and to streamline procedures in 200 LGUs important to business.

Over and above these bureaucracy-level lobbying, President Arroyo lent her own advocacy during trips to the United States and meetings with American leaders, including her fourth White House visit over a year ago, when she and Obama addressed the Washington media. If the MCC aid were all that she got from her official trips in the past decade, the grant would still be more than six times the P3 billion reportedly spent for international travel by the Palace since 2001.

At a Cabinet meeting early this year, President Arroyo and her official family got word that the MCC was about to approve the long-awaited aid. Then came the news that the agency board elected to wait for a new administration to indicate its support for the projects proposed by the outgoing government. With that backing obtained from President Aquino last month, the Millennium Challenge funding is finally on its way. –RICARDO SALUDO, Manila Times

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