RP gets $434-M grant from US

Money meant to fight poverty, corruption

By Norman Bordadora
Philippine Daily Inquirer
First Posted 00:45:00 09/25/2010

Filed Under: Foreign Aid, Poverty, Graft & Corruption

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NEW YORK—The United States granted the Philippines $434-million (P19 billion) in financial assistance hoping it
would lead to economic reforms and spur Filipinos to help build their own country, instead of looking for better
opportunities abroad.

US Secretary of State Hillary Clinton aired the call at the signing of the assistance compact at Waldorf Astoria hotel
on Thursday (Friday in Manila)—one of the highlights of the weeklong visit of President Aquino, who witnessed the
signing.

The money, intended to be used to build roads and carry out projects aimed at reducing poverty and fighting
corruption, was awarded under the US-run Millennium Challenge Corp. (MCC) chaired by Clinton.

The MCC, an independent US foreign aid agency, aims to help developing countries reduce poverty as long as they
meet performance criteria on democratic principles and the rule of law.

“We hope that, Mr. President, the people of your country will be able to make a good living in their own country. And
in order to do that, there must be a partnership that creates the conditions for economic opportunity,” Clinton said.

“I know how smart the Filipino people are. I know how hard they work. I’m not sure there’s any group of people
anywhere in the world that works harder than Filipinos,” she added.

Clinton, however, said Filipinos were prevented from achieving economic success by corruption in government.

“But let’s be very honest here. Too many of them feel that they cannot progress in their own country. Too many of
them feel that the elite in business and politics basically call the shots, and there’s not much room for someone who’s
hardworking, but not connected,” Clinton said.

“Too many of them believe that even if they get the best education they can, that there won’t be an opportunity for
them, and so they take that education and help build someone else’s economy, very often here in the United States,”
she added.

Clinton said the signing of the compact had become possible “because for the past few years, we have seen
evidence of a commitment to deliver for the people that we believe is represented in the promise of President
Aquino’s election.”

A cancer in society
The signing of the compact was one of the reasons Mr. Aquino undertook the trip, aside from his scheduled address
before the United Nations on Friday and meetings with US businessmen.

The agreement was signed by Finance Secretary Cesar Purisima and MCC chief executive officer Daniel Johannes.

“This was a negotiated agreement. This was not a decision just to give the Philippines some money ... This was a
negotiation. Because that’s the whole idea behind the MCC,” Clinton said.

“There are certain principles that we believe in, and the Philippines has made a commitment to these principles. We
believe that you can unleash the human potential in a country like the Philippines by tearing down the barriers to
economic growth and fighting corruption, which is like a cancer in the economy and society,” she said.

Worthy steward

Mr. Aquino agreed that a beneficiary-country of the MCC should prove itself worthy of the assistance.

“If the American people, through their government, can commit resources to their friends, their friends owe it to those
pledging assistance and to themselves to be worthy stewards of what they will receive,” he said.

He said this was the reason the Philippine proposal to the MCC underwent rigorous consultative processes.

“We will do our part to use this grant wisely,” Mr. Aquino said, pledging to “effectively address” the issue of corruption.

“We will continue ... lifestyle checks programs.” he said.

Roads, schools, clinics

Compacts are large, five-year grants for countries that pass the MCC’s eligibility criteria.

Of the total amount, $214.4 million will be used to rehabilitate 222 kilometers of the Samar Road. It will connect 15
towns of one of the country’s poorest provinces and reduce transportation costs for farmers, fishers and small
businessmen who bring their goods to the markets.

“(The) investment

will increase commerce in and between the provinces of Samar and Eastern Samar, and ultimately increase incomes

,” the MCC said in a brief.

Some $120 million will go to the Kabisig Laban sa Kahirapan-Comprehensive and Integrated Delivery of Social
Service project for building water systems, clinics and school buildings.

Approximately $54.4 million will be used to computerize the collection of taxes by the Bureau of Internal Revenue.
The MCC said the project “addresses the need to raise tax revenues and reduce tax evasion and revenue agent-
related corruption.” With a report from Inquirer Research