The US government has increased its grant assistance to the Philippines to $135.1 million for fiscal year 2010, mostly in development and security aid, negating earlier reports that it will decrease financial assistance to the country due to alleged human rights abuses.

The Department of Foreign Affairs said the grant assistance for 2010 is higher than the $118.7 million earlier requested by the Obama administration.

It also represents an increase of $15.4 million or 13 percent higher compared to fiscal year 2009’s appropriated budget of $119.7 million.

Malacañang warmly welcomed the increased US grant.

“We’re thankful for financial aid that comes our way,” presidential spokesman on economic affairs Gary Olivar said in a press briefing Thursday.

“Clearly, any funds we can get will always be welcome.”

The increase in grant assistance is part of the FY 2010 Omnibus Appropriations Bill which was approved by the US House of Representatives on December 8 and the US Senate on December 13. The legislation will now go to President Barack Obama for signature.

Foreign Affairs Secretary Alberto Romulo said the significant increase in financial assistance for the coming year is an indication of US confidence and the value it places on its relationship with the Philippines.

“The US Congress has always played a key role in ensuring that the alliance between the Philippines and the United States remains strong, and is supportive of peace and development efforts in the Philippines, particularly in Mindanao,” Romulo said.

He said a full two-thirds of the programmed US assistance is devoted to Mindanao for livelihood, basic services, and reintegration of ex-combatants in the strife-torn region.

The combined Development Assistance and Economic Support Fund were increased to $70.3 million from $60 million in FY 2009. Foreign Military Financing was also increased to $32 million from $15 million over the same period.

Also included in the FY2010 appropriations is the amount of $198 million for the Filipino Veterans Equity Compensation Fund that will benefit Filipino World War II veterans. As of December 1, 2009, over $128 million had been awarded by the US to eligible Filipino veterans.

Aside from the grant assistance, the country also has a chance to receive $450 million from the US Millennium Challenge Corporation, whose Board of Directors is led by US Secretary of State Hillary Clinton. The board recently unanimously reselected the Philippines as compact eligible for FY2010.

The MCC is a US-based independent foreign aid agency that aims to fight global poverty. It has approved over $7 billion in poverty reduction compacts with 20 partner countries.

The Philippines ranks second after Indonesia in terms of receiving development assistance globally. Manila receives the highest level of International Military Education and Training (IMET) funds in East Asia and the Pacific and the 12th biggest share of US Foreign Military Financing in the world.

In early November, there had been reports that the US will slash $2 million in military aid to the Philippines due to human rights concerns. It was denied by the DFA.