The Philippines once again failed in the pass-or-fail corruption benchmark needed to secure grant assistance from the United States aid arm Millennium Challenge Corp. (MCC).
MCC's fiscal year 2025 Country Scorebook released on Nov. 21, which listed down the possible compact and threshold program beneficiaries for next year, showed that the Philippines passed 14 out of the 20 annual indicators across three categories.
In particular, the country garnered green marks in the following indicators: inflation, regulatory quality, trade policy, gender in the economy, land rights and access, access to credit, and employment opportunity (in the area of "economic freedom"); political rights, civil liberties, government effectiveness, and freedom of information (in "ruling justly"); as well as health expenditures, girls' lower secondary education completion rate, and child health (in "investing in people").
However, the Philippines' garnered red marks in fiscal policy (in economic freedom); control of corruption and rule of law (in ruling justly); and also in education expenditures, natural resource protection, and immunization rates (in investing in people).
Under MCC's rules, a compact or multi-year funding can only be extended to countries that passed at least half of the yearly indicators, which the Philippines did, as well as pass what are regarded as "hard hurdles" for eligibility—the civil liberties and political rights (that both measure democratic rights), and control of corruption indicators.
As in recent years, the country continued to fail in the control-of-corruption indicator, which, alongside the rule-of-law indicator that also got a red mark, is based on both the Washington-based multilateral lender World Bank and non-profit Brookings Institution's latest Worldwide Governance Indicators (WGI).
The Philippines landed in the 41st percentile for controlling corruption, whose passing score must be above the 50th percentile.
In MCC's fiscal year 2024 country scorebook that came out last year, the Philippines actually garnered fewer green marks—in only 11 indicators, and similarly got a red mark in control of corruption.
Still, the Philippines had been chosen by MCC for a smaller threshold grant together with Tanzania, as these two countries "experienced set-backs, but are now on a positive governance trajectory."
Threshold programs are being developed with countries which "demonstrate a significant commitment to meeting the eligibility criteria but do not qualify for MCC compact assistance."
In the case of the Philippines, MCC had noted that the President Ferdinand R. Marcos Jr. earlier "committed to advancing critical reforms, pledged to increase transparency, and strengthened judicial independence and the prosecution of human rights violations."
"By selecting the Philippines for a threshold program, MCC can support the government to undertake policy and institutional reforms to address the country's development needs while also encouraging further progress on advancing labor and human rights and combating corruption," the aid agency said in December 2023.
The Philippine program is aimed at "supporting the government's efforts to reduce poverty and encourage economic growth, while continuing to strengthen just and democratic governance, economic freedom, and social investment" through institutional and policy reforms, MCC subsequently said last February.
MCC chief executive officer (CEO) Alice Albright likewise visited the Philippines in February 2024, during which she met with Finance Secretary Ralph G. Recto, Socioeconomic Planning Secretary Arsenio M. Balisacan, as well as Special Assistant to the President for Investment and Economic Affairs Frederick D. Go.
Last September, Manila Bulletin already asked for updates on this MCC threshold program for the Philippines, but Department of Finance (DOF) officials did not provide any.
It was also in September when the Philippines was included among MCC's 62 candidate-countries for its 2025 fiscal year.
The Philippines joined 58 other candidates in the low-income country category, while three countries were short-listed as potential lower middle-income beneficiaries.
Following a $20.7-million threshold program from 2006 to 2009, the Philippines in 2011 received its maiden MCC compact grant worth $434 million, which funded the construction of roads in Samar island, reformed revenue administration, and supported social services delivery to the poor.
After the first compact in ended 2016, the MCC deferred a new one for the Philippines as the country had been "subject to a further review of concerns around rule of law and civil liberties" under then-US president Barack Obama, who had been critical of former president Rodrigo R. Duterte's deadly war on drugs.
As such, the Philippines in 2017 also withdrew from the planned second MCC grant to build roads along the coast of Eastern Luzon.