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Manila Bulletin devider Business devider Banking & Finance devider US aid agency MCC clears Philippine energy grant amid national emergency

US aid agency MCC clears Philippine energy grant amid national emergency

Published Jun 26, 2026 03:57 am

The Philippines has secured approval for a new grant from the United States (US) aid arm Millennium Challenge Corp. (MCC) to support energy-sector reforms, providing a fresh boost to the Marcos Jr. administration’s efforts to strengthen energy security while the country remains under a state of national energy emergency.

In a statement on Thursday night, June 25 (Manila time), MCC announced that its board of directors approved the Philippines threshold program during its meeting last Wednesday, June 24.

MCC said this grant is intended to help the Philippine government address the high cost and unreliability of electricity in the country by modernizing energy-sector governance, strengthening institutions, encouraging investments, as well as expanding opportunities for American businesses.

“The approval of the Philippines threshold program reflects the strength of the US-Philippines partnership and our shared commitment to expanded economic opportunity and mutual prosperity,” said US Deputy Secretary of State Christopher Landau, who also presides over MCC’s board.

“By strengthening energy security, this program will help unlock US private-sector investment and support lasting, broad-based growth across the Philippines,” Landau said.

MCC did not disclose the grant’s amount, but documents seen earlier by Manila Bulletin estimated the proposed Philippine threshold program would receive about $60 million in grant financing.

Unlike loans, grants do not have to be repaid by recipient governments. MCC threshold programs are also smaller than its flagship compact grants, focusing on policy, regulatory, and institutional reforms that could prepare countries for larger assistance programs.

The new threshold program comes as the Philippines continues to grapple with elevated fuel costs and supply risks stemming from the war in the Middle East. The country is among Asia’s most oil import-dependent economies, making it particularly vulnerable to global supply disruptions.

MCC’s discussions with the Energy Regulatory Commission (ERC) prior to the threshold program’s approval focused on regulatory modernization, digitalization, tariff analysis, consumer protection, records management, and measures to address longstanding bottlenecks in the power sector. Recent MCC-ERC engagements also covered reforms involving rate resets, tariff regulation, power supply agreement (PSA) approvals, capital expenditure (capex) applications, market monitoring, and broader operational efficiency improvements, the regulator disclosed in earlier social media posts.

The Philippines was first selected by MCC to develop the current threshold program in December 2023 and was reselected in December 2024 before receiving final board approval on June 24.

The fresh grant marks the Philippines’ second threshold program with MCC. The first, implemented from 2006 to 2009 during the Arroyo administration through the now defunct US Agency for International Development (USAID), focused on improving fiscal policy and strengthening the government’s fight against corruption.

That earlier program provided training, technical support, and information technology (IT) systems to investigators, prosecutors, revenue officials, as well as anti-corruption agencies. Over 3,000 government personnel received specialized training, while all nine program performance targets were exceeded, including improvements in corruption convictions, tax administration, and anti-smuggling enforcement, MCC documents showed.

The Philippines later graduated to a full-scale MCC compact grant worth $434 million, which was implemented from 2011 to 2016 during the Benigno Aquino III administration. The compact financed projects to modernize business processes, rehabilitate roads, and support community-driven development initiatives.

Related Tags

Millennium Challenge Corp. (MCC) threshold program state of national energy emergency Energy Regulatory Commission (ERC)
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