RP, US Sign $434-Million Fund to Fight Poverty

NEW YORK – The Philippines last Thursday received a $434-million fund to help fight poverty and corruption in the country, following the signing of the RP-Millennium Development Corporation (MDC) compact presided over by President Benigno S. Aquino III and United States Department of State Secretary Hillary Clinton, who expressed total support and confidence in the present administration.

The agreement, which strives to reduce poverty level, was signed by Finance Secretary Cesar Purisima and Millennium Challenge Corporation (MCC) chief executive officer Daniel Yohannes at the Waldorf Astoria Hotel here.

The Philippines’ $434-million MCC compact – which, as Yohannes said, was created “by and for the people of the Philippines” – provides funding for three major projects:

1. The construction and repair of the 220-kilometer Samar Road with $214.4 million as allocated fund.

The road, which passes through 15 municipalities, will improve access to markets and services for farmers, fishers, and small businesses in some of the poorest provinces in the country.

2. Expansion of the Kalahi-CIDSS, a development project that empowers communities by encouraging their participation in poverty alleviation activities. With $120-million allotted fund, the project includes construction of critical infrastructure such as water systems, clinics, and schools.

MCC officials said this innovative project design strengthens local accountability and allows poor communities to effectively design and transparently manage the projects they need to increase their incomes and improve their lives.

3. $54.3 million in investments to computerize and streamline business processes in the Bureau of Internal Revenue (BIR), which is seen to bolster the effectiveness of revenue collection and reduce opportunities for corruption.

In his remark before the signing of the compact, President Aquino said what the Philippines will be receiving “is no ordinary aid agreement” as he likened it to a painting of the Blood Compact displayed in Malacañang in Manila.

“It portrays the first treaty of friendship between a Filipino ruler and the representative of a foreign power. It is only fitting that tonight, we are bearing witness to a modern kind of compact. A solemn agreement, a covenant that binds two entities in a common objective.”

“Our common objective, our shared aspiration, is for poverty to be banished, and for development and prosperity to take its place. The American people, and their government, have put forward the financial means for developing nations to accelerate their development,” the President further said.

“And yet as Ben Franklin reminds us, God helps those who help themselves. All the aid, all the assistance in the world, would be meaningless if it ended up stolen or misspent,” he said.

Further, Mr. Aquino said the Philippines and the US share the same view – that a key to unlocking the potential for growth and prosperity among nations is good and honest governance.

“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.

The President has also committed that the Policy Improvement Process (PIP) Plan of Action will be implemented, in parallel with the Compact projects, to effectively address performance issues such as Control of Corruption (COC). “We are refining our indicators for the Performance Governance System (PGS) which was already introduced in six national government agencies (education, health, public works, transportation, internal revenue, and the police,” said the President.

For her part, Clinton, said the Millennium Challenge Corporation Board is watching countries make gains because of their own hard work, but with the help of the United States. She said the Philippines compact was only possible because for the past few years, the country has seen evidence of a commitment to deliver for the people that we believe is represented in the promise of President Aquino’s election.

One of the projects supported by this compact, Kalahi, comes from a Tagalog phrase that means “linking arms against poverty.”

“We want to assist the people of the Philippines to be able to do more for themselves, and we also want to see results from our investment. This was a negotiated agreement. This was not a decision just to give the Philippines some money – although I’m sure that’s welcome to our friends – this was a negotiation. Because that’s the whole idea behind the MCC; 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,” said Clinton.

She also cited that millions people in left the Philippines have left their native land for a better opportunity.

“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 who work harder than Filipinos,” said Clinton.

Elena Aben, Manila Bulletin