ALMOST a decade after the Philippines lost its compact program with the Millennium Challenge Corporation (MCC), the country has qualified for a new threshold program that will renew its engagement with the Washington-based institution.
In a recent briefing, MCC Chief Executive Officer (CEO) Alice Albright told reporters that she has met with Finance Secretary Ralph G. Recto and Socioeconomic Planning Secretary Arsenio M. Balisacan to discuss the threshold program and what it will mean for the Philippines.
Albright said the country is one of three that will benefit from the threshold programs — smaller grant programs designed to support policy and institutional reforms that address economic growth constraints.
We recently had a change in the legislation that allowed us to have a threshold [program] with a country after the country had a compact, so that is a new feature, Albright said. And so we’re very excited about that because it continues to give us more and more sort of options and flexibilities, and choices and pathways [in] working with different countries.
The first step in accessing this new threshold program, Albright said, begins with the government’s appointment of a national coordinator for the MCC. Once this is done, she said the MCC can start working on the specifics of the new program, including the amount as well as areas of cooperation.
Choosing areas for cooperation, Albright said, requires analytical work that will identify the priorities and project design specifics.
I think what will be very beneficial here is that we already have a long-standing history with the Philippines, and so there are people who know how we work and how the process goes, so I think we’re off to a great start. And we’re very optimistic about the future of the program, Albright said.
Choosing the Philippines was still based on the MCC scorecards, the same ones used to evaluate the eligibility of countries that qualify for compact programs.
The scorecards measure a country’s performance using 20 indicators including fiscal policy, freedom of information, gender in the economy, inflation, civil liberties, and control of corruption, among others.
The MCC said a country is considered to have passed in a given indicator if it performs better than the median score in its income group or the absolute threshold.
A country is considered to pass the scorecard if it passes at least 10 of the 20 indicators, passes the Control of Corruption indicator, and passes either the Civil Liberties or Political Rights indicator.
Based on the 2024 scorecard, the Philippines passed 11 indicators but failed in nine. The indicators where it passed are inflation, regulatory quality, trade policy, gender in the economy, land rights and access, employment opportunity, political rights, civil liberties, government effectiveness, natural resource protection, and child health.
The nine indicators where the country failed are fiscal policy, access to credit, control of corruption, rule of law, freedom of information, health expenditures, education expenditures, immunization rates, and girls’ lower secondary education completion rate.
In December 2023, the MCC Board selected Cabo Verde as newly eligible to develop a compact for the purpose of regional economic integration, while Tanzania and the Philippines were selected to develop threshold programs.
MCC noted that in recent years, both the Philippines and Tanzania have demonstrated renewed commitments to advancing critical reforms to strengthen democratic governance, protect human rights, and fight corruption.
In recognition of these efforts, MCC’s Board selected the Philippines and Tanzania to partner with MCC in the development of threshold programs that focus on the policy and institutional reforms that countries can undertake to reduce poverty and generate economic growth.
Overall, the Philippines’ qualification for the threshold program signifies a new opportunity for the country to address economic growth constraints and implement critical reforms. With the support of the MCC, the Philippines aims to generate positive outcomes in its continued pursuit of poverty reduction and sustainable development.
