MCC readying 2nd compact for PH

Millennium Challenge Corp. (MCC) is in the process of developing its second compact for the Philippines even as the US aid agency noted some risks to the sustainability of a project implemented under the first grant.

In its financial report for fiscal year 2017 released last week, Washington-based MCC said that besides the Philippines, it was developing compact programs with Burkina Faso, Lesotho, Mongolia, Senegal, Sri Lanka and Tunisia.

MCC also recently signed a compact with Côte d’Ivoire, while developing threshold programs with Timor-Leste and Togo.

In a separate business forecast for fiscal year 2018, MCC said it was crafting a “women empowerment in agriculture index study” for an agriculture project under the second compact with the Philippines.

However, it said a recent statement of the United States Agency for International Development’s Office of Inspector General (USAid OIG) noted risks associated with the first Philippine compact, specifically on the Bureau of Internal Revenue’s electronic Tax Information System (eTIS) under the Department of Finance’s Revenue Administration Reform Project (RARP).

“Our audit of the Philippine Revenue Administration Reform Project found that two information systems critical to modernizing tax collection were implemented without clear goals, schedules or sustainability measures, making it difficult for the Philippine government to manage and sustain the systems,” the Oct. 16 USAid OIG memorandum to the MCC read.

MCC said that while it had “acknowledged that the Philippines will face challenges in building upon the systems and procedures initiated under RARP, the government of the Philippines continues to show good faith in honoring its commitments and allocating the necessary resources to manage and sustain the systems.”

“By the end of the compact [early this year] the first stage of eTIS had been implemented in 13 BIR offices, covering 73 percent of taxpayer revenue. The BIR has committed to extend coverage to reach 95 percent of taxpayers, as well as develop and implement five additional modules of eTIS,” the MCC noted.

“The government of the Philippines is also preparing to launch the Philippine Tax Academy in January 2018 to develop the capabilities of tax collectors and administrators, improving their tax collection efficiency and further enhancing the sustainability of MCCs investments. The Secretary of Finance (Carlos Dominguez III) has acknowledged the impact of the MCC RARP in improving BIR’s skills in analyzing data, thereby leading to improved tax collection,” it added.