With the government still hobbled by allegations of corruption, as seen recently by the pork barrel scam involving P10 billion in taxpayers’ money, people could not be blamed for turning a mistrustful eye on public service.
But one state-run institution aims to earn back the people’s trust in the government by implementing public projects and programs aboveboard, and putting anticorruption mechanisms in place.
The Millennium Challenge Account-Philippines (MCA-P) is an institution created to manage the utilization of over $400 million in grant extended under the “Compact” program of the US government’s Millennium Challenge Corp. (MCC).
MCA-P aims to aid the economic development of, and help reduce poverty incidence in, the Philippines mainly through proper management of projects financed through the grant.
To ensure compliance with the principles of transparency and integrity required by the MCC, the Philippine government created the MCA-P to ensure there is an entity solely focused on the proper use of the grant from the American government.
The institution observes a strict directive of ensuring that the grant will be used only for “hard” projects, or those that are tangible like infrastructure. This is to avoid corrupt practices from taking place, according to its officials.
The grant, amounting to $434 million or nearly P19 billion, was approved by the MCC in September 2010 to fund projects that ought to be completed within five years.
With the grant period now past the halfway mark, the MCA-P is proud of the projects it is overseeing, and how they are taking shape.
“Amid negative news about alleged misuse of public funds, it is worthwhile to inform people that there are projects done aboveboard,” Marivic Anonuevo, managing director and chief executive officer of MCA-P, told the Inquirer.
Anonuevo said that, for quite a while, the Philippines had been applying for the MCC grant of the US government under its “Compact” program. It was only when President Aquino assumed office that the MCC approved the country’s application.
Under the “Compact” program, the MCC may extend bigger amounts of financial assistance.
Previously, the Philippines had been receiving assistance from the MCC only through its “Threshold” program, where recipient countries get smaller amounts of aid.
For instance, the Philippines got only $21 million under the last “Threshold” grant for projects implemented between 2006 and 2009.
In an interview, Anonuevo said the good governance agenda of the Aquino administration allowed the Philippines to graduate to the Compact level and secure a much bigger amount of financial assistance.
An effective anti-corruption agenda is a key requirement for a country to secure a grant from the MCC under the Compact program, Anonuevo said.
She said it was crucial that the grant-funded projects be implemented properly and completed on time so that the Philippines could secure grants under the Compact program in the future.
“The MCC is keen about projects being done aboveboard. One of its basic requirements in the extension of a grant is integrity,” She says.
With the multimillion-dollar grant, the MCA-P is overseeing three projects, all of which are meant to help the country attain inclusive economic growth.
Road development
The first project managed by the MCA-P is the “Secondary National Roads Development Project (SNRDP),” which is valued at $214.4 million and accounts for much of the grant.
SNRDP involves the rehabilitation of a 222-kilometer road from Samar to Eastern Samar. The project is meant to boost commercial activities in those provinces by substantially reducing the time it takes to transport goods.
Also, the road project is expected to generate additional employment in the concerned areas.
Over 1,600 people have so far been hired to undertake the infrastructure work, 73 percent of whom are local residents, Anonuevo said.
Community development
The second project funded by the grant from the MCC is the “Kapit-bisig Laban sa Kahirapan-Comprehensive Integrated Delivery of Social Service,” also known as “Kalahi-CIDSS.”
A community-driven development initiative of the Department of Social Welfare and Development (DSWD), Kalahi-CIDSS is a set of projects that are chosen by the residents themselves, based on their needs.
The DSWD has been implementing this project since early 2000s, but this is the first time the government agency got funding support from the MCC.
The MCC earmarked $120 million for the Kalahi-CIDSS subprojects, covering 160 of the poorest municipalities in the country.
MCA-P identified some of the Kalahi-CIDSS subprojects that had been completed as of August last year: 239 farm-to-market roads, 158 school buildings, 113 drainage facilities, 119 water systems, 97 access trails, 87 daycare centers, 68 health stations, 36 river and flood-control systems, 30 pre- and post-harvest facilities, 29 foot bridges, 19 sanitation and solid waste management facilities, and 16 soil protection facilities.
Other subprojects under the Kalahi-CIDSS are expected to be completed within President Aquino’s term.
Revenue reform
The third project funded by the MCC is the “Revenue Administration for Reform Activity (RARP),” which will enhance the electronic taxpayers database and tax audit facilities of the Bureau of Internal Revenue (BIR).
The project likewise includes provision of support facilities for the Revenue Integrity Protection Service (RIPS), a unit of the Department of Finance tasked to conduct lifestyle checks on public servants and pursue corruption cases.
RARP has been given an allocation worth $54.3 million.
Andres Saracho, communications director of the MCA-P, said the MCC found it prudent to provide funding support to the BIR given its crucial role in the government and economy.
The BIR accounts for at least 60 percent of the government’s annual revenue collection and finances its overall expenditure requirements.
Improvement of the BIR’s technological capacity will further shore up its collection efforts.
“The BIR has a very important role. Improving the agency’s capacity, therefore, means a lot in achieving the development objectives of the MCC,” Saracho said.
Last year, the BIR collected P1.217 trillion in taxes. Although the amount was 3-percent short of the target, it marked a 15-percent year-on-year growth.
“For the government to be able to spend more on social services and infrastructure, the BIR has to collect more,” Saracho said.
Toward inclusive growth
The Philippines recently became one of the fastest growing economies in Asia, having expanded by 6.8 percent in 2012, and by 7.2 percent last year.
Despite the gains, poverty incidence in the country remains one of the highest in the region, affecting a fourth of the population.
Economists have said that infrastructure work and other projects that can generate more jobs for the poor are needed to significantly reduce poverty in the country.
The MCC hopes to do its part in the government campaign and help turn the country into one of the drivers of poverty reduction in Asia, Anonuevo said.