MCC grant goes to Timor-Leste hours after Palace announces withdrawal

MANILA, Philippines — US poverty reduction agency Millennium Challenge Corporation has selected Timor-Leste and The Gambia for grant programs focusing on poverty reduction and policy reform, respectively.

The announcement came barely a day after Malacañang revealed that the country has withdrawn its application for a second aid package from the MCC.

In a statement released Wednesday (Manila time), the MCC noted that the Philippine government decided not push through with a second compact.

"MCC is proud of the achievements of our first compact with the Philippines, and both MCC and the United States are proud of our longstanding positive relationship," the US agency said.

Timor-Leste was granted a five-year grant program designed to improve its economic growth and reduce poverty following the country's "continued strong performance" in the MCC's threshold program.

The Gambia was chosen for a smaller grant program focusing on policy and institutional reform.

Timor-Leste's 2018 MCC scorecard showed that the country ranked high in democratic rights such as political rights o 90 percent and civil liberties on 80 percent while it scored 76 percent on control of corruption.

The Philippines' scorecard, on the other hand, showed that the country ranked 60 percent in political rights, 63 percent in civil liberties and 50 percent on control of corruption.

The MCC also noted that Timor-Leste has "demonstrated a clear commitment to good governance, investing in its people and economic freedom."

Philippine withdrawal

On Tuesday, Presidential spokesperson Harry Roque said that the Philippines withdrew from its application for a second aid package from the MCC to focus on rehabilitation efforts in Marawi City.

"We will withdraw our application for the second cycle, and we will focus instead on the rebuilding of Marawi," Roque said.

The Palace spokesman said the Philippines did not withdraw because of conditions on aid, a factor that the government has previously said could lead to rejecting grants.

"Nothing, it’s just that we have to earmark funds also because these are projects with counterpart funds and of course this will also focus on previously identified projects and we have decided our resources and our priority will be the rebuilding of Marawi for the time being," he said.

READ: Philippines withdraws application for US-backed grant

It is unclear whether the MCC grant could have been used to fund reconstruction efforts in Marawi but Roque said that projects that had been slated for potential MCC funding will be set aside "for the time being."

The previous MCC grant was used for infrastructure.

Finance Secretary Carlos Dominguez said in of the possible MCC grant in September that "the major projects we want are infrastructure, just like the $200-million MCC project in Samar."

He also said in August, however, that the Philippines "will consider their offer. Is it in our priorities? Are the terms reasonable? Are our sovereignty not affected?