EDITORIAL - Corruption and foreign aid
() - February 3, 2008 - 12:00am

It was bound to happen sometime: corruption is starting to jeopardize foreign aid to the Philippines. A report the other day said the Millennium Challenge Corp., which is administering the United States’ Millennium Challenge Account, has asked Manila to explain a “dramatic drop” in Philippine efforts to fight corruption.

In controlling corruption – one of 17 performance categories considered by the MCC in its assessment – the Philippines’ rating fell from 76 percent last year to 57 percent at the start of 2008. The MCA reportedly has “serious concerns” about the precipitous drop, which can’t simply be due to a long string of unresolved corruption scandals involving big-ticket government projects.

Those serious concerns have put on hold the elevation of the Philippines to a status that would qualify the country for a larger share of the MCA. Classified by the MCC as a “threshold country,” the Philippines became eligible for a $21-million grant meant to improve revenue collection and fight corruption. When these goals are met, the country can be elevated to “compact” status, which means millions of dollars more in MCC economic assistance. The Philippine government has applied for compact eligibility.

Finance officials are set to meet with MCC executives to explain the government’s efforts to fight corruption. MCC executives should get the views of other quarters for a more accurate picture of the anti-corruption campaign in this country. The MCC can get the opinions of investors who factor in corruption as a cost of doing business here. It is not just perception that consistently gives the Philippines a dismal ranking in international surveys on transparency. There are records of indictments, prosecution, conviction and actual imprisonment of the corrupt. Deposed President Joseph Estrada is not the only VIP convicted of corruption who never spent a moment in a prison cell.

Other governments should also take a closer look at the way their aid is being utilized by the Philippines. Corruption puts funds meant for development and poverty alleviation into the pockets of only a few. Foreign donors should make sure their assistance to the Philippines is used for their intended purpose.

CORRUPTION COUNTRY DEPOSED PRESIDENT JOSEPH ESTRADA MILLENNIUM CHALLENGE ACCOUNT MILLENNIUM CHALLENGE CORP PHILIPPINES PLACE REGION UNITED STATES
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