MANILA, Philippines — The Philippines may receive grants amounting to $433 million from the United States’ Millennium Challenge Corp. (MCC) starting next year owing to apparent improvements in governance and other key indicators.

In a report released last Wednesday, the MCC included the Philippines in a list of candidate-countries under the “low income” category eligible to receive assistance for 2018.

Finance Secretary Carlos Dominguez III welcomed the development. But should the MCC decide to push through with the grant­, he said the Philippine government would still need to go over the conditions set by the agency under the compact and “determine if they are aligned with our priorities.”

US embassy press attaché Molly Koscina, said that being a “candidate country” does not automatically mean it is qualified to receive a second MCC grant.

“It is important to note that being a candidate country does not necessarily mean a country is eligible for MCC assistance. The MCC board of directors has not made a decision on the Philippines’ eligibility for a second compact,” she told ABS-CBN.

Candidate countries are chosen based on their per capita income levels and their eligibility to receive assistance under US law.

The first MCC grant to the Philippines, amounting to $434 million, was implemented in May 2011 and ended in May last year.

Last December, under then US president Barack Obama, the MCC deferred the $433-million grant to the Philippines over “concerns around rule of law and civil liberties” under the Duterte administration.

Obama criticized President Duterte’s war on drugs. Data from the Philippine National Police showed thousands of drug personalities have been killed since operations began on July 1 of last year.

A scorecard of the Philippines released by the MCC in November last year, however, showed that the country garnered passing scores in 13 out of 20 indicators, including control of corruption, rule of law and civil liberties – a slight improvement from the performance in 2015 wherein the country passed 12 indicators.
When US President Donald Trump stepped into office, ties between the Philippines and the US became warmer.

In a phone call last May, Trump told Duterte that Obama did not understand the drug menace in the Philippines.

The US Congress’ human rights commission probed Duterte’s illegal-drugs campaign in July, with US lawmaker James McGovern saying the campaign is “not necessary.”

In a report in May, the MCC noted that the first Philippine compact granted in 2010 worth $434 million improved business processes in the Bureau of Internal Revenue, thereby nearly doubling revenue collections, reducing opportunities for corruption and supported increased public investment.

The first compact program, it said, also built over 4,000 small-scale community infrastructure projects that benefited nearly one million households, exceeding the original compact targets.

“In building these projects to help address communal priorities in a sustainable manner, the compact promoted participation by women,” the MCC said.

The Secondary National Roads Development Project on Samar island rehabilitated 222 kilometers of a national road using climate-resilient standards and with significant safety enhancements, the MCC said.

The project reduced transportation costs, expanded commerce and helped raise the incomes of the island’s people, it said.

Dominguez said the move of MCC to uphold the eligibility of the Philippines for a new compact is “another confirmation of the Duterte administration’s strong commitment to the rule of law and inclusive growth.”

“The government under the Duterte administration continues to vigorously implement initiatives that reinforce the Philippines’ commitment to good governance, peace and order and the rule of law,” Dominguez said.