Diokno: Re-engagement of US Millennium Challenge Corporation with PH a vote of confidence in PBBM admin

Finance Secretary Benjamin E. Diokno has welcomed the United States Millennium Challenge Corporation (MCC)’s decision to re-engage with the Philippines through the development of threshold programs that will support policy and institutional reforms towards economic growth, highlighting that such move is a vote of confidence in the Marcos, Jr. administration’s commitment to strengthen democratic governance, uphold human rights, and combat corruption.

The MCC was created by the US Congress to invest in well-governed countries. It provides time-limited grants promoting economic growth, reducing poverty, and strengthening institutions.

On December 13, 2023, the MCC Board of Directors selected the Philippines to develop threshold programs in recognition of its renewed commitment to advancing reforms in good governance, human rights, and anti-corruption.

“We welcome the eligibility of the Philippines under the Millennium Challenge Corporation Threshold Program which we hope will allow us to further access the bigger Compact Program. We appreciate the MCC Board’s approval of the selection of the Philippines’ eligibility to the grant-based resources of the US MCC,” Secretary Diokno said in a statement.

The MCC provides three different kinds of grant financing: Compact, Threshold, and Regional Compact.

Specifically, a Compact Program is a multi-year agreement between the MCC and an eligible country to fund specific programs targeted at reducing poverty and stimulating economic growth.

A Threshold Program, on the other hand, is a contract between the MCC and a country that provides financial assistance to assist countries meet requirements to access large scale grants resources by becoming “compact eligible” through support for policy and institutional reforms by addressing a country’s constraints to economic growth.

Introduced in 2018, the MCC Regional Compact intends to promote cross-border economic integration, trade and collaboration and for regional integration.

The Philippines previously enjoyed the US Government’s support under the MCC’s first Compact grant of USD 434 million which concluded in 2016 and a prior threshold grant of USD 20.7 million that was implemented