His Excellency Benigno S. Aquino III
President of the Philippines
At the Millennium Challenge Corporation Compact Signing Ceremony
[September 23, 2010, The Hilton Room, The Waldorf Astoria, New York City]
[Please check against delivery]
“A Compact for Innovation”
The Road to Fighting Poverty and Corruption
Secretary Hillary Rodham Clinton,
Your Excellencies and members of the diplomatic corps,
Members of my Cabinet,
State Assistant Secretary Dr. Kurt Campbell,
Officers and Staff the Philippine Embassy and Consulate General,
Members of the Philippine Business Delegation,
Special guests and friends,
Ladies and gentlemen,
Tonight, on behalf of the Filipino people, I am bearing witness to formal approval of a $434 million grant to the Philippines to help our fight against poverty and corruption. This is no ordinary aid agreement.
In the Presidential Palace in Manila, there is a painting titled the Blood Compact. It portrays the first treaty of friendship between a Filipino ruler and the representative of a foreign power. It is only fitting that tonight, we are bearing witness to a modern kind of compact. A solemn agreement, a covenant,that binds two entities in a common objective.
Our common objective, our shared aspiration, is for poverty to be banished, and for development and prosperity to take its place. The American people, and their government, have put forward the financial means for developing nations to accelerate their development.
And yet as Ben Franklin reminds us, God helps those who help themselves. All the aid, all the assistance in the world, would be meaningless if it ended up stolen or misspent.
We share the same view: a key to unlocking the potential for growth and prosperity among nations is good and honest governance. If the American people, through their government, can commit resources to their friends, their friends owe it to those pledging assistance, and to themselves, to be worthy stewards of what they will receive.
For this reason the Philippine Compact proposal had undergone a rigorous development and multi-stakeholder consultative processes from the time the Philippines was introduced into the Millennium Challenge Account (MCA) Threshold Program (TP) by the MCC five years ago, up to the time that the country was selected “Compact eligible” from 2008 to 2010.
The Philippine Compact went through four (4) Congressional Notifications (CNs), countless MCC missions to the Philippines, and a “legislative concern” on the Philippines’ Compact eligibility due to income reclassification from a low-income country (LIC) to a lower middle-income country (LMIC) in 2010.
This agreement was made possible by Filipinos and Americans working together to give us the tools to finish the job of fighting poverty.
I commend Foreign Affairs Secretary Alberto Romulo, together with Ambassador Willy Gaa, and Finance Secretary Cesar Purisima, who first led the development of the Philippine Threshold Program (PTP) in 2005 as then Secretary of Trade and Industry, and who is now responsible for the lead oversight in implementing the Compact for the next five years, under an accountable entity called the Millennium Challenge Account-Philippines (MCA-P).
On the American side, there are the former members of the MCC Board and their staff: Lorne Craner, President of the International Republic Institute (IRI); Ken Hackett, President of Catholic Relief Services (CRS); former private sector member and Managing Director of Greycroft LLC, Alan Patricof; and USAID Chief Operating Officer Alonzo Fulgham who also served as Acting USAID Administrator. We appreciate your invaluable contributions.
We acknowledge, as well, the efforts of previous MCC CEOs – Ambassador John Danilovich, Rodney Bent and Darius Mans for their exemplary efforts, as well as to the talented MCC Philippine Transaction Team, led by Deputy Vice President Darius Teter and Country Director Troy Wray.
There are, of course, Secretary Clinton, a true friend of the Philippines, and the members of the MCC Board – Treasury Secretary Timothy Geithner, U.S. Trade Representative Ambassador Ron Kirk, USAID Administrator Rajiv Shah, MCC CEO Daniel Yohannes, and private sector member, former Senator William Frist – all of you have made possible this vote of confidence in the Philippines.
The MCC Board of Directors has praised this Compact for its creativity, innovation and relevance.
Each of the three (3) projects in the Compact has integrated several key components to combat corruption:
- The Revenue Administration Reform Project or RARP (US$54.3 million) directly targets improvements in governance or “internal integrity” within the Bureau of Internal Revenue (BIR).
- The Kapit-Bisig Laban sa Kahirapan (“Linking Arms Against Poverty”)-Comprehensive and Integrated Delivery of Social Services or Kalahi-CIDSS (US$120 million) is designed to ensure that resources are provided to communities directly where they are needed most, and enforces transparency and accountability for local development investments.
- The Secondary National Roads Project (222 kilometer road segment in Samar/Eastern Samar; US$214.4 million) introduces a number of checks on construction standards and road contractors.
These are the Compact projects that, in the words of MCC executives, demonstrates my country’s “high capacity” as MCC partner.
As I conveyed during my teleconference with Mr. Yohannes last August 9, we will do our part to use this grant wisely.
We will continue the Revenue Integrity Protection Service (RIPS) or “lifestyle checks” program.
We will ensure that the Policy Improvement Process (PIP) Plan of Action will be implemented, in parallel with the Compact projects, to effectively address performance issues such as Control of Corruption (COC). We are currently refining our indicators for the Performance Governance System (PGS) which was already introduced in six (6) national government agencies (education, health, public works, transportation, internal revenue and the police).
We will revive the Philippine Development Forum (PDF) this year so that the Philippines will remain on track when it comes to our 2015 Millennium Development Goals (MDGs) targets, especially in meeting targets in primary education and health services delivery.
My visit to the United States has, as a key objective, to inform investors that the Philippines is open for business. Not the under the table kind, but the legitimate kind; not the kind of business that thrives in corrupt dealmaking, but which thrives because of sensible, enforceable, and fair contracts. I have come, with my economic team, to share with our American friends the possibilities for doing business in my country, either through Build-Operate-and-Transfer (BOT) schemes or Corporate Social Responsibility (CSR) programs.
But first and foremost I am here to assure you that the Philippines is committed to good housekeeping practices in its domestic and international dealings with investors. We are committed not just to a fair, but a square, deal for all. We will not abandon the poor to the markets just as we will not distort markets by means of red tape or crony impositions.
Tonight, we bear witness to a partnership for development. A partnership built on good faith. We have paid our dues, you have given your pledge. We are in this together: which is only fitting, since we are two nations bound by a shared commitment to the same ideals of life, liberty, and the pursuit of happiness.
Good evening and Mabuhay!
 Breakdown on the Philippine Compact Funding:
Table 1. Philippine Compact (Millions of US$)
|1. Revenue Administration Reform Project (RARP)||54.30|
|2. Kapitbisig-Laban sa Kahirapan – Comprehensive and Integrated Delivery of Social Services (KALAHI-CIDSS)||120.00|
|3. Secondary National Roads Development (SNRD) Program||214.44|
|4. Monitoring and Evaluation||8.26|
|5. Compact Administration and Oversight||36.91|