Heroes Hall, Malacañan Palace
24 May 2016

The Government of the Philippines, led by President Benigno S. Aquino III, formally closed its first anti-poverty compact with the United States of America in a ceremony held at the Heroes Hall of Malacañan Palace.

The five-year US$434 million grant was signed on 23 September 2010 between the Philippine government’s accountable entity, Millennium Challenge Account – Philippines (MCA-P) and the United States Government’s Millennium Challenge Corporation (MCC). It entered into force on 25 May 2011.

The grant was used for the rehabilitation of a 222-kilometer road and the construction or fixing of 21 bridges in Samar and Eastern Samar, two of the poorest provinces in the country identified by the MCC. As a result, travel time had been reduced from five hours to only 30 minutes from one town to the other, as well as lowering the transport fare.

Also, the Compact promoted community-driven development by empowering community people in the Department of Social Welfare and Development’s Kapit-Bisig Laban sa Kahirapan-Comprehensive and Integrated Delivery of Social Services (KALAHI-CIDSS), constructing priority infrastructure projects in poor barangays in the provinces, modernizing the country’s tax revenue system through the Department of Finance’s Revenue Administration Reform Project (RARP) that received US$79.42 million in funding, and weeding out corruption in the government’s revenue-generating agencies.

“Tax collections have never been more efficient. For example, in 2012, we breached the 1-trillion peso mark for the first time. Collections from the arrears management program have also drastically increased: from 2.3 billion pesos in 2013 to 8.4 billion pesos in 2015. All this has led to increased fiscal space for our administration and even our successors: apart from the good practices we started, more funds can now be used for projects and programs that will benefit Filipinos,” President Aquino said in his keynote address.

In December 2014, the Philippines was selected by the MCC to develop proposals for a second compact in recognition of the “significant progress achieved under the current compact and its strong efforts at policy reform, including successful efforts to root out corruption.” This decision of the MCC was considered unprecedented since the country still had two years to close the first compact.

“This gathering takes on a special meaning for me: it has, in a way, allowed me to come full circle. We signed the MCC compact a few months after I took my oath of office; we witness its end today, as my own covenant with our people is coming to an end,” the President concluded.

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