Second MCC Philippine compact under review due to rule of law, human rights concerns

By Jenny Lei Ravelo 16 December 2016

Philippine President Rodrigo Duterte. Photo by: Prachatai / CC BY-NC-ND

The U.S. Millennium Challenge Corp. announced Thursday it has put off a decision on whether to allow the Philippines to continue developing its second compact with the bilateral aid agency at a later date. The move came amid rising concerns internationally about the Philippine government’s commitment to the rule of law and human rights.

“This decision reflects the board’s significant concerns around rule of law and civil liberties in the Philippines,” said U.S. Embassy in the Philippines spokeswoman Molly Koscina in an emailed statement to Agence France-Presse.

Koscina did not elaborate on the decision and only said that the agency will “continue to monitor unfolding events in the Philippines” while emphasizing MCC’s strict eligibility criteria, which includes a country’s “demonstrated commitment to the rule of law, due process and respect for human rights.”

The Philippines is currently in the midst of a bloody anti-drug campaign that human rights groups have linked to a rise in extrajudicial killings in the country. Over 6,000 people have reportedly been killed in Philippine President Rodrigo Duterte’s “war on drugs,” yet calls for the administration to spearhead an independent investigation of the killings have so far fallen on deaf ears.

Since assuming the presidency in June 2016, Duterte has made eliminating criminality and drugs at any cost the cornerstone of his administration. Speaking before business leaders on Monday in Manila, the outspoken Philippine leader even boasted of spearheading the killing of criminals in the city of Davao where he served as mayor for over two decades before becoming president.

He said calls for respect for human rights, including from high-profile leaders such as outgoing U.S. President Barack Obama, will not stop him from continuing his anti-drugs policy.

The White House called the latest comments “deeply troubling.”

Nothing final

Following MCC’s deferment announcement, Koscina clarified MCC has yet to decide on whether to suspend or terminate the Philippines’ compact eligibility.

“It is important to note that the Philippines compact remains only in development; no compact has been brought forward for board approval,” she told AFP. “For now, compact development will proceed,” she said referring to the MCC process for assessing a country’s development needs and designing aid packages to address them.

The Philippines’ first compact with the bilateral aid agency ended in May, but even before its conclusion, MCC already announced its interest to continue working with the Philippine government. In December 2014, the MCC board selected the Philippines as eligible for a new compact, recognizing the Southeast Asian country’s achievements in road rehabilitation and better tax collection, as well as the government’s “strong efforts at policy reform.” The board reiterated this in December 2015 when it allowed the country to continue developing its second compact.

In July, Devex met with members of the Philippines Compact Development Team in Manila to discuss their priorities for the forthcoming grant, which is expected to be around the same amount as the first compact: $434 million spread out over five years. The team identified investments in rural agriculture as a top priority, but cautioned it was still subject to consultation with other stakeholders, including members of civil society, the private sector and the Philippine government.

Sources close to the compact development process told Devex on Thursday that the second compact was slated for finalization and signing in the October or November 2017 timeframe, and there is still a chance of this happening — unless the MCC board decides to suspend its partnership with the Philippines when it meets again in March 2017.

MCC is well-known for its strict ground rules regarding compact country selection and the disbursement of aid. The agency also has a history of suspending or terminating assistance to countries with governance issues. In December 2015, the board put off a decision on Tanzania’s second compact over concerns about the conduct of elections in Zanzibar. But after seeing no significant improvements in ensuring free and fair elections, plus mounting concerns on government measures curtailing freedom of expression and association, the MCC board decided to suspend its partnership with the Tanzanian government.

The board’s deferment adds to already growing uncertainties on the future of U.S. aid in the Philippines following Duterte’s public questioning of his country’s alliance with the U.S. There is no indication the Philippine president will change course if the U.S. or other countries decrease or withdrawal aid. In an October speech before members of the Philippine National Police, he said that donors such as the U.S. and the European Union can withdraw their aid if they want to and he will not beg for it.

Whether any of that will change once U.S. President-elect Donald Trump officially takes office in January remains to be seen. The Philippine head of state has indicated he has a good rapport with the incoming U.S. leader after Trump allegedly wished him success on his campaign against drugs during a phone conversation early December.

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About the author

Jenny lei ravelo 400x400
Jenny Lei Ravelo@JennyLeiRavelo

Jenny Lei Ravelo is a Devex senior reporter based in Manila. Since 2011, she has covered a wide range of development and humanitarian aid issues, from leadership and policy changes at DfID to the logistical and security impediments faced by international and local aid responders in disaster-prone and conflict-affected countries in Africa and Asia. Her interests include global health and the analysis of aid challenges and trends in sub-Saharan Africa.


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