(STAR) By Paolo Romero - Stung by criticism of the government’s efforts to curb corruption and promote good governance, a Malacañang official said yesterday Washington and the US foreign aid arm, the Millennium Challenge Corp. (MCC), should first look at their own backyard.

The official, who spoke on condition of anonymity, said, “How can they lecture us on good governance when due to their sloppy regulatory work, the financial markets collapsed, requiring $4 trillion in bailout money and triggering a global economic slowdown?”

The MCC has put on hold economic assistance to the Philippines unless the government curbs corruption, saying the country remains eligible for huge development grants from the US state-funded corporation.

“How can they speak of transparency when the very lack of it caused the collapse of Wall Street icons, including two public housing mortgage agencies?” the source said.

“Should we fear a Washington backlash should we step back from the MCC? No. Because the present board will no longer be there in the first week of January. But don’t get me wrong, we should save the MCC deal, but let us get better terms,” the official said.

The collapse of the US financial system happened ironically during the watch of US Treasury Secretary Henry Paulson, who is also MCC vice chairman, the official noted.

The official also questioned the practice of the MCC to tap the service of expensive consultants to do the same work that can be easily done by Filipinos.

He added that the MCC assistance is a tied grant where the government must also put up huge counterpart funding.

“Besides, to be selected for MCC funding is not a badge of honor. There is nothing prestigious in being lumped together with countries that are at the bottom rungs of any governance indicators,” the source said.

The official said with the government’s improving revenue stream, it could finance its own anti-corruption campaigns “as any self-respecting country should.”

‘Gov’t continues to fight corruption’

Executive Secretary Eduardo Ermita and Deputy Presidential Spokesperson Lorelei Fajardo, in separate statements, maintained the government continues to pursue efforts to stop corruption in the country.

Ermita said he sought clarification from United States Ambassador to the Philippines Kristie Kenney, who said that based on the official statement of the MCC, the country has actually been “re-selected” for eligibility for the Millennium Challenge Account (MCA) Compact program.

The MCA was put up by US President George W. Bush as an incentive for good governance among developing nations.

In 2006, the Philippines obtained a $21 million grant from the MCC’s Threshold Program to combat corruption.

The Arroyo administration provided counterpart funds to the grant even it was not required by the MCC to show the government’s resolve in fighting corruption, officials said.

Under the Compact program, the country may get anywhere from $60 million to $700 million in grants, Palace officials said.

During a meeting with President Arroyo in Washington D.C. last June, MCC President John Danilovich said the corporation was ready to grant the Philippines higher aid to fight poverty and corruption, but it would greatly depend on the soundness of the government’s proposal for additional grants.

Fajardo said the government has not been remiss in fighting corruption.

She pointed out that the President, as early as 2007, doubled the budget of the Office of the Ombudsman and implemented measures to cut red tape and impose penalties on corrupt officials.

Senators blame Palace

But senators blamed the Palace for the MCC’s decision to withhold economic assistance to the Philippines for its failure to curb corruption and institute social and economic reforms.

Sen. Richard Gordon called on the Arroyo administration to conduct an immediate performance review among government agencies mandated to fight corruption as the country continues to receive negative assessment on the matter.

Gordon, chairman of the Senate committee on accountability of public officers and investigations (Blue Ribbon), made the call after the Philippines fared poorly in the MCC scorecard on control of corruption, respect for civil liberties, and the rule of law, political and economic freedom, education and health.

In 2006, the Philippines was selected to join the MCC’s threshold program and was given $21 million to help fight corruption. The country could have been eligible for large-scale grants had it not failed in the control of corruption scorecard.

Sen. Pia Cayetano said “the absence of transparency and accountability in government dealings, compounded by the Arroyo administration’s practice to stonewall every investigation on the numerous scandals involving its top officials, have eroded not only the people’s trust in their leaders, but also our good standing before the international community.”

Cayetano stressed that aside from failing the “control of corruption” criterion (47 percent), the Arroyo government reportedly also failed to score above the median in 14 out of 17 indicators used by the MCC to measure a country’s performance and eligibility to receive aid.

She said the government also registered very low scores in health expenditures (19 percent) and primary education (32 percent).

The MCC’s assessment showed that from a 76 percent grade for “control of corruption” in fiscal year 2007, it declined to 57 percent for fiscal year 2008, and fell to 47 percent for FY2009.

The Philippines was also far from the passing grade in health expenditures (19 percent) and primary education (32 percent) in the MCC FY2009 report.

In a related development, the United Opposition (UNO) said the US government has finally realized that the Arroyo administration is the most corrupt in modern history.

Lawyer Adel Tamano, UNO spokesman, lauded the MCC’s decision to withhold economic aid to the Philippines.

Tamano said the Filipino people must stand against Arroyo’s Charter change to enable the country to make drastic changes in government.

UNO president and Makati City Mayor Jejomar Binay said the decision of MCC only underscored that the long-known fact that “corruption under President Arroyo has again robbed millions of Filipinos of services they deserve as taxpayers.” – With Christina Mendez, Jose Rodel Clapano

Chief News Editor: Sol Jose Vanzi

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