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MANILA - The Millennium Challenge Corp. on Friday said it wants more private sector participation in development projects - from the design of the loan program to project execution - so that the Philippines can enjoy inclusive growth.
In his speech before members of the Makati Business Club and the Management Association of the Philippines, Daniel W. Yohannes, MCC chief executive, said the US agency is interested in what the private sector has to say.
"In the designing of a second compact, we want the private sector involved," Yohannes said, adding that there are many avenues where the MCC and businesses can work together.
MCC provides 25 partner-countries with funds through compacts and threshold programs. Compacts are made of large, five-year grants that pass MCC’s eligibility criteria, while threshold programs are made up of smaller grants "awarded to countries that come close to passing these criteria and are firmly committed to improving their policy performance."
The Philippines has received $434 million in total grant value two years ago for the Kalahi-CIDSS project ($120 million), the Bureau of Internal Revenue tax administration reform program ($54.3 million) and the Secondary National Roads Development Project ($214.44 million).
Yohannes said the MCC will continue to support the Philippines until such time the country has achieved growth rates of 8-10 percent, a level that would allow the lowest in the economic pyramid to feel the trickle-down effect of such progress.
That said, MCC is not closing its doors to the possibility of a second compact for the Philippines. "Who knows what will happen in three years?" Yohannes said.
Finance Secretary Cesar V. Purisima said the Philippine government is also open to this suggestion of having the private sector contribute to the MCC projects, especially under Public-Private Partnership ventures.
"As you know the Aquino administration believes in PPP. So this would be a good opportunity to tap the skills of the private sector," Purisima told reporters on the sidelines of the MBC-MAP forum.
"The way it works is they have specific grants already. It's not like PPP project where you will put in money. The nice thing about what they're doing - for example, the Samar Road project - they will create the road, that in itself will be fully funded," Eduardo Francisco, BDO Capital Investment Corp. president.
"The private sector, in anticipation, you can build more businesses. You set up more factories, restaurants, hotels. What we will do is we will educate the business side to take advantage of that. Capacity and resource building," he added.
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