Philippine President Rodrigo Duterte's government has opted out of a major US development aid programme that requires recipients to support democracy and fight corruption, the two countries said today.
Duterte spokesman Harry Roque said Manila decided against negotiating a second "compact" with the Millennium Challenge Corporation (MCC), which provided USD 433.9 million for Philippine anti-poverty projects in 2010.
"We have opted to withdraw from the second Millennium Challenge," Roque told reporters.
The Millennium Challenge, created by the US Congress in 2004, supports with large-scale grants poor countries that are committed to good governance and economic freedom, believing these to be key to fighting poverty.
"The government of the Philippines has decided not to move forward with the development of a second MCC compact," US embassy spokeswoman Molly Koscina told AFP.
The MCC announced in December 2015 that the Philippines was eligible to develop a second multi-year programme for US funding.
However the US embassy announced a year later that the corporation had decided to withhold a vote on a second agreement with the Philippines, citing "significant concerns" about the rule of law under Duterte.
The setback followed a worsening of ties with then- President Barack Obama, who criticised Duterte's drugs crackdown that has claimed thousands of lives and sparked concerns of a crime against humanity.
Duterte has angrily rejected US, European Union and United Nations criticism of his drug war, accusing them of interference in the country's domestic affairs. He also vowed to reject any foreign aid which imposes conditions on recipient government.
Roque said Manila's immediate priorities revolve around rebuilding the southern city of Marawi, which was destroyed in five months of fighting with Islamic militants this year that left more than 1,100 people dead.
"The decision to withdraw was because of the urgent priority of the administration to rebuild Marawi," he said, adding: "I don't think the rebuilding of Marawi qualified" for agency funding.
The spokesman said any MCC project funding would have required matching funds from Manila.
Roque denied that Manila's decision to decline the aid was linked to Duterte's allegations of foreign interference.
"No, not at all," he said.
The corporation said on its website that it has invested more than USD 13 billion worldwide to support anti-corruption projects, as well as land rights, agriculture, education, energy, health, transportation and water supply.
The first Philippine compact was used for projects to reduce tax evasion, for building roads and for small-scale projects designed to improve the lives of the rural poor.
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