THE PHILIPPINES has secured a $60-million (around P3.7-billion) grant from the US Millennium Challenge Corp. (MCC) to support reforms aimed at improving energy security, electricity sector governance, and the investment climate, the Department of Finance (DoF) said.

In a statement on Thursday, the Finance department said the country was selected for the MCC Threshold Program, which helps countries address key policy and institutional constraints to economic growth.

“The approval of the $60-million MCC Threshold Program affirms the Philippines’ commitment to good governance, transparency, and sound economic management,” Finance Secretary Frederick D. Go said.

“It reflects the confidence of our international partners in the reforms we are pursuing to strengthen institutions, improve the ease of doing business, and create more opportunities for Filipinos,” he added.

The DoF was designated as the lead agency for engagement with the MCC and will work with relevant government agencies to develop and implement the program.

The grant will support the Energy Development Governance Efficiency project, which seeks to improve governance and operational efficiency in the country’s electricity sector.

The initiatives are expected to reduce delays in project implementation, improve the reliability of electricity supply, and encourage greater private investment in the sector.

“This grant comes at an opportune time and provides a significant boost to our efforts to strengthen the country’s energy security,” Mr. Go said.

“We thank the MCC for its continued partnership with the Philippines as we pursue reforms that deliver more reliable services, attract greater private investment, and sustain faster, more inclusive economic growth,” he added.

The MCC Board approved the program on June 24 to help the Philippine government address the high cost and unreliability of electricity.

“The approval of the Philippines Threshold Program reflects the strength of the US-Philippines partnership and our shared commitment to expanded economic opportunity and mutual prosperity,” US Deputy Secretary of State Christopher Landau said in a June 25 statement.

“By strengthening energy security, this program will help unlock US private sector investment and support lasting, broad-based growth across the Philippines,” he added.

The Philippines qualified for the Threshold Program after meeting the MCC’s scorecard standards on economic freedom, ruling justly, and investing in people.

Jose Enrique “Sonny” A. Africa, executive director of the think tank IBON Foundation, said that the grant could help improve regulatory processes but is unlikely to significantly strengthen long-term economic resilience without broader structural reforms.

“It might support incremental improvements but is unlikely to have a transformative impact on the country’s long-term economic resilience or investment climate,” he told BusinessWorld.

Mr. Africa said the country’s vulnerability to energy shocks stems more from its reliance on private investment and market incentives than from regulatory bottlenecks.

He said reforms should instead focus on making state-owned energy firms dominant in power generation, transmission and distribution, citing countries such as Vietnam, Indonesia, Thailand and Malaysia.

The MCC is an independent US foreign assistance agency that provides time-limited grants to support reforms that promote economic growth, reduce poverty, and strengthen public institutions.

Over the past two decades, the MCC has invested more than $17 billion across 76 programs in partner countries. — J.I.D.Tabile