The Philippines and the United States have signed a $60-million (about P3.68 billion) Millennium Challenge Corp. (MCC) Threshold Program Grant Agreement to support energy sector reforms, improve power affordability and reliability, and attract more investment, the Department of Finance said Thursday.

Finance Secretary Frederick Go and US Ambassador to the Philippines Lee Lipton formally signed the agreement on 10 September at the Luzon Economic Corridor (LEC) Investment Forum.

“Our partnership is not only to respond to challenges, it’s about building the foundation for long-term security and prosperity together,” said Lipton.

Vital part

“Energy security is a vital part of the effort. The United States is proud to work alongside the Philippine government and the private sector to strengthen the institutions and governance that underpin the resilient energy sector,” he added.

The Millennium Challenge Corporation (MCC) is an independent US government agency that provides large-scale grants to selected developing countries to reduce poverty through economic growth, good governance and economic reform.

A Threshold Program Grant Agreement is the legal agreement through which MCC provides targeted grant assistance to a country that is not yet eligible for a full MCC Compact, typically to address policy or institutional weaknesses and help it qualify for future MCC funding.

Help address policy, institutional gaps  in energy sector

Go said the grant would help address policy and institutional gaps in the energy sector and strengthen its foundations. The Finance chief also announced the European Union and Spain as the newest backers of the LEC, joining the US, Japan and six other nations.

“We are working towards tangible results, better infrastructure, stronger connectivity, more investment, more jobs, greater opportunities for the Filipino people,” he said.

Strengthen Phl’s MCC Compact eligibility

The DoF said the four-year-and-nine-month program is intended to strengthen the Philippines’ eligibility for a future MCC Compact, a larger grant program that supports major economic development projects and policy reforms.

The grant will fund the Energy Development Governance Efficiency  Project, which will be implemented by the Department of Energy, Energy Regulatory Commission, National Electrification Administration and National Power Corp.