The chairman of the House of Representatives’s Committee on Banks and Financial Intermediaries on Wednesday backed the government’s plan of tapping the bond market to finance the reconstruction of Marawi City.
Rep. Ben P. Evardone of the Lone District Eastern Samar, the panel chairman, said the national government should pursue the issuance of bonds to generate funds for the rehabilitation of Marawi City.
“Economic managers should tap the bond market to finance the reconstruction of Marawi,” Evardone told reporters.
“The Bureau of Treasury should pursue the issuance of a P50-billion ‘Marawi Bond’ considering the low interest rates prevailing in the market. It should also capitalize on the outpouring sympathy of investors to the victims of the Marawi siege,” he added.
By tapping the bond market to finance Marawi’s reconstruction, the lawmaker said this will free up a huge part of the regular budget for government’s other social and infrastructure programs.
Earlier, Budget Secretary Benjamin E. Diokno said the national government is eyeing to issue P30 billion in bonds to help Marawi City.
“As far as Marawi bonds are concerned, it is a go already. The plan is to start next year or in January,” Diokno said.
According to Diokno, the rehabilitation of the city would be prioritized, saying the government would allocate P15 billion to Marawi City in the next two years.
He also added the tax settlement paid by Mighty Corp. and Philippine Airlines would be used to finance the rehabilitation of the war-torn city.
Last week President Duterte declared Marawi’s liberation from Maute terrorists, who occupied the Islamic city on May 23. The Islamic State of Iraq and the Levant-inspired fighters reportedly numbered about 1,000.
Meanwhile, Rep. Frederick W. Siao of the Lone District of Iligan City said the rehabilitation of Marawi can also be funded through issuance of “Islamic bonds” through the lone Islamic bank, the Al Amanah Islamic Investment Bank of the Philippines (Al Amanah).
“As an investor myself and member of the House Committee on Mindanao Affairs, I recommend for the government to work together with Al Amanah in developing a so-called sukuk or Islamic financial certificate that complies with sharia laws. The Department of Finance [DOF] through the Bureau of Treasury, shall be the issuer, and Al Amanah shall be the marketer,” he said in a statement.
“Issuance of sukuk will enable us to tap funds from the 57 member-countries of the Organization of Islamic Cooperation,” he added.
Recently, the lawmaker said Qatar Investment Authority announced that it has at least $320 billion worth of excess funds, which may be used for energy projects in the Philippines and Southeast Asia.
“Chairman and CEO of Al Amanah Alex Bangola said the Philippines can access those billions of dollars of funds from Qatar through the issuance of sukuk,” he added.
The lawmaker, quoting Bangola, said: “Sukuk can be compared with government bonds, only that these financial papers do not follow the Western banking concept of riba, or interest. Under Islamic banking, a holder of a sukuk means he or she holds ownership in the investment, and the bank becomes a business partner.”
While supporting the government’s plan to issue “Marawi bonds,” Siao said the move can be complemented by the issuance of sukuk in order to give “our Muslim allies throughout the world an opportunity to help rebuild the Islamic trading city of Marawi.”
“The P30-billion worth of debt securities that DOF proposed might just be not enough compared with the magnitude of work that has to be done,” he added.
“The P30 billion is enough only for some key structures, but insufficient to implement a master plan, not just for Marawi but also the surrounding towns, the Lake Lanao area, and to integrate them with Mindanao and the Visayas,” Siao added.
Image credits: AP Photo/Bullit Marquez