The government will push through with its planned Marawi bonds issuance once the second phase of the Bangon Marawi Comprehensive Rehabilitation and Recovery Program (BMCRRP) that involves the construction of large-scale infrastructure projects in the war-torn area is implemented, the Department of Finance (DOF) said on Thursday.
In a news statement, Finance Secretary Carlos G. Dominguez III also said that the ongoing clearing operations in Marawi City, as well as the provision of housing and basic services such as water to its residents, are currently being funded by allocations in the national budget, which are currently sufficient to fulfill such requirements at present.
“When we start getting into the bigger expenditures, then we will be issuing the Marawi bonds,” Dominguez said.
The finance chief pointed out that personnel involved in the clearing operations continue to find unexploded ordnance as they go about their task, which is why work has been proceeding at a “careful” pace.
“But there has been a lot of work, especially in providing housing and water and sewage disposal facilities for the residents in that area already. So, fortunately, we’ve been able to fund it from the GAA [General Appropriations Act], and when we get to the real big construction projects, that’s when we will be issuing the bonds,” he added.
National Treasurer Rosalia V. de Leon said the government has been exploring several structures to make the Marawi bond float more attractive to both institutional investors and retail bond buyers, which include securing the approval to make the Marawi bonds eligible as alternative compliance to the Agri-Agra Reform Credit Act, or Republic Act (RA) 10000.
RA 10000 allows banks to invest in government-listed priority programs a portion of their investible funds mandated to be set aside as loans for farmers, fisherfolk and other agriculture-based workers.
She said during a news briefing that the government would have to calibrate the amount of Marawi bonds that would be issued based on the financing requirements needed for the implementation of the rehabilitation program.
“In preparation for that, we’ve also been doing some features, including the Agri-Agra eligibility that we have secured, to make the bonds more attractive. In fact, there are also some structures that we are also considering to make it more attractive to retail investors,” de Leon said.
In November 2018, the Philippines received a total of P35.1 billion, or about $670 million, in pledges for concessional financing and grants from the international community to aid in the rehabilitation and reconstruction efforts for the war-devastated Marawi City.
The pledges came from the Asian Development Bank, World Bank and International Fund for Agricultural Development; and the governments of Japan, China and Spain.
The United Nations (UN) and the governments of the United States, Australia, China, Germany, Japan, Korea and Spain also extended aid in the form of technical assistance and preparatory support needed to ensure the implementation of the BMCRRP.
Also, the UN and its specialized agencies, as well as the governments of Australia, Italy, Japan, Korea, the United States, and private-sector partners have supported relief operations and contributed humanitarian grant assistance totaling around P6.9 billion, or approximately $132.4 million, according to the DOF.
In December 2018, the DOF said that in line with complementing the pledges, the government’s planned issuance of Marawi bonds is being further studied by the Bureau of the Treasury (BTr) as to when the exact timing of the issuance would be implemented.
Dominguez also confirmed that the bonds will be issued in tranches and would depend on the BTr’s judgment on when to best place them on the market, the bond offer is around P13.5 billion, or about $258 million.
President Duterte issued Administrative Order 3 creating the Task Force Bangon Marawi to oversee the reconstruction and rehabilitation efforts for the war-torn city.
Image credits: AP/Aaron Favila