DAVAO CITY—The rehabilitation of battle-flattened Marawi City would now cost as much as P62 billion in more than five years, a recent estimate from an evaluation conducted by the Task Force Bangon Marawi (TBFM) showed.
Finance Secretary Carlos G. Dominguez III said the government would now start to strategize on raising the amount—from government budget allocation annually, official development assistance in the form of grants, and to a year-on-year floating of so-called Marawi bonds in the market.
A DOF news statement issued on Monday, quoting a report from the task force, said TFBM Chairman Eduardo del Rosario has revised the estimated cost of reconstruction to reach P62 billion.
Two months earlier in May, the DOF has estimated a lower cost of around P55 billion, and has identified then the National Disaster Risk Reduction and Management Project Fund to shoulder half of that costing.
Dominguez said the government “is currently working on the funding mix for P52 billion of the five-year P62-billion budget for the rehabilitation and reconstruction of the devastated city of Marawi.”
He said some P10 billion was already allocated in this year’s General Appropriation Act for the Marawi rehabilitation program “hence the need to explore ways on how to finance the additional P52 billion.”
“Now that we have a hard number, we will now go to the details on where the money will come from. Certain portions of the money will come from grants,” Dominguez told a news briefing on Monday.
Japan and China were among the various countries that have committed to provide grants to aid in the reconstruction of Marawi City.
Japan had earlier signed a ¥2-billion assistance in May this year for the Marawi rehabilitation, its fourth financial grant since last year that already amounted to a total $36 million for Marawi’s relief and rehabilitation.
Dominguez, who signed the grant agreement on behalf of the Philippine government, said the fourth package was approximately $18.66 million or about P970 million. Three previous Japan grants formalized on November 12 last year between the two governments included the provision of heavy equipment for Marawi City’s reconstruction.
Yoshio Wada, chief representative in the Philippines of the Japan International Cooperation Agency signed the fourth aid package on behalf of Japan.
The DOF said the Grant Agreement for the Programme for the Support for the Rehabilitation and Reconstruction of Marawi City and Its Surrounding Areas covered infrastructure projects.
Dominguez said the Philippine government has identified 902 priority projects and activities, as drawn up by the Bangon Marawi Comprehensive Rehabilitation and Recovery Plan and approved in early-April.
“This [financing requirement spans] over five years. This is not immediate so it’s over five years and there is a progression, the total is P62 billion. So we will have to do now our financial planning,” Dominguez said.
The rehabilitation budget, the finance chief said, would cover the use of heavy equipment and the plan by the government to acquire certain properties in the area.
Dominguez said some portions of the budget would come in the form of grants from outside and also from domestic sources.
Also, some of the funding requirement may be sourced from floating security bonds and Dominguez said the DOF was planning on the timing of its issuance. He said the DOF was thinking of issuing the bonds in several tranches.
“We would issue it definitely in tranches because we should not borrow more than what we need for that year. We have P10 billion already budgeted so we would go and get more details on how much is actually required and at what dates,” Dominguez said.
The government might issue the Marawi bonds as retail Treasury bonds “so that people will really feel that they are participating in the rebuilding of Marawi City,” he added.
The tenor of the bonds would depend on market conditions and the issuance might be P10 billion a year, with the government “probably ending up raising maybe P40 billion of the P62 billion total rehabilitation cost,” Dominguez added.
The finance chief earlier ordered the Bureau of the Treasury to study the issuance of the debt securities. He said the bonds would appeal to those citizens who would like to help rebuild the lives of their fellow Filipinos in the war-torn city. With Rea Cu