THE GOVERNMENT plans to sell 20-year bonds in “early January” to raise up to P30 billion to help rebuild war-torn Marawi City, the state Budget chief said yesterday.
“As far as the Marawi bond is concerned, it’s a go already. The plan is to start next year early January, so it’s a go,” Budget Secretary Benjamin E. Diokno said in a press briefing in Manila City when asked by reporters about financing the city’s reconstruction.
Conflict in Marawi City is about to complete its fifth month since militants aligned with the Islamic State dug in against government forces initially sent on May 23 to arrest their leader, Isnilon Hapilon, who was killed earlier this week.
Finance Secretary Carlos G. Dominguez III had said in August that the plan involved raising as much as P30 billion through “patriotic” bonds that could have a 20-year tenor.
National Treasurer Rosalia V. De Leon, however, told reporters after the government bond auction yesterday that the “sweet spot” may involve debt papers maturing in “five to seven years.”
A day after President Rodrigo R. Duterte declared the city “liberated from the terrorists,” Ms. De Leon said: “We’re waiting for the needs assessment.”
“We’re pleased that the conflict is over and we can start the rehabilitation,” she said.
“We’ll just have to find out what the total requirements will be before we’ll be able to do the issuance,” she added.
“In the meantime, we’re working on the Agri-Agra eligibility of the bonds so that will trigger stronger demand for the bonds, given that it would be a substitute for compliance” she explained, referring to the requirement under Republic Act No. 10000, or the Agri-Agra Reform Credit Act of 2009, for banks to earmark a certain portion of their loans to farms, fisheries or agrarian reform — or to invest in bonds certified as alternatives by the Agriculture department’s Agriculture Credit Policy Council.
More than 1,000 people, mostly rebels, have been killed in the battle for Marawi that rages on.
The heart of the city of 200,000 people has been decimated by near-daily air strikes by planes and helicopters.
Proceeds from the so-called “patriotic bonds” will help augment funds that the government has set aside for Marawi, such as P5 billion from this year’s budget and P10 billion next year, Mr. Diokno said, adding that military, education, social welfare, health and other government officials yesterday began Marawi’s needs assessment.
He added that the government may come out with a final rehabilitation and funding plan by the end of this month.
Mr. Duterte has said it will cost more than P50 billion to rebuild the city.
Defense Sec. Delfin N. Lorenzana has said that rehabilitation could start in January, as structures were unstable and parts of the city were still littered with unexploded munitions and home-made bombs.
Mr. Diokno said that the Executive may ask for a supplemental budget from Congress if the damage assessment exceeds expectations. That may come from the tax liability and unpaid fee settlement of P30 billion and P6 billion from Mighty Corp. and Philippine Airlines, respectively, on top of donations received from Japan and China as well as international humanitarian organizations.
Philippine state economic managers meeting with World Bank officials in Washington D.C. last week sought technical assistance from the multilateral lender, given its expertise in post-conflict rehabilitation. — Elijah Joseph C. Tubayan with Reuters