The government is contemplating several features to make the ‘Marawi bonds’ attractive to investors in order to augment the massive funds necessary for the second, cash-intensive phase of the comprehensive rehabilitation plan for this city devastated by its 2017 siege by Islamic State (IS)-inspired terrorists.
Finance Secretary Carlos Dominguez III said the government will issue the Marawi bonds once the ongoing Bangon Marawi Comprehensive Rehabilitation and Recovery Program (BMCRRP) moves to the next phase of the rehabilitation plan, which involves building large-scale infrastructure projects.
National Treasurer Rosalia de Leon said that as part of the preparations for the sale of the bonds, the government has been exploring several “structures” and features to make these appealing to both institutional investors, including securing the approval to make the Marawi bonds eligible as alternative compliance to the Agri-Agra Reform Credit Act (Republic Act No. 10000), and retail bond buyers.
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.
Dominguez said the ongoing clearing operations in Marawi 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.
“When we start getting into the bigger expenditures, then we will be issuing the Marawi bonds,” Dominguez said at a recent press briefing.
He said personnel involved in 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,” Dominguez said.
De Leon said in the same press 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 last year, the Philippines received a total of P35.1 billion (about $670 million) in pledges for concessional financing and grants from the international community to aid in the rehabilitation and reconstruction efforts for Marawi.
These pledges came from the Asian Development Bank (ADB), World Bank (WB), and International Fund for Agricultural Development (IFAD); 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, USA, and private sector partners have supported relief operations and contributed humanitarian grant assistance totaling around P6.9 billion (approximately $132.4 million).