By Chino S. Leyco
The Department of Finance (DOF) is planning to issue the initial tranche of retail bonds in the domestic market that will fund the ongoing reconstruction and rehabilitation efforts in the devastated city of Marawi in Mindanao.
Finance Secretary Carlos G. Dominguez III (Bloomberg photo)
In a report to Finance Secretary Carlos G. Dominguez III, the Bureau of the Treasury said an initial bond issue of P13.5 billion is being eyed with P10 billion of which is allotted this year under the national budget for the Bangon Marawi Comprehensive Rehabilitation and Recovery Program (BMCRRP), and another P3.5 billion for 2019.
Deputy Treasurer Erwin Sta. Ana said that the Treasury would be using the online retail treasury bond format for the first tranche of the domestic bond issue, dubbed by Dominguez as the “Marawi Bonds Series 1.”
“As we need money later on, we will issue more bonds,” Dominguez said.
The proposed financing to fund specific projects already identified under the Bangon Marawi program includes, among other sources, $100 million from the Asian Development Bank (ADB) in the form of an Emergency Assistance Loan, $200 million from the national budget this year and the $241 million from the sale of the first tranche of the Marawi bonds for a total of $541 million.
Japan and the Philippines' other development partners have also committed to provide funding support to help implement the BMCRRP.
According to the DOF’s International Finance Group (IFG), the funding gap of $64 million would be raised through a pledging session with development partners sometime this month.
The World Bank, on the other hand, plans to pool contributions, in the form of grants, from the Philippines’ development partners under a proposed Bangon Marawi Multi-Donor Trust Fund to assist in the implementation of the Government’s BMCRRP.
The Government has also requested the World Bank to establish a Project Monitoring Unit (PMU) under the Task Force Bangon Marawi (TFBM) to monitor the implementation status of all programs, projects, and activities identified in the BMCRRP.
To date, the DOF has requested all implementing agencies to submit status reports on all programs, projects, and activities they are handling to determine financing gaps.
Status reports, including the agencies' respective budget allocations for 2018 and 2019 to support the implementation of such projects, will serve as preliminary data to be turned over to the proposed PMU.
The DOF will also convene a follow-up interagency technical working group meeting to finalize the list of projects under the BMCRRP and to identify current policy and implementation concerns.
The tenor of the Marawi bonds would depend on market conditions, Dominguez said.
He said the bonds would appeal to patriotic citizens who would like to help rebuild the lives of their fellow Filipinos in the war-torn city.