MANILA, Philippines — The Department of Finance (DOF) may start issuing the first tranche of its planned Marawi bonds next year, Finance Secretary Carlos G. Dominguez III said Tuesday night on the sidelines of the Philippine Airlines’ roll-out of its new Airbus A350 and A321neo.
“The target is beginning of next year because we already have a budget for this year,” Dominguez told reporters.
Dominguez said it took a while because the government was still determining the final amount needed for the five-year rehabilitation of war-torn Marawi.
“We will do it. We just finally got the hard number, it’s P62 billion. We we’re looking for that number so we will issue the Marawi bonds,” he said.
The finance department is eyeing to float about P40 billion worth of bonds for the five-year rehabilitation of Marawi City, which was left in shambles after a war between the Maute group and government troops erupted in May last year.
Dominguez said that the overall cost of rehabilitating Marawi City would reach P62 billion.
The bond offer would be issued in tranches and would depend on the market at that time. It may be roughly P10 billion a year.
“Probably we will end up raising maybe P40 billion of the P62 billion,” he said.
He said this would be done over five years.
Dominguez said around P10 billion of the total budget for the Marawi rehabilitation program was already included in the General Appropriation Act of the government this year, hence the need to explore ways on how to finance the additional P52 billion.
Japan and China were among the various countries that have committed to provide grants to aid in the reconstruction of Marawi City.
“This is 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.
Dominguez said the rehabilitation budget would cover the use of heavy equipment and the plan by the government to acquire certain properties in the area.
“Some (portions) of (the budget), I said, will come in terms of grants from outside and also from domestic (sources),” Dominguez said.
He 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.”
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 floated last year the idea of issuing the bonds to help finance the rehabilitation of Marawi City.
He earlier ordered the Bureau of the Treasury (BTr) to study the issuance of the debt securities. He said the bonds would appeal to citizens who would like to help rebuild the lives of their fellow Filipinos in the war-torn city.