P13.5 billion eyed in initial bond float for Marawi rehab

November 6, 2018

The Department of Finance (DOF) said Tuesday it would float P13.5 billion (about $241 million) worth of retail bonds in its initial offering in the domestic market to raise funds for the reconstruction and rehabilitation of Marawi.

The initial tender would be backed by an initiative of the World Bank to pool contributions from the development partners of the Philippines in the form of grants, alongside the request of the Philippine government that the World Bank help establish a project monitoring unit in Marawi City.

The Department of Finance said the Bureau of the Treasury (BTr) reported to Finance Secretary Carlos Dominguez III that the initial bond issue would have an appropriations cover of the same amount based on the national budget for the Bangon Marawi Comprehensive Rehabilitation and Recovery Program (BMCRRP).

The tenor of the Marawi bonds would depend on market conditions, Dominguez said.

Government appropriated P10 billion for the reconstruction of the city after it was ravaged late last year in the course of retaking it from the Islamic State-linked Maute and Abu Sayyaf group .

The BTr said the budget this year would get an addition of P3.5 billion, the amount allotted for the 2019 budget.

The DOF quoted Deputy Treasurer Erwin Sta. Ana as saying during a recent DOF Executive Committee (Execom) meeting that the BTr “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 of specific projects identified under the Bangon  Marawi  program “includes, among other sources, $100 million (P5.44 billion)  from the Asian Development Bank (ADB) in the form of an Emergency Assistance Loan, $200 million (P10 billion)  from the national budget this year and the $241 million (P13.5 billion) from the sale of the first tranche of the Marawi bonds for a total of $541 million”.

The DOF said 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 (P3.45 billion) would be raised through a pledging session with development partners sometime in November.

The World Bank planned 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 DOF said the Philippine 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.

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 said it would 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. DMS