The government is exploring structures and features that will make the planned issuance of Marawi bonds more appealing to investors, the Department of Finance said Thursday.
Finance Secretary Carlos Dominguez III said in a statement the government would soon issue the so-called Marawi bonds to raise additional funds for the large-scale reconstruction and rehabilitation of war-torn Marawi City in Mindanao.
Dominguez said the government was considering several features to make the ‘Marawi bonds’ attractive to investors to augment the massive funds required for the comprehensive rehabilitation of the city devastated by its 2017 siege by Islamic State-inspired terrorists.
Dominguez said the government would issue the Marawi bonds once the ongoing Bangon Marawi Comprehensive Rehabilitation and Recovery Program moves to the next phase of the rehabilitation plan, which involves building large-scale infrastructure projects.
National Treasurer Rosalia de Leon said as part of the preparations for the sale of the bonds, the government aimed to make the bonds 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, and retail bond buyers.
The law allows banks to invest in government-listed priority programs a portion of their investible funds as loans for farmers, fisherfolk and other agriculture-based workers.
Dominguez said the clearing operations in Marawi as well as the provision of housing and basic services such as water to residents were being funded by allocations in the national budget.
“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 were finding unexploded ordnance as they go about their task.
“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 the government would have to “calibrate” the amount of Marawi bonds to 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.
The Philippines in November last year received 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.
The pledges came from the Asian Development Bank, World Bank, International Fund for Agricultural Development; and the governments of Japan, China and Spain.