Bond issue to fund Marawi rehab expected to raise P50-60 billion

THE government is hoping to raise P50-60 billion from retail Treasury bonds (RTB) next month to fund the rehabilitation of Marawi City, Task Force Bangon Marawi (TFBM) said Thursday.
In a news conference in Makati City, TFBM chair Eduardo D. del Rosario said the government intends to raise around P50-60 billion through a retail Treasury bond offering which is scheduled for next month.
“The issuance of Marawi bonds… will be launched by next month. We intend to raise maybe P50-60 billion from these Marawi bonds,” Mr. Del Rosario said.
He added the final issue size will ultimately depend on “the Bureau of the Treasury (BTr) and the Department of Finance, who will determine how much will be needed.”
In a text message yesterday, National Treasurer Rosalia V. de Leon said the bonds are still “subject to [approximation]” and an evaluation of market appetite.
Ms. De Leon said last month that the Treasury has obtained the necessary approvals for the planned issue at an indicative volume of P50-60 billion, but the timing has yet to be determined.
She added that the RTB offer will be done online.
However, National Home Mortgage Finance Corp. President Felixberto U. Bustos, Jr. said the Marawi bonds will likely be issued in either late October or early November as the fund-raising activity will need to be marketed next month.
“Next month is marketing. I think [the issuance will happen] in either late October or early November. But we want to do it before the end of the year,” Mr. Bustos told reporters following the news conference.
Mr. Del Rosario added that the proceeds of the bond offer will supplement the funds allocated by the government as well as pledges and development assistance from other countries and private firms.
Mr. Del Rosario estimated the overall cost of the city’s rehabilitation at about P62.2 billion, with P47.2 billion going to locations outside the most affected area of the city and an additional P15 billion for the so-called “ground zero” where fighting to retake the city from terrorists was most intense.
The estimate was lower than the P86.5 billion previously provided. This includes government-led construction outside the most affected area, rebuilding of ground zero under a public-private partnership as well as livelihood assistance.
Meanwhile, Mr. Del Rosario, who also chairs the Housing and Urban Development Coordinating Council, said the council is planning to build 6,400 temporary shelters as well as 3,400-3,500 permanent units for residents affected by the siege, although construction of the permanent housing cannot start as transactions with lot owners are yet to be finalized.
“The main challenge now in Marawi is the availability of permanent lots that we can purchase. We cannot start the construction of permanent housing because we need about 40 hectares of land,” he said.
“I hope that within October, we can finalize the transactions and negotiations with some lot owners and start with the site development by November.”
In May 2017, Marawi City was taken over by the Islamic State-inspired Maute group, displacing a total of 115,880 families. The city was recaptured by government forces on Oct. 23, or five months after.
The groundbreaking on the rehabilitation is expected to take place in late September or early October, depending on the schedule of President Rodrigo R. Duterte, Mr. Del Rosario noted. — Karl Angelo N. Vidal