COMMENTARY: Who will pay for the reconstruction and rehabilitation of Marawi?

ILIGAN CITY (MindaNews / 19 September) — The Filipino People  — those living today and yet to be born  — will be helping the reconstruction of Marawi by helping government pay the loans for its rehabilitation

I heard and read citizens and netizens hate the Maute militants. I heard of no less than President Duterte blaming the Meranaos for allowing the militants in Marawi. Whether we hate the militants or blame the Meranaos, the fact is a large part of Marawi is severely destroyed and badly needs rehabilitation.

I heard friends asking: Who is responsible for the destruction of Marawi City? The answer could be divisive but what I’m sure is that the Armed Forces of the Philippines (AFP) dropped tons of bombs into the City and the militants destroyed homes to create escape routes and defensive positions. There is no doubt that these actions contributed to the destruction of the Islamic City. The next question is: who will shoulder the cost of the reconstruction and rehabilitation of Marawi?

When I asked this question in one of the discussions I had with friends, the resounding answer was: the government.

I said, NO! And my friends said, then who?

Of course, we, the sovereign Filipino people, imploring the aid of Almighty God, will be shouldering the cost of reconstruction of Marawi. Our taxes were definitely used to buy the bombs that were dropped in Marawi; our taxes will also be used for the reconstruction and rehabilitation of Marawi.

Filipinos from the Babuyan Islands in the north and the Turtle Islands in the south; the residents of Forbes Park and the Badjaos on the street, will be contributing for the rehabilitation of Marawi. We will be doing this indirectly through our direct and indirect taxes.

To liberate Marawi, the government spent billions of pesos and I believe, it drained government coffers resulting to widening budget deficit as reported by the Department of Budget.

In a report in late July, Budget Secretary Benjamin Diokno said the budget deficit during the first six months was also higher than the P143.8 billion programmed by the government for the period. It could be higher because the expenses of the Marawi war – covering only two months of the period – was not programmed. We could then expect a higher deficit for the second six months.

He further noted that this is not worrying because the target year-end deficit is P482.1 billion. ( 2017/07/25/1721074/budget-deficit-widens-p154.5-b-h1)

Will that target deficit be realistic given the massive spending for the war in Marawi? If government is in deficit, how could it raise the 20 Billion pesos needed for the Marawi rehabilitation as earmarked by the President? If the government is in deficit now, how could it feed the tens of thousands of internally displaced people (IDPs) who are complaining that the government support is fast dwindling.

As usually practiced by government, three options are the most convenient: raising taxes, reducing spending and borrowing from both international and domestic lenders. The first one is almost a done deal as Congress has already passed new tax laws but taxes cannot immediately meet needed money. Reducing spending is hard to do for the current year, it can be done for the next fiscal year. If spending for the year is reduced, will that include the spending for the relief goods and services of IDPs?

The third one is about to happen. The World Bank (WB) and the Asian Development Bank (ADB) has already expressed their interest to extend much needed grants and loans for the Marawi rehabilitation. The Philippine Daily Inquirer (Aug. 28, 2017) in its report entitled “ADB, World Bank to be lead coordinators in Marawi rehabilitation” cited Socio-economic Planning Secretary and National Economic Development Authority Director-General Ernesto Pernia as saying that Manila-based ADB and the Washington-based World Bank were looking into technical assistance grants for the rehabilitation of Marawi once fighting ends on top of a possible emergency loan to be extended by the latter.

The NEDA chief said the World Bank was also “looking at an emergency reconstruction and development loan, an additional emergency loan,” which he said could be prepared in four to five months.

The above report seems to be a twist of the story of the 20 Billion rehabilitation fund that the government is earmarking which the Task Force Bangon Marawi (TFBM) has also declared to be the available funds from Government.

Interestingly, the Secretary of the Department of Budget and Management (DBM) sometime in July had said that the rehabilitation fund was to be sourced from the unspent funds of so-called “slow project’s implying that it will be taken from allocations of unfinished projects. (…/funds-from-slow-projects-to-be-us…)

In the Budgeting process for 2018, there is no clear allocation for Marawi Rehabilation. However, there is a suggestion to include 10 Billion pesos as specific allocation. The amount is certainly miniscule compared to the actual need for the rehabilitation. In fact, Senator Ralph Recto was asking both the House and Senate if the amount was enough considering that Marawi was providing Mindanao with “knowledge and power” through the Mindanao State University (MSU) and the Lake Lanao Hydro-electric plant.

Perhaps the reason for the meager proposed allocation of P10 billion is the availability of funds from loans from the World Bank and the ADB. Most likely there are more interested lenders if there is a good prospect for profit.

Why then is the interest of these lenders?

Of course, these are sovereign loans that is granted to be paid so long as a government of the people, by the people and for the people exists in the Philippines. But it is not as simple as that. WB and ADB are likely willing to provide grants and loan if the government has something to offer. In most cases, large, secured and economically potential areas for investments. This is something that the government has in Marawi and in neighboring areas.

Foremost of all, the government has an existing Camp Keithley Military Reservation in Marawi, Saguiaran, Piagapo and Marantao to the tune of at least 4,000 hectares. This area was designated as Camp Keithley by the US Army in 1905 and was officially declared by President Theodore Roosevelt through Executive Order No. 693 signed on September 26, 1907 covering 6,910 hectares. After the Philippines gained its independence in 1946, the reservation along with the Camp Overton Military Reservation and the Momungan Military Reservation were turned over by the US Government to the Philippine Government through an Exchange of Notes that took effect on March 27, 1949. In 1953, President Elpidio Quirino retained the Camp Keithley Military Reservation through Proclamation No. 453 with a lesser area of 6,667 hectares. Part of the reservation then became the MSU Campus and the Agus II and Agus I complex.

It is interesting to note that the Camp Overton military reservation in Iligan City became the National Steel Corporation complex that includes the present heavily populated areas of Barangay Suares and Maria Cristina.

It is then more interesting to note of what happened to the Molungan Military Reservation (MMR) that was designated in 1915 through Presidential Executive Order No. 2136 signed by US President Woodrow Wilson.

The case of the MMR is very important because part or the whole reservation was already declared as the Momungan Agricultural Colony in 1913. If it was declared as a reservation in 1915 and was turned-over to the Philippines as a military reservation in 1949, it is then very important to determine how the government classified the MMR after its turn-over. Was it returned to the original owners? Was it ultimately distributed to the colonists and the later residents? Was it considered public land? Or it remain classified as a military reservation?

In the case of the Marawi rehabilitation, it is very important to note that when multilateral international lending institutions appear on the scene, the national government always has an asset to be subjected for economic development. These “national assets” include military reservations and public lands that may be occupied by residents since time immemorial. These assets can serve as some kind of collateral with the government commitment to develop these areas into productive economic zones.

Whatever is the commitment of the national government to the potential lenders, what is certain is that all Filipino citizens – living today and those who are yet to be born – will be responsible for paying those loans including its interests. In such way, all Filipinos will be contributing for the rehabilitation and hopefully, the development and peace of Marawi. (MindaViews is the opinion section of MindaNews. Carino Rey Antequisa is a development worker working as a freelance consultant based in Iligan City. He worked with both international and local NGO’s. He was the former Chair of the Board of the Davao-based Mindanao Peacebuilding Institute)