Marawi rehab’s total fund requirement: 86.5 billion pesos

DAVAO CITY (MindaNews / 20 August) — The total funding requirement for the rehabilitation, recovery and reconstruction of Marawi City is 86.5 billion pesos, inclusive of 20 billion pesos for compensation for those who lost their homes or commercial establishments in the country’s lone Islamic city during the five-month siege last year.

Housing Secretary Eduardo del Rosario, chair of the Task Force Bangon Marawi (TFBM), announced the total funding requirement at the 8th All-Agency Meeting held August 16 in Makati City.

The total amount covers five aspects of the rehabilitation efforts in Marawi, expected to be completed by end of 2021: 47.1 billion pesos for the Bangon Marawi Comprehensive Rehabilitation and Recovery Program (BMCRRP) which covers areas outside Ground Zero; 20.05 billion as compensation fund; 17.2 billion for the rehabilitation of Ground Zero or the Most Affected Area (MAA); 1.2 billion pesos for livelihood assistance; and 882 million pesos for the rebuilding of mosques.

From a Powerpoint presentation at the 8th All-Agency meeting of the Task Force Bangon Marawi on 16 August 2018 in Makati City.

The Department of Finance (DOF) will take the lead in the pledging sessions for the Bangon Marawi Multi-Donor Trust Fund (BM-MDTF)  in “October or early November” and in preparation, technical meetings will be conducted “early to mid of September.”

The BM-MDTF, according to the Powerpoint presentation on “Updates from the Development Partners’ Meeting” is “a platform and partnership for the GPH (government)  and international cooperation to support the implementation of rehabilitation and recovery of Marawi City and surrounding areas.”

The BM-MDTF “will support the TFBM to increase harmonization and coordination on the provision of assistance by development partners.”

The TFBM also identified three windows / mechanisms for the BM-MDTF: Window 1, TFBM support; Window 2, Technical Assistance and Advisory Services; and Window 3, Investment Grants.

The TFBM met with development partners on August 10 and 13.

MAA rehab, Compensation

The funding requirement for the 250-hectare, 24-barangay Ground Zero, the former main battle area between government forces and the Islamic State-inspired Maute Group and its allies, is placed at 17.2 billion pesos but at the press briefing in Malacanang on August 17, a day after the TFBM’s All-Agency Meeting, del Rosario told reporters the proposed amount is “about 16.8 billion” but he expects this to go lower as negotiations are still ongoing.

He said the first proponent, Bagong Marawi Consortium, initially proposed 21.8 billion pesos but it went down to 15.7 billion pesos during the negotiations. The TFBM’s Selection Committee, however, declared an unsuccessful negotiation, citing legal and technical issues, among others.

The negotiation with the second proponent – PowerChina – is expected to be completed by August 24 and subjected to Swiss Challenge from August 24 to September 14 for the components that would need a joint venture agreement. Awarding is targeted for September 17 and groundbreaking on September 19.

The 20.05 billion compensation is based on House Bill 07711 or the
“Marawi Siege Victims Compensation Act of 2018” filed by Lanao del Sur Representative Ansaruddin Adiong on May 16, 2018, to compensate for the loss or destruction of residential houses and commercial buildings in Ground Zero / MAA and Greater Marawi Area.

What remains of what used to be the homes or shops of residents in Marawi’s Ground Zero on 08 May 2018. MIndaNews photo by CAROLYN O. ARGUILLAS

The bill proposes that 20 billion pesos be allocated as the “Compensation Trust Fund” which shall be “under the custody of the (Marawi Compensation) Board and shall be included in the annual General Appropriations Act.”

The additional 50 million pesos which will be included also in the GAA, will be the operational budget for the initial operations of the Marawi Compensation Board.

According to the bill, any person who is a “lawful owner of residential house/s or commercial building/s or both, located in the Main Affected Area and Greater Marawi Area, and destroyed or damaged either totally or partially on the occasion of the Marawi siege may file a claim with the Board for monetary compensation.”

Eleven other representatives, including Lanao del Sur Rep. Mauyag Papandayan, Jr.  and Maguindanao 2nd district Rep. Sajid Mangudadatu, later signed up to be co-authors.

The bill was referred to the Committee on Appropriations on May 23, 2018, exactly a year to the day the Marawi Siege began. Its status is still pending at the committee level.

10 billion for 2018

Of the estimated 86.5 billion cost of the rehabilitation project, the government has allocated 10 billion for 2018, coursed through the National Disaster Risk Reduction and Management Council (NDRRMC), leaving 76.5 billion pesos that would require funding.

On July 16, Finance Secretary Carlos Dominguez said government was working on a funding mix for P52 billion of what he said was P62-billion budget for the Marawi rehabilitation efforts.

Dominguez said the P62 billion cost was based on the report of del Rosario, and minus the 10 billion pesos allocated for 2018, would leave 52 billion pesos awaiting funding.

“Now that we have a hard number, we will now go to the details on where the money will come from. Certain portions of the money will come from grants,” Dominguez was quoted in a DOF press release.

“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 then.

He explained that funding “will come in terms of grants from outside and also from domestic (sources).”

Marawi bonds

He said his department was planning on the timing of the issuance of the Marawi bonds to generate additional funds and that it would issue these in several tranches.

Dominguez said they might issue it as retail treasury bonds “so that people will really feel that they are participating in the rebuilding of Marawi City.”

“We will issue it definitely in tranches because we should not borrow more than what we need for that year… We already have P10 billion already budgeted so we will go and get more details on how much is actually required and at what dates,” he said.

He said the issuance of the bonds might be P10 billion a year “with the government probably “end(ing) up raising maybe P40 billion of the P62 billion.”

MindaNews sent a message to del Rosario seeking clarification on the 86.5 billion total cost presented in the August 16 meeting and the 62 billion cost mentioned by Dominguez on July 16. It is likely that the 20 billion compensation fund was added to last month’s 62 billion peso estimate.

As of 5 p.m. Monday, del Rosario had not sent his reply.

Of the 10 billion peso allocation coursed through the NDRRMC for 2018, only 2.207 billion pesos have been issued Special Special Allotment Release Orders as of August 15, according to the TFBM.

The 10 billion peso fund is for the BMCRRP projects, not for the rehabilitation of Ground Zero.

In the proposed  General Appropriations Act for 2019, 3.5 billion pesos out of the 20 billion allocation for the NDRRMC, is for Marawi rehabilitation, Surigao del Sur Rep. Johnny Pimentel, a member of the Committee on Appropriations said in a press release on August 5.

“On top of the P3.5 billion, government is also spending another P1.3 billion to support the activation of the Philippine Army’s 55th Engineering Brigade, for the purpose of aiding in the restoration of Marawi,” Pimentel added. (Carolyn O. Arguillas)