MANILA, Philippines — The government should consider floating tapping the Islamic banking system and float bonds to help raise funds to rebuilt war-shattered Marawi City, a lawmaker said.
Representative Frederick Siao of Iligan City, less than 40 kilometers from Marawi, said the government can work with the Islamic Investment Bank of the Philippines (Al Amanah) to develop “sukuk,” or Islamic financial certificates, that comply with sharia laws.
Issuing sukuk will not only augment the budget for Marawi’s reconstruction but also allow the Philippines to tap the 57-member countries of the Organization of Islamic Cooperation, he said.
Quoting Al Amanah chair and chief executive officer of Alex Bangola, Siao’s statement said the sukuk can be compared to government bonds, except these financial papers do not adhere to the Western concept of riba or interest.
Siao, who is a member of the House of Representatives’ committee on Mindanao affairs, pointed out that the Qatar Investment Authority recently announced that it has at least $320 billion in excess funds that may be used for energy projects in the Philippines and Southeast Asia.
“I am aware of the Department of Finance’s plan to issue ‘Marawi bonds’ on January 2018. I support that move and I believe that can be complemented by the issuance of sukuk that I am suggesting in order to give our Muslim allies throughout the world an opportunity to help rebuild the Islamic trading city of Marawi,” Siao said.
“We do not want band aid solutions. We want a total solution to the economic, social, and political woes that are root causes of the discontent in Marawi and western Mindanao,” Siao said.
Under Siao’s proposal, the Department of Finance, through the Bureau of Treasury, shall be the issuer of the bonds and Al Amanah the marketer.
The Iligan lawmaker said the P30 billion worth of debt securities the DOF intends to issue would not be enough for the needed reconstruction and rehabilitation of Marawi.
“The P30 billion is enough only for some key structures but insufficient to implement a master plan not just for Marawi but also the surrounding towns, the Lake Lanao area, and to integrate them with Mindanao and the Visayas,” he said.