Gov’t may use portion of Mighty, PAL payments for Marawi rehab

The Duterte administration may set aside a portion of the government’s revenue windfall from homegrown cigarette-maker Mighty Corp. and flag-carrier Philippine Airlines (PAL) to rehabilitate strife-torn Marawi City.

In a briefing, Budget Secretary Benjamin E. Diokno said yesterday that President Rodrigo R. Duterte may draw from the R36-billion revenues the government received from its recent settlements with the two privately owned companies.

The Department of Budget and Management (DBM) has earmarked R10 billion next year to finance the rehabilitation projects in Marawi City, which is on top of the initial R5 billion it plans to spend this year to build temporary schools and shelters.

Diokno is now saying that the Duterte administration may also seek for additional funds from Congress in 2018 to further boost the funds of Marawi’s rehabilitation.

“For next year we already set aside R10-billion budget and if additional funds are necessary we might file supplemental budget,” Diokno told reporters.

“As you know we have gotten R30 billion from Mighty and R6 billion from PAL so that’s can be a funding source for supplemental budget next year if it’s absolutely necessary,” he added.

The Department of Finance (DOF) earlier accepted the R25-billion tax settlement offer of Bulacan-based Mighty, which represented the cigarette manufacturer’s tax deficiencies.

Based on the DOF’s estimates, the total amount the government would be getting from the tax settlement — the largest ever from a single taxpayer in the country's history — is beyond R25 billion and could reach over R30 billion with the value-added tax and other fees.

Another source of funding for Marawi City is the the Department of Transportation’s (DOTr) R6-billion settlement with PAL, which covered the country’s flag carrier’s unpaid navigational fees and other liabilities to the government.

Diokno also said that the national government will borrow from the local market through the sale of the so-called “Marawi bond” in early January next year, while the World Bank committed to provide technical aid and other forms of assistance to the Philippines.

The budget chief further added the government will complete its multi-year rehabilitation plan for Marawi by the end of this month, which will be followed by its financing program.

“My position has always been financing follows the plan, this afternoon there will be a meeting of the military chaired by [Defense] Secretary [Delfin] Lorenzana. Pending the plan I cannot commit to a specific amount,” Diokno said.

In July, Diokno said the national government may require more than R20 billion for the rehabilitation and reconstruction of the war-torn city in Southern Philippines.

According to Diokno, the Duterte administration plans to transform Marawi into a modern city, adding the Department of Public Works and Highways (DPWH) would soon come up with a comprehensive master plan to map out their program.

President Duterte earlier ordered the creation of Task Force Bangon Marawi to implement rehabilitation and reconstruction of Marawi.

Funds could also be sourced from the respective budgets of different agencies such as Department of Social Welfare and Development (DSWD), DPWH, Armed Forces of the Philippines Engineering Brigade, and foreign donors.

China already donated R15 million for Marawi rehabilitation to boost the resources of Department of Health and DSWD.

For the National Disaster Risk Reduction and Management 2018 budget, about R25.5 billion has been allocated, R10 billion of that amount has been earmarked for the Marawi Recovery and Rehabilitation program.

Under the 2018 proposed national budget, R310 million has also been allocated for 12 infrastructure projects under Autonomous Region in Muslim Mindanao and Regional DPWH.