The Mindanao Development Authority (MinDA) is proposing for the tapping of Sukuk Bonds, bonds that comply with Islamic laws, to fund key programs of the government, especially those to be implemented in Mindanao.
MinDA deputy executive director Romeo M. Montenegro said last week that the agency has submitted before the economic cluster of President Rodrigo R. Duterte’s cabinet the proposal in tapping the bonds for evaluation.
“We hope we can tap this kind of funding so that key programs in Mindanao will attract Islamic countries (to fund them),” said Montenegro, adding that this will also help the national government lure more Islamic investors to consider Mindanao for their capital.
He added that this will also help the island embark on massive development initiatives because more funding entities will be able to assist it especially if the Bangsamoro Basic Law (BBL) is eventually passed.
“We need more assistance from outside fund sources to help the government ease its burden in making Mindanao progressive,” he explained.
The Philippines started contemplating of tapping the Sukuk market during the first days of Mr. Duterte’s administration, but the move has not taken off. “We hope that we are able to tap this huge fund market this time,” said Montenegro, adding that what the government would consider is come up with a financial system that will focus on the bonds.
Sukuk Bonds, unlike the regular bonds, do not earn interests but earn fixed amounts based on the Shar’ia, or Islamic laws. Interests are prohibited by Shar’ia.
Montenegro said the tapping of the bond will also be timely as Congress is in the thick of the debates for the passage of the BBL, a law that will put flesh to the agreement between the government and the Moro Islamic Liberation Front (MILF).
The government and the revolutionary movement signed an agreement in 2014 and when Mr. Duterte assumed the presidency in 2016, he revived the BBL which failed to get the nod of government during the time of then President Benigno Simeon C. Aquino III.
At present, both Houses of Congress are still discussing how they could harmonize their respective versions of the law so that it can be signed before Mr. Duterte makes his state-of-the-nation address next week.