Philippines may issue reconstruction bonds - Arroyo

MANILA, Oct 14 - The Philippines plans to raise funds from an issue of reconstruction bonds, as well as from foreign loans and grants, to rebuild typhoon-hit provinces, President Gloria Macapagal Arroyo said on Wednesday.

Manila is considering market borrowing as a last option to fund rebuilding efforts, Arroyo told an investors' briefing.

She did not indicate how much Manila wants to raise from the reconstruction bonds to be issued by the National Development Corp., the state development agency.

"We may issue reconstruction bonds, whether peso or dollar, to which the multilaterals such as the World Bank and the ADB may subscribe to," Arroyo said.

"Commercial borrowings either through bonds or other instruments should be the last financing option," she said.

The reconstruction financing plans will be studied by a private-public sector commission to be headed by Finance Secretary Margarito Teves, Manuel Pangilinan, who is chairman of the country's most valuable listed firm PLDT <TEL.PS>, and Cardinal Jose Vidal.

The group will also hold an international pledging session possibly in November with the help of the World Bank and the United Nations to raise grants and aid from the foreign donor community to fund rebuilding efforts.

Disaster agencies said at least 650 people have died and nearly 5 billion pesos ($107.9 million) worth of infrastructure was destroyed by floods and landslides due to heavy rains brought by two typhoons which hit northern Philippines in a span of two weeks.

About 18.4 billion pesos in crops and fisheries were lost due to the typhoons, one of which hit the country's main rice-producing areas. The damage to rice output amounted to nearly 13 percent of the country's projected fourth quarter harvest.