The issuance of the planned P50-billion reconstruction bond by the state-owned National Development Co. (NDC) may no longer be a priority as the fund would now serve as a standby credit line that government agencies and local government units may tap, if necessary, for the reconstruction of infrastructure damaged by the recent typhoons.

This was the gist of NDC general manager Ma. Lourdes Rebueno when asked on the details of the planned bond float following the issuance by Malacañang of Executive Order 824-A.

This also developed after the Finance Secretary Margarito Teves has declared that the government will tap fund sources that would be least cost for the government. Various multilateral funding institutions including World Bank and Asian Development Bank have already pledged to help in the reconstruction efforts.

Despite this development, Rebueno said they are preparing for the bond float anyway.

“We will go through the process of necessary approvals from the Department of Finance and the Monetary Board so that, if necessary, then we will issue the bonds,” Rebueno said.

“This is like a credit line that we can draw that’s why should be ready,” Rebueno added.

Issuance of the bonds would be conducted in tranches and not in one whole sweep as what DTI Secretary Peter B. Favila said earlier. It should also be based on projects that have been coordinated with the Reconstruction Commission.

Projects from any government instrumentalities for reconstruction purposes and of local government units would be the direct users of the Reconstruction Bond.

There are no guidelines yet but initial details point to a five to 10-year maturity period for the bond and at rates that would enable a reasonable margin for NDC.

Rebueno, however, said there are no projects yet that have been identified nor are there government entities or LGUs that have expressed interest to tap the fund.

Projects that may be funded by the bond float may not be limited to Metro Manila because there are also infrastructures in other provinces in Luzon that have been destroyed by the recent typhoons.

Originally, the P50-billion NDC bond float under EO 824 signed by Malacanang in August this year was intended as the government’s counterpart to the private sector proposal for a P100 billion special public-private sector economic stimulus fund following the global financial crisis.