Finance Secretary Juanita Amatong said over the weekend that a technical assistance grant of about $600,000 was under negotiations.
Amatong did not identify the possible source until the transaction has been concluded.
The Peace Fund, officially known as the Multi-Donor Trust Fund (MTDF) for Mindanao, was the brainchild of former Finance Secretary Jose Isidro Camacho who wanted the donor community to dole out grants that would finance development projects in Mindanao.
According to Amatong, however, the donor community wanted to conduct a needs assessment first in order to find out exactly what would be required by the war-torn areas of Mindanao in the unlikely event that the conflict is resolved within this lifetime.
Amatong told reporters that the concern of both the government and the donor community was to avoid duplication in the projects and programs already being implemented considering that resources were scarce.
Initially, Amatong said the programs would be rationalized and the use of the Peace Fund would be based on needs that would emerge out of the assessment.
She said a number of bilateral donors already have on-going programs in Mindanao, especially Japan which has already begged off from contributing to the Peace Fund.
The US has decided not to participate in the creation of the fund which is being spearheaded by the World Bank.
The US decision follows that of Japan which earlier decided it would not contribute to the MDTF since it already had significant and well-funded livelihood and development projects in Mindanao.
Amatong told reporters that MDTF would continue to be led by the WB even without the participation of the US and Japan. She said other bilateral donors have already pledged to contribute.
The US Agency for International Development (USAID) had originally considered providing part of the initial funding for the $50-million grant facility intended for development projects in the war-torn areas of Mindanao.
The USAID already has a $20-million facility originally intended for the specific purpose of assisting the demobilization and reintegration of the MILF.