Public debt up 4.4 per cent to reach $1.09 billion

The country’s total public debt for the March quarter this year increased by 4.4 per cent on a year-on-year basis to reach nearly $1.09 billion, new economic data shows. 

The total amount outstanding comprises public external debt totalling $1.08 million and public domestic debt of $9.5 million, the Ministry of Finance Quarterly Public Debt Bulletin for March 2020 reported. 

“Total public debt increased by 1.4 per cent and by 4.4 per cent when compared to December 2019 and March 2019 quarters respectively,” the report said. 

“Continuous disbursement for external loan funded [programme] and depreciation of tala against all the loan currencies were the main contributors to the increases.” 

According to the report, the country’s main creditors are the E.X.I.M. Bank of the People’s Republic of China [which holds 36.1 per cent of total debt], the International Development Association [29.4 per cent] and the Asian Development Bank [22.3 per cent]. 

Other creditors include the Japan International Cooperation Agency [8.5 per cent] and the Organisation of the Petroleum Exporting Countries Fund [2.1 per cent]. 

The country also has outstanding loans worth less than 1 per cent of its total debt obligations to the Unit Trust of Samoa [U.T.O.S.]; the International Fund for Agriculture Development, the European Investment Bank; the Samoa Life Assurance Corporation; and the Samoa National Provident Fund.

Of the total national borrowings of $1.09 billion 55 per cent is owed to multilateral creditors and 45 per cent to bi-lateral creditors. 

“The outstanding amount increased by 4.6 per cent and by 2.1 per cent when compared to December 2019 and March 2019 quarters respectively,” the report states. 

“There [were no new loans added…] during the quarter.” 

Public domestic debt, totalling $9.5 million decreased by 16.2 per cent and by 43.1 per cent when compared to December 2019 and March 2019 quarters respectively. 

“The composition of public domestic debts by instrument was 97.7 per cent ($9.3 million) [in] Government loans and 2.1 per cent ($200,000) [in] Government [bonds],” the Ministry found. 

Total debt service obligations for this year’s March quarter reached $30 million, the Ministry said - an amount divided between external ($27.9 million) and domestic debts ($2.1 million). 

The amount spent on servicing debts for the quarter increased by 95.6 per cent and by 17.4 per cent when compared to December 2019 and March 2019 quarter. 

Total Government guarantees and outstanding on-lending reached $164 million by the end of the last quarter. 

That amount increased by 7.2 per cent when compared to December 2019 and decreased by 0.6  per cent when compared to the March 2019 quarter. 

“The amount increased by 0.8 per cent and by 4.6 per cent when compared to December 2019 quarter and March 2019 quarters respectively,” the report said. 

“Total Government guarantees outstanding at the end of March 2020 [reached] $162.2 million.” 

The Ministry noted the increase in total guarantees was mainly due to the final disbursement of a loan from U.T.O.S. to Polynesian Airline Limited, the holding company for Samoa Airways.

“The Government on-lent to [the Development Bank of Samoa] (1.2 per cent) U.T.O.S. (2.4 per cent) [the Samoa Submarine Cable Company]. (30.5 per cent) and [the Electric Power Corporation] (65.8 per cent),” the report states.

(On-lending involves borrowing money from one entity and passing it onto another). 

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