UNIT TO KEEP GOVT DEBT IN CHECK
Debt Management Office will help govt cut expensive, irresponsible debt servicing payments, says finance minister
THE government has set up the Debt Management Office (DMO) effective immediately to come up with strategies to reduce Malaysia’s financial burden and execute its plans.
Finance Minister Lim Guan Eng said the strategies and plans formulated by DMO would be presented to the Fiscal Policy Committee chaired by the prime minister.
As announced during the 2019 Budget speech on Nov 2, DMO would be set up to review and manage the government’s
debt and liabilities.
“The office will oversee the issuance and propose the structure of debt belonging to the federal government, all statutory bodies and the government’s special purpose vehicles in a holistic manner.
“The Pakatan Harapan (PH) administration intends to cut expensive and irresponsible debt servicing payments arising from weaknesses in debt issuance coordination.”
DMO, he added, was an effort by the administration to overcome and resolve the problem of hidden government debt and liabilities, which had grown in excess of RM1 trillion in 2017.
“The office is among the institutional reforms carried out to strengthen the government’s fiscal position, which is closely monitored by international credit rating agencies.”
Lim said DMO would perform the following duties: SCHEDULE bond issuance and overall borrowings by the government, statutory bodies and government-owned companies in an orderly fashion to obtain the cheapest interest rates and coupon payments;
RESTRUCTURE relevant bonds and borrowings where possible to save finance costs by reducing debt repayments; and,
FORMULATE strategies to reduce the government’s debt and liability burden.
Lim said DMO was designed to keep government debt and liabilities in check by preventing them from growing out of control, while ensuring that borrowings made without valid reasons would no longer occur.
He said Prime Minister Tun Dr Mahathir Mohamad had given his nod to the setting up of the office, which would be chaired by the finance minister.
DMO will comprise:
Chief Secretary to the Government Datuk Seri Dr Ismail Bakar;
Treasury secretary-general Datuk Ahmad Badri Mohd Zahir;
Economic Affairs Ministry secretarygeneral Datuk Saiful Anuar Lebai Hussen;
Bank Negara Governor Datuk Nor Shamsiah Mohd Yunus;
Securities Commission executive chairman Datuk Syed Zaid Albar;
Permodalan Nasional Bhd group chairman Tan Sri Dr Zeti Akhtar Aziz; Accountant-General Datuk Saat Esa; Pricewaterhousecoopers Malaysia executive chairman Datuk Mohammad Faiz Azmi; and,
Economic adviser to the Prime Minister, Dr Muhammad Abdul Khalid.