Bank of Papua New Guinea (BPNG)

Green finance discussed

The meeting focused on the intersection of green finance and climate change resilience in Papua New Guinea. These discussions highlighted the central role of the Green Finance Centre (GFC), facilitating an exchange of insights on enhancing climate resilience and green growth through financial strategies, among officials from the New Zealand Ministerial Delegation, BPNG, the Climate Change Development Authority (CCDA), and the Global Green Growth Institute (GGGI).

Export flows reduce

According to BSP’s Quarter 3 2023 Pacific Economic & Market Insights report, FX inflows have risen 19 per cent to K18.7 billion due to a 79 per cent year-on-year increase in BPNG FX intervention.

BPNG has supplied 20 per cent, that’s K3.8 billion, of PNG’s FX inflows this year.

BSP Group General Manager Treasury, Rohan George noted that despite increased BPNG intervention, the FX market continues to miss Porgera’s FX contribution.

BPNG 50 Years of Financial Leadership

The significance of this milestone traces back to the institution's establishment on November 1, 1973, when it began operations as the central bank of Papua New Guinea, under the Central Banking Act 2000.

Sir Julius Chan, who played a pivotal role in the bank's early years, marked the occasion with heartfelt congratulations.

Sir Julius, who, at the age of 34, served as the country's first Finance Minister and assumed the role of Chairman of the working group responsible for the nation's currency, fondly reminisced about the bank's inception.

FOREX provided for fuel

BPNG has committed to urgently providing the remaining FX needed for September and October, enabling Puma Energy to procure fuel on the international market.

Puma Energy, facing looming fuel shortages, had contemplated fuel rationing to safeguard essential services and infrastructure. Grappled with substantial overdue payments, the company will actively manage declining fuel stocks while awaiting the BPNG's intervention later this week.

Assessment to Give Financial Credibility

Since its last assessment in 2016, the international assessors will now see the effectiveness of the acts and laws put in place by the committee.

After two weeks of assessment, an overall evaluation will be given and recommendations will be made on how best to improve Papua New Guinea’s financial systems.

Plan launched to counter financial terrorism

The implementation of the strategic plan, is the third proposal that sets out seven objectives – a responsibility of NCC and the Technical working groups from 15 different PNG institutions. 

Top five risks Papua New Guinea faces are, Illegal logging, Illegal fishing, fraud and tax evasion among others; and this strategic plan is aiming to address this issues.

Governor for Bank of PNG, Elizabeth Genia and Secretary for the Department of Justice, Dr. Eric Kwa were present to launch the plan.

Private sector cheques to be discontinued

The NPC is comprised of senior executives from BPNG, Financial Institutions, and the Government.

Despite the improvement in clearance times to currently two (2) days, following the launch of the Kina Automated Transfer System (KATS) in 2013, cheques are still considered a higher risk for fraudulent use and cause longer processing times and inconvenience when dishonored. The government is also shifting towards electronic payments. The use of government cheques will not be affected by this decision.

Foreign exchange turnover remains unchanged

This is due to a 58 percent increase in BPNG FX intervention, according to BSP’s June Quarter 2023, Pacific Economic & Market Insights report.

“Excluding BPNG intervention, market turnover rose 12 percent in the June Quarter, but remains flat (unchanged) in 1H-2023 when compared to 1H-2022,” Rohan George, BSP’s Group General Manager for Treasury said.

He highlighted lower commodity prices as the main reason behind no growth in FX turnover. “In 2023 Palm Oil prices are down 40 percent, Oil down 20 percent, and Copper down 10 percent on 1H-2022 averages.

Fuel rationing to continue: Puma

Chairman and Managing Director of Puma Energy Papua New Guinea, Hulala Tokome in a statement said rationing will continue in order to extend security of supply for emergency services, hospitals and critical infrastructure.

Mr Tokome said without the necessary access to sufficient FX and financial services they are resorting to rationing and managing the remaining fuel stocks.

Employers warned to pay ASF

Acting Governor for Central Bank, Elizabeth Genia, said employers who commits this offence will be prosecuted by BPNG under Section 114 of the Act.

An employer is required, in respect of each employees continuously employed for three months or more, to deduct from the employee 6 percent of the base salary and 8.4 percent of the base salary from its own funds on behalf of the employee, and remit to an ASF within 14 days of the date of the calendar month as per Sections 76 and 77 of the Act.