Bank of Papua New Guinea (BPNG)

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.

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.

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.

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.

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.

The request, made under its Extended Credit Facility and Extended Fund Facility, will run from March 2023 to March 2026.

The program is for budget support to assist the Government to pursue fiscal consolidation in the medium term and undertake critical reforms to help improve the performance of the economy.

This funding is tied to conditions and reforms that PNG is required to meet, defined as structural benchmarks and quantitative targets under the program to trigger drawdowns over the period.

According to the Bank of Papua New Guinea Monetary Policy for March 2023, the deficit will be financed from domestic sources totaling K1,465.7 million and external financing of K3,519.2 million.

Of the net domestic financing, K525.7 million will be from new Treasury bill and K945.0 million from Treasury bond issuances, more than offsetting loan repayments of K5.0 million.

“Access to financial products and services must not only be broad, but also meaningful in a sense that it opens up opportunities for the Papua New Guineans to move up in life,” said BPNG’s Acting Assistant Governor, FSSG, George Awap, at the launching of the third National Financial Inclusion Strategy (NFIS3) 2023-2027.

Awap said that while deposit account ownership grew over the last 10 years from the launch of the first NFIS in 2014, to a level of 3.7 million, an estimated 5 million remain unreached by the formal financial system.

Implementing the strategy is the Centre for Excellence in Financial Inclusion (CEFI) in collaboration with the Central Bank (BPNG) and the Department of Treasury.

CEFI is the mandated organization implementing the National Financial Inclusion Policy 2019 since the first NFIS 2013-2015. Thereafter, its success followed with the second NFIS 2016- 2020.

He was honoured to launch the 3rd National Financial Inclusion Strategy 2023-2027 at this great event, stating the importance of Financial Inclusion in the country.

“We (the government) believe that financial inclusion is key to integrating the unbanked into the formal economy, which helps to alleviate poverty, make the poor less vulnerable to financial shocks, reduces economic inequality and raises living standards for all,” said the Chief Secretary.