PETALING JAYA: The debt management office (DMO) has been set up to review and reduce hidden government debt and liabilities, strengthening the fiscal position of Malaysia.
As of December 2017, the government’s debts and liabilities had grown to RM1 trillion.
In a statement yesterday, the Finance Ministry (MoF) said the DMO would oversee the issuance and propose the structure of debt belonging to the government and its special-purpose vehicles as well as statutory bodies.
“The Pakatan Harapan administration intends to cut the incidence of having expensive and irresponsible debt servicing payments arising from weaknesses in debt issuance coordination.
“The DMO is among the institutional reforms carried out to strengthen the government’s fiscal position that is closely monitored by international credit rating agencies,” it added.The office would also ensure that reckless borrowing would not occur without valid reasons.
The DMO’s duties would also include scheduling bond issuances and overall borrowings by the government, statutory bodies and government-owned companies in an orderly fashion to attain the cheapest interest rates and coupon payments. “The DMO will also perform other duties such as restructuring the relevant bonds and borrowings where possible to save finance costs by reducing debt repayments and formulating strategies to reduce the government’s debt and liability burden,” the MoF said.
The formulated strategies and plans would be presented to the fiscal policy committee chaired by Prime Minister Tun Dr Mahathir Mohamad, while the DMO will be chaired by Finance Minister Lim Guan Eng.
Members of the DMO include the chief secretary to the government Datuk Seri Ismail Bakar, Treasury secretary-general Datuk Ahmad Badri, Economic Affairs Ministry secretary-general Datuk Saiful Anuar, Bank Negara governor Datuk Nor Shamsiah Mohd Yunus, and Securities Commission chairman Datuk Syed Zaid Albar.
Other members are Permodalan Nasional Bhd group chairman Tan Sri Zeti Akhtar Aziz, accountant general of Malaysia Datuk Saat Esa, PricewaterhouseCoopers Malaysia executive chairman Datuk Mohammad Faiz Azmi and the Prime Minister’s economic adviser Muhammad Abdul Khalid.