Cambodian Debt Stands at $9.81b

In the last three months, Cambodia paid $183 million in foreign debt, with total debt standing at $9.81 billion. However, authorities remain unconcerned, claiming funds are being funneled into investment and development.
A person walks near the Ministry of Economy and Finance in Phnom Penh, August 2, 2022. Kiripost/Siv Channa
A person walks near the Ministry of Economy and Finance in Phnom Penh, August 2, 2022. Kiripost/Siv Channa

Figures have revealed that in the last three months, Cambodia paid back $183 million in foreign debt, with total debt remaining at $9.81 billion.

Cambodia has been continuing to work hard to manage its debt and is being transparent about the situation. The Ministry of Economy and Finance (MEF) indicated that the report relates to revenue and expenditure, and indicates a clear purpose in borrowing, said Meas Sok Sen San, MEF spokesman, at a press conference at the Office of the Council of Ministers (OCM) on Tuesday.

“Cambodia's victory is that we do not borrow to spend, we borrow for investment. This is important in the five conditions in the loan.” said the spokesman.

He added that in the government's decision to borrow money from foreign countries, the ministry complied with the terms and sought approval from the National Assembly.

The International Monetary Fund (IMF) has acknowledged that Cambodia is under a worry-free loan line, with Cambodia's lending status hovering at about 33 to 35 percent in 2021.

“We should not pass 40 percent of implementation, and whoever speaks, not the Ministry of Economy itself, the speaker, is IMF, including other international institutions,” San explained.

Chheng Kimlong, vice president and business researcher at the Asian Vision Institute (AVI), said countries that continue to have free markets are generally foreign borrowers, and the ministry has raised the issue of borrowing. Money is invested in capital (infrastructure) to serve the country.

He added that considering the size of Cambodia’s economy and annual GDP growth rate, the current loan size has not reached a point of concern.

“We see that our loans are borrowed for development, so it has not yet reached a critical level,” Kimlong told Kiripost.

He added that although Cambodia has not yet hit the risk point, the country must think carefully about targeted spending.

“External loans should be used for the purpose of re-establishing economic activity, so-called expenditure on activities that generate revenue for the national budget (regenerate economic activity)”.

At the same event, Bun Neary, Deputy Director of the General Department of Taxation(GDT), said Cambodia has achieved increased revenue collection over the past five years, since 2017. Even in 2020, as Cambodia battled the Covid-19 pandemic and last year’s lockdowns, taxpayers had to declare income tax.

"Revenue of the GDT is exceeding the plan every year," said Neary at the OCM.

In 2017, the amount of taxes collected exceeded the plan by 15 percent. The year 2018, saw a 14 percent rise, while in 2019, 23 percent more taxes were collected. In 2020, the pandemic led to the increase in tax collections dropping by 1.36 percent. In 2021, tax collection increases bounced back, increasing by 24 percent.