Category: Finance

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Overstayed consignments: ECC waives Rs700 million penal surcharges

ISLAMABAD: The Economic Coordination Committee of the Cabinet (ECC) on Wednesday approved waiver of penal surcharges to the tune of Rs700 million on overstayed consignments at ports.

The ECC meeting which chaired by Finance Minister Asad Umar approved a proposal of Federal Board of Revenue (FBR) to waive the accumulated penal surcharges of Rs700 million off against overstayed consignments at ports.

The decision will enable importers to clear their overstayed cargoes and would also help reducing congestion at ports and bonded warehouses.

On a summary of the Petroleum Division, the ECC approved gas supply to Tall and adjacent areas of district Hangu, Khyber Pakhtunkhwa.

The Commerce Division gave a presentation about the significance of establishment of an Independent Insurance Regulator.

The ECC directed the Commerce Division to expedite the findings of the Commission, already formed on the subject, for making informed decision.

On a proposal of Petroleum Division regarding arrangements of additional 200 MMCFD of LNG from Qatar, the Committee directed Petroleum Division to carry out a comprehensive demand/supply analysis of LNG in the country, in consultation with stakeholders, including Law and Justice Division, and submit a summary to the Cabinet in this regard.

Maritime Affairs Division briefed ECC about the progress on new LNG Terminal.

The Finance Minister directed Maritime Division to expedite the process for establishment of new LNG terminal in view of the increasing demand for gas in the country.

On the issue of the submission of Pakistan Steels’ revival business plan, ECC directed the Ministry of Industries to submit its proposals within the next fortnight.

The Committee also accorded approval to the proposal of National Counter Terrorism Authority by granting it Technical Supplementary Grant of Rs133.156 million.

Later, the Finance Minister also presided over a meeting of the Cabinet Committee on Energy (CCoE) and reviewed various proposals about gas losses and power recovery plan presented by Petroleum and Power Divisions separately.

The Committee directed the Petroleum Division to take corrective measures to reduce gas losses.

It asked the Division to submit monthly report on Unaccounted for Gas (UfG) on the pattern of the report on electricity losses presented by the Power Division.

The Committee also directed both gas supply companies (SNGPL & SSGPL) to prepare a joint presentation, and present the same to Task Force on Energy before submission to CCoE in its next meeting.

In order to make recovery from the defaulters, CCoE directed Power Division to implement the Electricity Act in letter and spirit by disconnecting the connections of defaulters.

The Committee was briefed by the Power Division about the status on Efficiency Tests Report for Independent Power Producers (IPPs).

It was informed that the mandatory test had been carried out for all the seven units. The data analysis had been completed for five units while the same with regard to the remaining two units was presently underway.

March 27, 2019
IMF mission chief holds talks with Pak authorities for new program

ISLAMABAD: IMF mission chief for Pakistan, Ernesto Ramirez-Rigo, visited Islamabad and Karachi during March 26-27, for introductory meetings with the authorities, said a statement on Wednesday.

Ramirez-Rigo assumed Pakistan mission chief responsibilities earlier this month. This was his first visit to the country.

In Islamabad, Ramirez-Rigo met with the Minister of Finance, Asad Umar, the Minister of Commerce, Razzak Dawood, the Minister of Power, Omer Ayub, the State Minister for Revenues Hammad Azhar, and several government senior officials, including the Finance Secretary, Younus Dagha, the Chairman of the Federal Board of Revenues, Jehanzeb Khan, and the Advisor to the Prime Minister on Institutional Reforms and Austerity, Ishrat Hussain.

In Karachi, he met with the Governor of the State Bank of Pakistan Tariq Bajwa and other senior officials from the State Bank of Pakistan.

Discussions focused on recent economic developments and prospects for Pakistan in the context of ongoing discussions toward an IMF-supported program.

March 27, 2019
Asad Umar meets IMF mission chief

ISLAMABAD: Finance Minister of Pakistan Asad Umar met the IMF Mission Chief Ernesto Ramirez Rigo in Islamabad, on Tuesday.

The minister and the Mission Chief discussed all issues including fiscal, monetary, structural reforms and energy sector, a statement said.

Asad Umar briefed Ramirez Rigo about the steps taken by the government for improving the economy of the country.

The minister informed that the structural reforms and other economic initiatives introduced by the government were yielding desired results.

The minister said that the government would continue to address the macroeconomic imbalances and would take necessary corrective measures in this regard.

March 27, 2019
Restriction on non-filers for car buying considerably reduces own money

KARACHI: The restriction on non-filers to purchase cars during first half of current fiscal year has reduced the delivery time and also reduce the own money for immediate delivery in the grey market.
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March 26, 2019
SBP estimates lower GDP growth, high inflation

KARACHI: State Bank of Pakistan (SBP) has projected the real GDP growth for fiscal year 2018/2019 would be around 3.5-4 percent much lower than the actual target of 6.2 percent.

The central bank in State of Pakistan Economy, Second Quarterly Report for Fiscal Year 2018/2019, issued on Monday the SBP further projected that the inflation would further increased to 6.5-7.5 percent during the current fiscal year as compared with actual target of 6 percent.

The GDP growth for fiscal year 2017/2018 was 5.2 percent and inflation for the same year was recorded at 3.9 percent.

The central bank estimated that remittances would be above the target during the current fiscal year to $21.5 billion. However, estimates for exports are at $25.5-27 billion lower than the target of $27.9 billion. Meanwhile, the estimates for imports have also been lowered to $54-56 billion from actual estimate of $58.5 billion.

The SBP estimated that the fiscal deficit would be around 6-7 percent against target of 4.9 percent. The fiscal deficit was at 6.6 percent last year. The current account deficit would stay around 4.5-5.5 percent of the GDP as against the target of 4 percent.

The SBP said that real GDP growth during FY19 is likely to moderate significantly, mainly due to slowdown in the growth of the agriculture sector and stabilization measures taken to preserve macroeconomic stability.

This is in line with a further contraction in LSM during Q2-FY19. Moreover, given that public development spending, a key driver for private sector industrial activities, is unlikely to pick up anytime soon, the full year outlook for manufacturing activities remains subdued.

Furthermore, private consumption is going to remain lower due to tighter monetary policy and pass through of exchange rate depreciation that has resulted in both higher energy prices and core inflation.

In addition, the prospects for the upcoming wheat crop remain subdued in terms of growth. All these aspects are going to constrain the services sector in the coming months as well.

Regarding price pressures, inflation is expected to remain high in H2-FY19. This is due to the second round impact of recent exchange rate depreciations, an upward adjustment in gas and electricity prices and higher budgetary borrowing from SBP.

However, the lagged impact of policy rate increases would be instrumental in keeping demand pressures in check. Acknowledging these risks, SBP continues to project average CPI inflation at 6.5-7.5 percent for the full year.

As noted earlier, the primary deficit has increased further while there has been a sharp reduction in development expenditures in order to improve the fiscal position.

This situation has become more challenging as the growth in current expenditure inched up to 17.3 percent during the first half as compared to 13.5 percent last year.

On the contrary, revenue collection has contracted by 2.4 percent during the same period as compared to the growth of 19.8 percent last year.

Since there is limited room to curtail government expenditures in the coming months, it is the growth in revenues that would be instrumental in determining the overall fiscal position for FY19.

Incorporating the performance of revenue collection during the second half in the last four years, SBP projects fiscal deficit to further deteriorate by 0.5 percent of GDP, which brings it close to the same level as in FY18.

As for the external sector, while the CAD has improved by USD 1.7 billion during the first seven months of FY19, it is still high at USD 8.4 billion.

Some improvement is expected to continue in the remaining months as imports are likely to contract further on account of moderating domestic demand and relatively low international oil price as compared to that at the beginning of FY19.4 However, merchandize exports are expected to miss the target due to waning demand in certain export destinations.

Additionally, this is compounded by the competitive pressures in the international arena and the lack of diversified and higher value

added products that can effectively utilise the export quotas allowed under specific trade agreements.

Meanwhile on the external financing front, the efforts of the government have started to materialize in the shape of bilateral inflows from Saudi Arabia, UAE and China. Some of these inflows have already been realized, while rest are due in H2-FY19.

Along with the Saudi deferred oil payment facilities, these inflows have an important role in meeting the external financing gap for FY19; thereby, relieving pressure on the foreign exchange reserves and mitigating volatility in the FX market.

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SBP stresses urgent need to initiate structural reform in economy

March 25, 2019

Prize bonds investment soars by 17.07 percent to Rs929.64bn

KARACHI: The investment in prize bonds has soared to Rs929.64 billion by January 2019 as compared with Rs794.09 billion by the same month of the last year, showing an increase of 17.07 percent.

According to statistics issued by State Bank of Pakistan (SBP), the savings mobilized through prize bonds had increased to Rs929.64 billion January 2019 through different categories of prize bonds.

The statistics have shown the investment in higher denomination prize bonds increased more rapidly then the lower denomination.

Following is the position of investments in different prize bonds:

(Rs in million)

S. No.	Prize Bonds	Jan 2019	Jan 2018	% Increase
01	Rs100	9,771	8,795	11.09
02	Rs200	29,325	27,076	8.30
03	Rs750	98,590	86,520	13.95
04	Rs1,500	105,019	90,078	16.58
05	Rs7,500	96,221	75,317	27.75
06	Rs15,000	173,803	144,780	20.04
07	Rs25,000	156,923	135,080	16.17
08	Rs40,000	259,130	225,586	14.86

March 24, 2019

Pakistan’s forex reserves increase to $15.71 billion

KARACHI: Pakistan’s foreign exchange reserves have increased by $743 million to $15.709 billion with inflows of $1 billion from UAE.

The total reserves of the country increased to $15.709 billion by week ended March 15, 2019 as against $14.966 billion a week ago, according to data of State Bank of Pakistan (SBP) issued on Thursday.

During the week ending March 15, 2019, SBP received inflow of $1 billion from UAE as placement of funds.

After taking into account outflows relating to external debt and other official payments, SBP reserves increased by $716 million during the week, SBP said.

The official reserves of the central bank increased to $8.838 billion by week ended March 15 from the level of $8.122 billion a week ago.

Similarly, the foreign exchange reserves held by commercial bank have increased by $27 million to $6.87 billion from previous week’s level of $6.843 billion.

March 21, 2019
Investment in registered prize bonds surges by 30pc

ISLAMABAD: The investment into premium prize bonds of Rs40,000 has registered significant increase of 30 percent owing to attractive avenue for persons having legitimate money.

The investment into the premium prize bonds increased to Rs5.86 billion by January 2019 as compared with Rs4.52 billion in the same period of the last year.

In order to promote documentation of economy, the registered bonds with denomination of Rs40,000 was launched two years ago.

The first prize of the premium bond is Rs80 million and the winner of the draw will get the prize money directly to his bank account.

The registered bond is only issued against Computerized National Identity Card (CNIC) and account maintenance certificate of the account number mentioned in application.

The bond has bi-annual profit at three percent per annum for all premium prize bond holders.

March 21, 2019
Credit Suisse consultants for RLNG plants privatization

ISLAMABAD: The government has accorded approval to a consortium led by Credit Suisse to act as financial consultants for the privatization of the RLNG power plants.

The approval was given at a meeting of the Board of Privatization Commission chaired by Federal Minister of Aviation and Privatization Muhammad Mian Soomro.

The transparent and appropriately appraised value of privatization of state owned enterprises is one of the major priorities of the current government and shall be successfully undertaken with due regard to every possible minutiae, Soomro said.

The meeting was attended by Secretary Privatization Rizwan Malik and the board members of the Privatization Commission.

A number of essential issues were on the agenda. The Minister was briefed about the progress made in the Privatization process of a number of state owned enterprises.

These enterprises include Mari Petroleum, SME Bank and First Woman’s Bank. Other state owned entities which are to be privatized on priority basis were also discussed. These include Services Hotel and Convention Centre, Islamabad.

The Minister was apprised of the current status of the process for each entity and the Minister ordered that it should be ensured that every possible step is taken to ensure a transparent and financially feasible privatization.

The meeting also confirmed the minutes of the Third Meeting (03/2018) of Privatization Commission Board which was held on 18th December, 2018 and also reviewed the status of decisions of the Third Meeting of the PC Board. The appointments of Consultants of the Privatization Commission were also discussed.

It was also decided in the meeting that a steering committee headed by the Minister for Privatization, including relevant stakeholders shall over see the implementation process of privatization.

March 21, 2019
Informal donations prone to money laundering: SECP

KARACHI: Pakistan has been rated amongst most charitable nations in the world but most donations are routed informally which makes the whole exercise prone for terror financing and money laundering, Waseem Ahmad Khan, Additional Director, Securities and Exchange Commission of Pakistan (SECP) said on Wednesday.

He was addressing at a seminar organized by Karachi Tax Bar Association (KTBA) at auditorium of Regional Tax Office (RTO) Karachi.

He said that SECP and State Bank of Pakistan (SBP) had taken initiatives to fix the issues on Anti Money Laundering (AML)/Countering Financing Terrorism (CFT) pointed out by Financial Action Task Force (FATF).

He informed the participants that FATF is a 37-member global body established in 1989 with mandate to combat money laundering, terror finance and nuclear non-proliferation. Besides it has also associates observers.

Pakistan as a member has international obligations to comply with FATF recommendations and correspondingly it had promulgated relevant laws including Anti-Terrorist Act, 1997, Anti-Money Laundering Act, 2010, National Counter Terrorism Act, 2013 etc. and had also devised national action plan.

Waseem Ahmad said that the SECP was undertaking enhanced due diligence on the basis of territorial / geo-political basis, sectoral lines and channel of donations.

In order to realize the full impact of spirit of generosity of Pakistan horizontally, he suggested risk management should be set up by every non-profit organization (NPO).

Khalid Mahmood, President, KTBA, in his welcome address thanked the speaker and audience who attended the seminar in a big number. The even was moderated by KTBA vice president Zeeshan Merchant.

March 20, 2019