PM orders government agencies to review debt repayment delays

Their actions have resulted in the nation's credit rating being lowered, said Mai Tien Dung, who heads a task force formed by Prime Minister Nguyen Xuan Phuc.

Dung, Chairman of the Government Office, was referring to international rating agency Moody’s on Wednesday changing Vietnam's outlook to negative after the government delayed a debt repayment. 

"The negative outlook reflects some ongoing risk of payment delays on some of the government's indirect debt obligations, in the absence of more tangible and significant measures to improve the coordination and transparency around debt management within the administration," Moody's Investors Service said in a statement, concluding the review for downgrade that was initiated on October 9, 2019.

Dung held discussions Friday with the ministries of finance, planning and investment, transport, and industry and trade as well as the State Bank of Vietnam on late foreign debt payments by some expressway and hydropower projects.

He asked the agencies to review and reflect on their delayed debt repayment even when they had enough money to pay.

Dung said they are responsible for not seriously implementing the directions of the Prime Minister and Deputy Prime Minister Vuong Dinh Hue in sending reports on the day of the debt repayment. They were slow to handle issues and failed to promptly report any problems that might have arisen in making the repayment, he said.

Dung also highlighted that the World Bank's letter to the Ministry of Finance had proposed three options for quick repayment of Individual Development Association (IDA) capital in June 2019, with an answering deadline of November 30. But the Ministry of Finance did not submit the documents to the PM to be reviewed until December 5.

Previously, PM Phuc had ordered state agencies to come up with solutions for delayed foreign debt repayment so that there are no negative impacts on Vietnam's credit rating.