PHNOM PENH: The Royal Government of Cambodia (RGC) has raised funds through government bond issuance with a total value of US$58.26 million in 2023, accounting for 26 percent of the US$200 million permitted by law.
The government issues its bonds in the first primary market through the issuance agent named the National Bank of Cambodia Auction Platform (NBCP).
“In 2023, the RGC has issued government securities in a total amount of KHR 238 billion, equivalent to US$58.26 million accounting for 29 percent of the ceiling permitted by Law (KHR 813 billion),” read a report of Cambodia Public Debt Statistical Bulletin released by the Ministry of Economy and Finance last week.
The RGC raises funds from domestic source as direct fund for using into public investment, according to the Ministry of Economy and Finance.
The government bond is not only to complete the annual expenditure but also to contribute to promoting the securities sector in the country, it said
This year is the third year of government securities issuance.
In 2024, the RGC sets to issue government bonds totaling KHR 440 billion, equating to about US$108 million, which is used to provide direct revenue and ensure investment efficiency and sustainability of debt management.
Ministry of Economy and Finance started issuing government bonds in September 2022 as a new financial instrument, enabling the government to augment domestic revenue, thereby reducing the need to borrow from foreign sources for infrastructure development.
H.E. Dr. Aun Pornmoniroth, Deputy Prime Minister and Minister of Economy and Finance, has previously said that government bonds would enable the state to raise funds for economic development.
“Government bonds are expected to be popular on the Cambodia Securities Exchange, and provide benchmark data for corporate securities trading and financial analysis, as in countries with a growing securities sector,” he said.
Investors in government bonds will enjoy a 50 percent deduction of withholding tax on the interest earned from holding and trading the bonds, and tax exemption on capital gains from purchasing and trading the bonds for three years.