CoPF Chief updates on DDO discussions
By: Isuru Parakrama
Colombo (LNW): The Committee on Public Finances (CoPF) is meeting today (30) for the third consecutive day to build a constructive dialogue on the government’s proposed domestic debt optimisation (DDO) plan and to reach a consensus, Committee Chief and SJB MP (Dr.) Harhsa De Silva said.
The CoPF Chief yesterday (29) made a public statement regarding the progress of the discussions on the government’s proposed DDO plan following the wrapping up of the second consecutive day of discussions.
In his statement, MP Silva revealed that concerns have been raised on the impact of the government’s proposed DDO plan on the superannuation funds such as the Employees Provident Fund (EPF).
Below is the full statement by MP Silva regarding the DDO process.
Update on DDO Discussions: Progress, Equity & Economic recovery in Sri Lanka
Today’s (29) CoPF meeting discussed the Domestic Debt Optimisation (DDO) plan but concerns were raised about burden falling on superannuation funds especially the Employees Provident Fund (EPF) without considering the consent of depositors. Let’s explore this issue.
While banks were excluded due to existing stress & non-performing loans, the EPF/ETF, which carries most of the burden, faces potential opportunity loss and lacks a say in decisions impacting peoples’ life savings. This raises questions about equity and transparency.
Meeting acknowledged the urgency of passing DDO swiftly for success of the International Monetary Fund (IMF) programme and economic growth. However, there is no contingency plan if foreign debt relief and primary surplus targets are not met, leaving the EPF/ETF exposed to add. burden without alternative solutions.
Productive discussions were held with creditors including banks and insurance funds, who expressed relief over the proposed DDO plan. The exclusion of banks allows them to aggressively participate in the market, supporting businesses, especially the hard-hit Micro, Small and Medium-Scale Enterprise sector.
We appreciate the tireless efforts of the Central Bank of Sri Lanka (CBSL) and the Treasury officials in stabilising and reviving the Sri Lanka economy. However, it’s crucial to address the concerns of superannuation funds EPF/ETF depositors, ensure consent and explore a more balanced burden-sharing approach.
Tomorrow (30), we meet again to reach a consensus & proceed to Parliament debate. We’ll also brief non-CoPF members for better understanding and fruitful debates this weekend. Stay tuned for updates on this critical step towards our economic recovery!