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Colombia: Staff Report for the 2015 Article IV Consultation—Informational Annex

Author(s):
International Monetary Fund. Western Hemisphere Dept.
Published Date:
June 2015
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Fund Relations

(As of April 6, 2015)

Membership status: Joined: December 27, 1945; Article VIII.

General Resources Account:

SDR millionPercent Quota
Quota774.00100.00
Fund holding of currency (Exchange rate)486.6162.87
Reserve position287.3937.13

SDR Department:

SDR millionPercent Quota
Net cumulative allocation738.32100.00
Holdings723.5698.00

Outstanding Purchases and Loans: None.

Latest Financial Arrangements:

In million of SDR
TypeDate of ArrangementExpiration DateAmount ApprovedAmount Drawn
FCLJun 24, 2013Jun 23, 20153,870.000.00
FCLMay 6, 2011May 5, 20133,870.000.00
FCLMay 7, 2010May 5, 20112,322.000.00
FCLMay 11, 2009May 6, 20106,966.000.00
Stand-byMay 2, 2005Nov 2, 2006405.000.00
Stand-byJan 15, 2003May 2, 20051,548.000.00

Projected Payments to the Fund (in SDR million):

forthcoming
20152016201720182019
Principal
Charges/interest0.010.010.010.010.01
Total0.010.010.010.010.01

Implementation of HIPC Initiative: Not applicable.

Implementation of Multilateral Debt Relief Initiative (MDRI): Not applicable.

Exchange Rate Arrangement: Colombia’s exchange rate arrangement is classified as flexible regime (de jure and de facto) subject to certain intervention rules specified by the central bank. Colombia maintains an exchange restriction subject to Fund approval under Article VIII arising from the special regime for the hydrocarbon sector.

Article IV Consultation: The last Article IV Consultation was concluded on May 19, 2014 (Country Report No.14/141).

FSAP participation and ROSCs: The FSAP took place in 2000 and was updated in 2008 and 2013. A data ROSC took place in 2006 and a fiscal ROSC in 2003.

Technical Assistance:

DepartmentTime of DeliveryPurpose
STAJan-14National Accounts Statistics
STAJan-14Consumer Prices/Producer Price
MCMJul-14Bank Supervision & Regulations
FADJul-14RA Gap
FADJun-14Customs Administration
FADFeb-15Tax Policy
FADNov-14Public Financial Management
FADSep-14Tax and Customs Administration
FADOct-14Tax Administration

World Bank Relations1

The current IBRD Country Partnership Strategy (CPS) for FY 12–16 aims to support selectively Colombia’s National Development Plan. The World Bank Group (WBG) is stepping up efforts to enhance development impact through selectivity, as a means to provide added value to the country. The WBG has been carrying out activities for which the Government or the private sector have expressed explicit need through financial, knowledge, and convening services. Activities are managed under an enhanced thematic business model approach, aimed at improving the impact of the Bank’s engagement in Colombia. These activities are combined as a results-focused package of support grouped under three strategic themes: (a) Expanding Opportunities for Social Prosperity; (b) Sustainable Growth with Enhanced Climate Change Resilience; and (c) Inclusive Growth with Enhanced Productivity. Each of these strategic themes has three areas of results with specified outcomes. In some cases, outcomes in this CPS cannot solely be attributed to the WBG since activities are often jointly accomplished with the Government or other partners.

For FY 14–16 the lending program is expected to be US$870–1,025 million per annum. Actual delivery of the lending program will depend on Colombia’s performance, IBRD lending capacity, demand from other borrowers, global economic developments, and disbursement profiles that keep exposure within the country limits. Trust funds have continued to be an integral part of the Bank’s engagement with Colombia. As trust fund resources are not predictable for the purpose of the CPS, the WBG is ensuring that activities financed by trust funds follow the thrust of this strategy in agreement with the government counterparts.

As of April 2015, Colombia is IBRD’s 7th largest Bank borrower with US$7.9 billion in outstanding debt. The active portfolio is composed of 15 IBRD and 1 stand-alone GEF project with IBRD net commitments of US$2.8 billion. Colombia also has a considerable Trust Fund portfolio with US$61 million represented in a variety of sectors, with close to 42 percent (US$26 million) in small and micro trust funds under US$5 million. In FY 15, 2 large DPF operations for US$1.4 billion were approved. The pipeline for FY 16 includes two DPFs of US$700 million each for Sustainable Development and Growth and Convergence, respectively, as well as potential one IPFs in support of Plan Pacifico and Financial Systems Strengthening, each. A Multi-Donor Trust Fund has been launched for support of the peace agenda and post-conflict initiatives. The WB chairs the steering committee. Current overall contributions are at US$6.5 million, of which the Swedish Development Cooperation contributed SKr 19.5 million and the WB-administered State and Peace Building Fund US$4 million.

IFC’s outstanding portfolio in Colombia is US$779 million in 60 projects. It is the 10th largest portfolio worldwide and 3rd regionally. In terms of commitments, the top sectors are: finance and insurance (55 percent), transport and warehousing (14 percent), oil, gas and mining (8 percent) and electric power (6 percent). In terms of products, 44 percent is in loans and guarantees and 56 percent in equity and equity-type products. Participants’ outstanding loans total US$353 million.

Operational Portfolio (IBRD/IDA and Grants)As of April 2015 (In millions of U.S. Dollars)
Closed Projects206
Active Projects15
IBRD/IDA
Total Disbursed (Active)2.757
Of which has repaid127.5
Total Disbursed (Closed)4.842
Of which has been repaid1.960
Total Disbursed (Active +Closed)7.599
Of which has been repaid2.088
Total Undisbursed (Active)1.391
Loan Information (IBRD)As of March 2015 (In millions of U.S. Dollars)
FY*2008200920102011201220132014
Total Disbursements6381,2401,592488396780642
Repayment Amount381170258277241416538
Net Disbursements2571,0701,334211155364104

Fiscal Year: July - June 30

Fiscal Year: July - June 30

International Finance Corporation (IFC) PortfolioAs of March 2015
Quasi Equity ($m)
Debt ($m) 353Equity ($m) 263163 (Loan + Equity)Total ($m) 779Guarantee 4
Investment Business – Top sectors and Clients
Sector 1Finance & Insurance
Sector 2Transportation & Warehousing
Sector 3Oil, Gas, and Mining
Sector 4Collective Investment Vehicles
Sector 5Electric Power
Top clientDAVIVIENDA I

Inter-American Development Bank Relations1

The Bank is developing the new country strategy with Colombia (2015–18) and identifies three policy areas of dialogue with the government: productivity, effectiveness of public management and social mobility. These areas are part of a comprehensive vision for the development process of the country, aimed at a vision where the country can achieve a path of sustainable growth and become a developed country in the long run. There are cross-cutting requirements associated with this objective and to growth and overcome conditions of poverty and inequity, which are: (i) increase tax-fiscal revenues in order to ensure a sizable flow of public goods, and (ii) recognizing both infrastructure development, and human and social capital development as necessary factors for greater productivity and strengthen the middle class.

The sovereign guarantee lending envelope under the current Strategy (2014–18) was estimated at US$852 million per year, which total US$3.4 billion for the years 2012 to 2014. In 2014, the Bank approved 5 operations for US$1032 million in sovereign guarantee operations.

The Bank portfolio is currently composed of 25 sovereign guarantee operations, totaling US$2.3 billion, with a disbursed percentage of 34 percent. Operations are concentrated in infrastructure (50 percent), governance (31 percent) and social development (20 percent).2 The non-reimbursable technical cooperation portfolio includes 131 operations, with an approved value of US$58 million.

The current portfolio of private sector initiatives (non-sovereign guarantee) in Colombia totals US$209 million. The Inter-American Investment Corporation has a portfolio of US$87 million.

Colombia Sovereign Loan PortfolioAs of February 28, 2015
Number of OperationsCurrent Approved US$MDisbursement (Percent)
Infrastructure131,13828
Governance107217
Social Development24468
TOTAL252,30534

Statistical Issues

(As of March 31, 2015)

A. Assessment of Data Adequacy for Surveillance

Data provision is adequate for surveillance.

Real Sector

The National Department of Statistics (DANE) is responsible for the compilation of the national accounts, although the Banco de la República (BdR) compiles the financial accounts. Annual and quarterly estimates of GDP by the production and the expenditure approaches use 2005 as the reference year. GDP compilation conforms to the methodological recommendations of the System of National Accounts 1993 (1993 SNA) and some recommendations of the 2008 SNA. The rebasing of the national accounts’ base year included a methodological change regarding the volume measures from a fixed-base Laspeyres index to a Laspeyres chain index with 2005 as the reference year. The main implications of the rebasing are that the 2000 and 2005 series are not comparable and the chain index is associated with non-additivity of the components. The rebasing also resulted in an upward revision of the nominal GDP, reflecting improvements in source data. DANE currently compiles a monthly indicator of economic activity for internal purposes, but has decided to start disseminating it to the general public during the third quarter of 2014.

DANE is also responsible for price statistics. It currently compiles and disseminates the consumer price index (CPI) and the producer price index (PPI). The basket and weights of the CPI were updated in 2008 according to the latest Income-Expenditure Survey (2006–2007), which resulted in an increase in the number of products collected. DANE is currently updating the PPI, which is expected to be available during the third quarter of 2014.

Government Finance Statistics

The Ministry of Finance and Public Credit (MFPC) is responsible for the compilation of public revenue, expenditure, and financing data. The Colombian authorities have reaffirmed their commitment to adopt the GFSM 2001 framework, enhance inter-institutional coordination, and increase the resources allocated to compiling government finance statistics. While significant progress has been made, there is still a need to take additional steps. In the short term, these include: adopting a common list of public sector entities, and disseminating high-frequency data on a national and international level. The General Accounting Office (GAO) has developed a single accounting framework for the public sector based on International Public Sector Accounting Standards and maintains a financial management information system containing accounting information of all public sector units. The MFPC’s Macroeconomic Policy Unit and the GAO developed a bridge table that converts national accounting classification to the GFSM 2001 framework to compile GFS on accrual and cash bases, which are reported annually to the IMF’s Statistics Department for publication in the Government Finance Statistics Yearbook.

Financial Sector Statistics

The BdR is in charge of compiling data on the financial sector, while the Financial Superintendence (FS) and the Superintendence of Securities compile data in their respective areas. Fund technical assistance missions have placed special emphasis on issues supportive of data quality, including interagency cooperation and procedures to ensure data consistency.

External Sector Statistics

The BdR is in charge of compiling and disseminating balance of payments statistics. Quarterly data have been produced since 1994, and the BdR adopted the BPM5 standard in 1998. Balance of payment statistics have been extended to cover transactions in the free trade zones. Improved surveys, particularly in the services sector, have enhanced coverage and consistency and financial account data are now based on actual disbursement rather than registers.

The 2005 data ROSC mission recommended that the BdR, in consultation with the DANE, develop a methodology to include unrecorded trade in the balance of payments on a timely basis. Although DANE developed a methodology to estimate unrecorded trade, the BdR does not include these estimates in the balance of payments statistics. Also, the BdR has been working to identify government bonds issued abroad and held by residents, but the task has not been completed yet due to coverage issues. In line with the mission’s recommendations, the BdR reclassified some FDI equity transactions to portfolio equity, and adjusted the related investment income series accordingly.

The BdR also compiles and disseminates data on International Investment Position statistics, External Debt statistics, and the Data Template on International Reserves and Foreign Currency Liquidity. Colombia reports data to the Coordinated Portfolio Investment Survey (CPIS).

B. Data Standards and Quality

Colombia subscribes to the Special Data Dissemination Standard (SDDS) and metadata are posted on the Fund’s Dissemination Standards Bulletin Board (DSBB).

A data ROSC was published in October 2006.

C. Reporting to STA

Colombia reports annual GFS to STA for general government and its subsectors on accrual and cash bases for publication in the Government Finance Statistics Yearbook (GFS Yearbook). Data for the consolidated general government are only available from 2008 onward after a major revision was performed in stock data. Currently, no high frequency data are reported for publication in IFS. However, an action plan currently being implemented by the authorities is aimed to address this issue. Colombia is also expected to start reporting debt statistics for the IMF-WB Public Sector Debt Statistics database. The BdR uses the standardized report forms for reporting monetary data for the central bank (Form 1SR), other depository corporations (Form 2SR), and other financial corporations (Form 4SR) to STA. The FS reports 11 of the 12 core financial soundness indicators (FSIs) and 10 of 13 encouraged FSIs for deposit takers on a regular monthly basis.

Colombia: Table of Common Indicators Required for SurveillanceAs of April 6, 2015
Date of Latest ObservationDate ReceivedFrequency of Data1Frequency of Reporting1Frequency of Publication1Memo Items:
Data Quality – Methodological Soundness8Data Quality – Accuracy and Reliability9
Exchange RatesApr. 9, 2015Apr. 10, 2015DWD
International Reserve Assets and Reserve Liabilities of the Monetary Authorities2Dec. 2014Mar. 2015MMM
Reserve/Base MoneyDec. 2014Mar. 2015DWWLO, O, LO, LOO, O, O, O, O
Broad MoneyDec. 2014Mar. 2015DWW
Central Bank Balance SheetJan. 2015Mar. 2015MMM
Consolidated Balance Sheet of the Banking SystemDec. 2014Mar. 2015MMM
Interest Rates3Apr. 4, 2015Apr. 7, 2015DWD
Consumer Price IndexMar. 2015Apr. 6, 2015MMM
Revenue, Expenditure, Balance and Financing Composition4 – General Government (GG)5Q3 2014Mar. 2015QQQO, O, LO, OLO, O, O, O, NO
Revenue, Expenditure, Balance and Composition of Financing4 – Central GovernmentFeb. 2015Mar. 2015MMM
Stocks of Central Government and Central Government-Guaranteed Debt6Feb. 2015Mar. 2015MMM
External Current Account BalanceQ4 2014Mar. 2015QQQO, LO, LO, LOO, O, O, O, LO
Exports and Imports of Goods and ServicesQ4 2014Mar. 2015QQQ
GDP/GNPQ4 2014Mar. 2015QQQO, LO, O, OLO, O, LO, LO, NO
Gross External DebtDec. 2014Mar. 2015MMM
International Investment Position7Q4 2014Mar. 2015QQQ

Daily (D); Weekly (W); Monthly (M); Bi-monthly (B); Quarterly (Q); Annually (A); Irregular (I); Not Available (NA).

Any reserve assets that are pledged or otherwise encumbered should be specified separately. Also, data should comprise short-term liabilities linked to a foreign currency but settled by other means as well as the notional values of financial derivatives to pay and to receive foreign currency, including those linked to a foreign currency but settled by other means.

Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.

Foreign, domestic bank, and domestic nonbank financing.

The GG consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.

Including currency and maturity composition.

Includes external gross financial asset and liability positions vis-à-vis nonresidents.

Reflects the assessment provided in the data ROSC published in October 2006 for the dataset corresponding to the variable in each row. The assessment indicates whether international standards concerning concepts and definitions, scope, classification/sectorization, and basis for recording are fully observed (O); largely observed (LO); largely not observed (LNO); not observed (NO); and not available (NA).

Same as Footnote 8, except referring to international standards concerning (respectively) source data, assessment of source data, statistical techniques, assessment and validation of intermediate data and statistical outputs, and revision studies.

Daily (D); Weekly (W); Monthly (M); Bi-monthly (B); Quarterly (Q); Annually (A); Irregular (I); Not Available (NA).

Any reserve assets that are pledged or otherwise encumbered should be specified separately. Also, data should comprise short-term liabilities linked to a foreign currency but settled by other means as well as the notional values of financial derivatives to pay and to receive foreign currency, including those linked to a foreign currency but settled by other means.

Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.

Foreign, domestic bank, and domestic nonbank financing.

The GG consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.

Including currency and maturity composition.

Includes external gross financial asset and liability positions vis-à-vis nonresidents.

Reflects the assessment provided in the data ROSC published in October 2006 for the dataset corresponding to the variable in each row. The assessment indicates whether international standards concerning concepts and definitions, scope, classification/sectorization, and basis for recording are fully observed (O); largely observed (LO); largely not observed (LNO); not observed (NO); and not available (NA).

Same as Footnote 8, except referring to international standards concerning (respectively) source data, assessment of source data, statistical techniques, assessment and validation of intermediate data and statistical outputs, and revision studies.

1Prepared by the World Bank staff.
1Prepared by Inter-American Development Bank staff.
2Includes Policy Based Loans.

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