Costa Rica
Balance of Payments and International Investment Position Statistics (October 13-23, 2014)

This Technical Assistance Report discusses the recommendations made by the IMF missions on the balance of payments and international investment position dynamics in Costa Rica. In view of the results of the economic survey, the mission recommended that the Central Bank of Costa Rica (BCCR), in cooperation with the Ministry of Finance, follow up with respondents to raise awareness of the importance of reporting transactions by residency. Regarding the work on secondary income, the mission observed that the BCCR has a reliable estimate of income of seasonal and border workers in Costa Rica. It is expected that the BCCR will be able to collect information on pensions received by foreign residents who retire in Costa Rica.

Abstract

This Technical Assistance Report discusses the recommendations made by the IMF missions on the balance of payments and international investment position dynamics in Costa Rica. In view of the results of the economic survey, the mission recommended that the Central Bank of Costa Rica (BCCR), in cooperation with the Ministry of Finance, follow up with respondents to raise awareness of the importance of reporting transactions by residency. Regarding the work on secondary income, the mission observed that the BCCR has a reliable estimate of income of seasonal and border workers in Costa Rica. It is expected that the BCCR will be able to collect information on pensions received by foreign residents who retire in Costa Rica.

I. Secondary Income Accounts

1. The most significant components of these accounts in quantitative terms are without doubt those associated with remittances. For this purpose, the BCCR Economic Statistics Area (EEE) conducts the surveys shown in Table 1. It also prepared a methodological report on border workers and temporary workers in Costa Rica during the period 2013–2014, which is attached as Annex VII to this report. The combination of this information provides coverage of remittances through formal and informal channels, which is shared moreover with compilers in Panama and Nicaragua. Those compilers maintain mirror records of the results of the AESE’s work in view of the importance to those three countries of the work force employed primarily in Costa Rica’s agricultural sector.

Table 1.

BCCR Economic Statistics Area Survey

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2. The data thus obtained are used to prepare the entries presented in Appendix 5, Remittances, Table A5.1 of the Balance of Payments and International Investment Position Manual, Sixth Edition (BPM6). During the analysis of data from the field investigation “Border Workers and Temporary Workers in Costa Rica, 2013–2014” (a summary of this investigation is provided in Annex VII of this report) and the average values of foreign remittances received, the concern arose for more fully identifying possible monetary transfers that were not necessarily remittances but, given the educational and communication characteristics of Costa Rica, could include work performed remotely or that would involve only a reclassification within Table A5.1 or a reclassification of professional or information technology services, for example. This task has been planned for the future.

3. Regarding the remaining components of the secondary income accounts, information on grants is obtained through surveys of international organizations, universities, and cultural institutions that generally receive support from the foreign governments or institutions.

4. Embassies are also consulted, although the response rate is insignificant. During the mission, an option was evaluated of replacing the current form—which includes information to prepare the government services account, which embassies of all countries generally do not report because the information is considered sensitive—with a new form including only the grants module, on the understanding that this information would be acceptable because it highlights the governments’ contribution to other governments or nonprofit organizations. The change will be implemented starting with the next survey. In any event, the questionnaires were designed to allow local grant recipients to identify the source of grants in order to avoid duplication of figures. An investigation was also initiated into the possibility of identifying goods imports that represent donations.

II. Implementation Status of CDIS and CPIS Recommendations

5. The first and second recommendations of the technical assistance mission on the Coordinated Direct Investment Survey (CDIS) and the Coordinated Portfolio Investment Survey (CPIS) refer to continuing efforts toward disseminating balance of payments and IIP statistics and finalizing the methodological documents to accompany the dissemination of statistics. Both tasks were completed, and the information and respective notes were posted on the BCCR website (see: http://www.bccr.fi.cr/indicadores_economicos_/Sector_Externo.html).

6. The third recommendation was to advocate to the authorities of the BCCR and the national statistics institute (INEC) the promulgation of a legal provision authorizing the BCCR and any other public entity involved to obtain information from various economic agents to compile Costa Rica’s macroeconomic statistics. This is a highly sensitive point, because in a number of cases it significantly affects the coverage and quality of statistics prepared by the AESE despite its efforts to obtain the information.

7. In this regard, the mission suggested, without prejudice to maintaining the requirement of strengthening the BCCR legal framework, exploring the possibility of using the mechanisms available under the National Statistics System Act, Law 7839 as amended, in particular Article 5. Without this type of support, many of the AESE tasks proposed to improve statistics and fully comply with the BPM6 recommendations could not be implemented. Despite the significant effort by the AESE in terms of training and work methodology, this would affect the quality of its statistics with the attendant negative impact on compliance with the requirements of the Special Data Dissemination Standard (SDDS), which Costa Rica has subscribed to with the IMF. Accordingly, the mission wishes to make the following recommendations:

Recommendation 1:

  • We reiterate the need to provide the BCCR with a legal framework authorizing it to obtain information for statistical purposes from the public as well as the private sectors, providing enhanced guarantees of statistical confidentiality. If this is not possible, explore the use of the legal framework established by Law 7839 on the National Statistics System.

8. The fourth recommendation refers to the need to include firms with outward FDI operations identified by the Costa Rican export promotion agency, PROCOMER, in the balance of payments survey (BPS). The largest 10 of those firms account for 93.2 percent of outward FDI reported by PROCOMER; at least five of the firms should be visited to improve coverage. The AESE contacted those firms, one of which indicated that it was not prepared to provide any information to the BCCR; the rest will be gradually included in the quarterly and annual surveys. In this regard, refer to the comment on the legal framework provided with respect to Recommendation 7.

9. Recommendations 5 and 6 were postponed to January of the following year because both involve changes to the questionnaires that cannot be implemented in view of the work schedule of the Services and Construction Area (ASC). The authorities decided to reschedule the implementation of those recommendations. However, the mission considers that in regard to Recommendation 5, to “Revise the BPS questionnaire to require the names of firms with outward FDI operations in the section on general firm data, in order to facilitate the identification of fellow enterprises that could not otherwise be identified,” consideration should be given to the possibility of asking for this information verbally since, given the weak legal framework, some firms that are reluctant to respond to this item (in view of its sensitivity) may decide not to respond to any part of the questionnaire. This in turn would impact the response rate and hence the coverage of the information obtained.

10. Recommendation 7—which refers to the need to separate the item on insurance companies’ net position (inward and outward) in debt instruments in the column of the CDIS report for nonfinancial firms, because the positions are currently indistinguishable from those of other firms—is now complete. The information reported in the CDIS for 2013 included the breakdown of information as presented in Annex I.

11. Concerning Recommendation 8, to compare, for quality control purposes, the responses of firms surveyed in the EEE (conducted by the AEE in the context of changing the base year for the national accounts) with the responses received in the BPS for the largest 130 firms surveyed for the EEE, the recommendation could not be implemented because the firms declined to respond to those questions. For the next EEE, an effort will be made to make the firms aware of the importance of this information where applicable. This action is planned for end-2015.

12. Recommendation 9 concerns they need to review the directory of EEE firms to expand the BPS directory through the inclusion of firms that show foreign operations but did not respond to the most recent BPS. This recommendation was implemented with the inclusion of each firms in the BPS directory, with another 25 firms remaining for the next phase.

13. Recommendation 10 concerns the need to review responses to the memorandum items at the end of the BPS questionnaire (information on external liabilities of the nonfinancial private sector according to the residual maturity criterion) and the data available from the Integrated Data Management System (SIGADE) in order to include the corresponding data for both sectors in Table 3 of the Quarterly External Debt Statistics (QEDS). For the BPS, the responses to the memorandum items were quite limited in terms of both the number of firms and the amounts reported. Accordingly, while the recommendation was implemented, unfortunately the quantitative contribution to the debt tables was insignificant.

Table 2.

Total Portfolio Value

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Note: Expressed in nominal values.
Table 3.

Report of Balances Recorded in the Book Entry System (SAC) at the Close of Each Day

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14. It is clear that the deficiencies of the legal framework pose an obstacle for the AESE, which faces the dilemma of requesting information required to fulfill its mandate of compiling external sector statistics, with respect to the firms’ willingness to provide further breakdowns, which often becomes a disincentive to providing information, even for firms that traditionally cooperate in reporting data.

15. Recommendation 11 involves the exchange of data with the Superintendency of Securities (SUGEVAL) regarding resident institutions serving as securities custodians. The purpose of the exchange would be to determine whether any nonresidents purchase securities issued in Costa Rica by residents (primarily the central government) in local currency and, if so, to determine the amount of and availability of information on such purchases. To the extent the purchases occur, the corresponding flows and positions are not currently reflected in the external debt.

16. The BCCR and SUGEVAL have a roadmap to coordinate mutual requests regarding statistics, which provides for this point in 2016. Accordingly, no progress has been made on this item that the delay cannot be attributed to the AESE. However, the presidency of the [BCCR] was approached to request, as an annex, the data currently required for operational purposes. If the request is granted, this would mean a significant improvement in external debt, balance of payments, and IIP statistics. The information to be requested from SUGEVAL is shown in Table 2.

17. At the same time, it was determined that for debt instruments issued by the central government and the BCCR, the central bank’s book entry system (SAC) maintained by its Payment System Department maintains information on the owners of those instruments at the time of issue, including residency, as well as the International Securities Identification Number (ISIN) from June 2015 forward. Because the instruments are traded on the local stock exchange, the market price of each security can be determined at the required closing date. The information is maintained online, in other words, the respective balances can be obtained on a daily basis.

18. During the mission, the AESE formally requested that the Payment System Department provide the following information by means of direct access to the SAC:

19. This implements the following recommendation.

Recommendation 2:

  • Use the information from the BCCR book entry system (SAC) to determine the residency of holders of financial instruments issued by the government and the BCCR. A reconciliation table between the debt statistics published by the BCCR (IIP) and the Ministry of Finance (external debt) will be produced and posted on the internet after the authorities approve. Proposed exercise in Annex II.

20. The final recommendation of the technical assistance mission on CDIS and CPIS advised that as part of their quarterly training, instruct BPS interviewers to advise firms responding to the BPS of the importance of reporting trade credit and advances in the items provided specifically for this purpose, not in other sections. This task was completed.

III. Coordination with Information Sources

21. Meetings were held with the Ministry of Finance Directorate General of Public Credit (DGCP), the Costa Rican Tourism Institute (ICT), SUGEVAL, and the Directorate General of Migration and Immigration (DGME).

22. The issue of the discrepancy between the total external debt figures published by the BCCR and the Ministry of Finance was discussed with the DGCP. The difference lies in the fact that the BCCR applies the criteria of residency to the available information (instruments issued abroad held by residents and locally issued instruments held by nonresidents) and converts the instruments to market value; while the Ministry of Finance uses nominal value without distinguishing the instrument holder’s residency. It was agreed that the BCCR would develop a consistency table between the information published by the two institutions to be reviewed by the Ministry of Finance and then published on the web side. The Ministry of Finance could add a link to take users to the information. Similarly, it was recommended that a note explaining the differences between the Ministry of Finance and BCCR figures be added to the QEDS form. These actions would be subject to consultation of the authorities of both institutions.2

23. The Ministry of Finance indicated that it had the required budget appropriations and was taking the administrative steps to procure SIGADE 6.0. This would facilitate the calculation of accrued interest and would provide the BCCR with more extensive access rights that it currently has (read only), enabling it to print tables predefined by the system or define other reports to meet its specific statistical requirements. The purchase, installation, and startup of the system are expected to occur in 2015.

24. The use of SIGADE 6.0 to manage domestic public sector debt, which is currently managed by the BCCR, is also under consideration. With respect to domestic debt, discussions were held on the subject of access for the national securities depository to information on holdings of Costa Rican and foreign securities. Independently, the BCCR is developing the SAC, which provides access to the holders of instruments at the first level and by residency.

25. A meeting was also held with the ICT. The ICT is the main source of information for the travel account. The information is processed by the Services and Construction Statistics Area (AESC), which provides it to the AESE to be entered to the travel account. Data on the number of travelers is obtained from the DGME. According to the ICT, the DGME only processes information obtained from the passports of persons arriving and departing via airports and borders. International migration cards are not yet digitized or used. As a result, the number of travelers crossing the border as same-day visitors is not captured, especially at land borders. The only travelers considered same-they visitors are those arriving on cruise ships.

26. In regard to surveys of travel spending, based on the ICT database for 2013, 8,435 questionnaires were processed for incoming travelers, including cruise passengers, and the database contains a total of 1,250 interviews of travelers departing from the various locations where the survey was administered, as shown in Table 4. The ICT financed this effort.

Table 4.

Total Surveys Comprising the Database Received from the ICT for 2013

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27. According to the ICT, because no information on travelers’ residency is available, the ICT staff eliminate all Costa Ricans entering the country from the total number of arrivals, which means an indeterminate number of Costa Ricans residing abroad who visit Costa Rica are not counted3 because the spending survey for inbound tourists is administered only to foreigners. The spending survey for outbound tourists is administered to all Costa Ricans who leave the country, and is therefore possible that the responses include Costa Ricans residing abroad who are returning to their country of residence.

28. At the borders, the survey of traveler expenses is administered only to persons who stay overnight. In reviewing the results of the survey processed by the AESC, it was observed that foreigners from neighboring countries who report business as the reason for traveling show stays of 90 days or close to 90 days, when the average stay of business travelers arriving by air is six days at the most.

29. For this reason, traveler arrivals on the balance of payments is underestimated for Costa Ricans residing abroad and same-day visitors, but is overestimated for travelers who arrive by land and report business as the reason for travel but stay for close or equal to 90 days, because in reality these are foreigners residing in Costa Rica illegally who cross the border to avoid overstaying their tourist visas. Traveler departures, in turn, would appear to be overestimated through the inclusion of Costa Ricans residing abroad.

30. The AESC database was further analyzed to identify information that would improve the results or, in the alternative, estimate the value of rent imputed to nonresident travelers who stay in their own homes.

31. This aspect of the analysis served to identify the number of travelers and their average stay and compare the figures for travelers who stay in rental housing, in order to estimate the amount of imputed rent, which should be added to the inbound tourist spending.

32. Also, to ensure that this calculation is consistent with the treatment of a residence previously acquired by the nonresident, which should be recorded as FDI according to the BPM6 recommendations, the annual maintenance costs4 for the property are estimated as well as the income of the hypothetical unit, which would be given by the rent effectively paid by travelers who are not home owners and the corresponding rent imputed to the owner. The estimate for 2013 totaled US$27 million. The proposed calculation method is presented in Annex III. This completes the following recommendation.

Recommendation 3:

Produce an estimate of income from real property received by nonresidents. The estimate will include the income attributable to the owners of vacation properties. The imputed income will be included on the credit side of the travel account: Estimate the imputed rent for nonresident tourists who vacation in their own homes, which should be added to expenses from the ICT survey as well as the income net of domestic costs attributable to foreign direct investment in real estate. The income will be recorded in the Primary Income Account, Debit 1.B.2 Investment income, 1.B.2.1 Direct investment, 1.B.2.1.1 Income on equity and investment fund shares, 1.B.2.1.1.1 Dividends and withdrawals from income of quasi-corporations (D42D), 1.B.2.1.1.1.1 Direct investor in direct investment enterprises. Prepare a reconciliation table between the BCCR and ICT including the estimated expense imputed to those tourists for the use of their homes in Costa Rica during their vacation on the credit side of the travel account.

33. A meeting was held with SUGEVAL staff to discuss the possible availability of information on nonresidents’ holdings of instruments issued in Costa Rica. They indicated that brokerage firms did not have information on holdings by residency, and that this item would be considered in the context of the BCCR information request program for 2016. They also stated that at this time, the national securities depository was the custodian of those securities.

34. In view of this long timeframe, it was proposed that the BCCR make inquiries with a brokerage firm and key securities custodians to determine the possibility of classifying this information according to the BPM6.

35. From the visit to the DGME, the mission learned that the directorate had no breakdown of passengers by residency, and that the destinations reported by residents at the time of departure are the destinations later provided to the ICT.

36. They confirmed that the situation observed in the inbound tourism survey, concerning travelers who arrive by land, report business as the reason for travel, and remain for 90 days or close to 90 days, actually reflects citizens of neighboring countries who work in Costa Rica but have not formalized their residency status.

37. Regarding foreign retirees or pensioners residing in Costa Rica, the DGME maintains a cumulative, current register starting from 2006, which it will provide to the BCCR once it receives a formal request. Regarding temporary work permits, they believe that the number registered with the Ministry of Labor is overestimated, although they are aware that occasionally temporary workers no longer work for the firm that originally processed the work permit. Concerning border workers (i.e., sugar cane harvesters from neighboring countries) special documentation is being designed to enable them to be counted.

IV. Implementation Status of Balance of Payments and IIP Recommendations

38. Recommendation 1 of the technical assistance mission on balance of payments and IIP concerning manufacturing services on physical inputs owned by others: continue the effort of identifying the amounts corresponding to these services for 2012 and 2013 as was done for 2011, with a completion date of March 2014. According to the technical assistance report, the BCCR had identified 15 firms performing the service including Intel Costa Rica, which is the largest. Based on the information from those 15 firms, an estimate of manufacturing services on physical inputs owned by others was calculated for the period 2011 to 2016, for publication of the balance of payments and IIP in accordance with BPM6 in June 2014.

39. It was recently determined that the Roche company, which provides packaging services for medicines, brings in goods without transfer of ownership and then exports them. Three additional firms were identified that provide this type of service (T.P.E.S.A., General Microcircuits of Costa Rica (GMICR) S.A., and Original Mirrolure S.A.). Corrections were made for 2012 and following years in cooperation with the staff of the project to change the base year for the national accounts (PCAB). The information base for manufacturing services for the 15 firms identified is now revised from 1999 forward.

40. Concerning the splicing of financial intermediation services indirectly measured (FISIM) back to 1999, the data and consistency of series are being reviewed for all information bases and all sectors, in cooperation with the PCAB. The splicing of balance of payments and IIP from 1999 forward in accordance with the BPM6 is expected to be available by end-2014.

41. Regarding presentation of the balance of payments under both manuals, the publication of figures under the Balance of Payments and International Investment Position Manual, Fifth Edition, will be discontinued with the change of base year for the national accounts, which is planned for December 2015.

42. Recommendation 2 of the technical assistance mission on balance of payments and IIP was to continue progress to request information from the Superintendency of Pensions (SUPEN) with a completion date of June 2014, which was postponed to March 2016. The same applies to Recommendation 3, to continue progress to request information from the Superintendency of Telecommunications (SUTEL) with a completion date of December 2014.

43. As indicated in the report of the February 2014 technical assistance mission, the BCCR needs to establish coordinating mechanisms to obtain detailed information on firms supervised by the Superintendency General of Financial Entities (SUGEF), the Superintendency of Pensions (SUPEN), SUGEVAL, the Superintendency General of Insurance (SUGESE), and SUTEL. The aim of the coordination is twofold: to develop technological tools to ensure the platforms are ready when the information in the databases is received, and negotiation with the providers of information. As to the first objective, significant progress has been made according to the established timetable—monetary and financial statistics have been automated, as well as construction statistics and external sector statistics.

44. Coordination with SUGEF and SUGESE is proceeding fairly well (agreements are now in place) and, following its process, with SUGEVAL as well; accordingly, they have been removed from the list of recommendations. As part of the monitoring in this area, it was determined that efforts are under way with SUGEF on classification of information; the register of transactions has been forwarded for the purposes of identifying residencies. SUGEF has established eight data blocks: accounting balance by financial entity; credit (balances, transactions, and currency); investments and deposits (coded by issuer); liabilities (deposits and domestic and external borrowing); minimum legal reserve; financial derivatives; financial group; and financial block (matching of maturity and currency). Identification by residency will be possible in all cases. In the interim, as indicated in the previous report of the balance of payments and IIP mission, the AESE is using a specific survey for banks.

45. The agreement with SUGESE covers information from the balance sheet, income statement, and premiums required for the national accounts, but the capture of data by residency is more complicated. The chart of accounts makes no provision for residency other than for investments. Underwriting reserves are an aggregate estimate, so there is no line item for residency. A request was made to create a new item to capture premiums by residency, if possible, for use in estimating reserves by residency. It is also not possible to separate life and nonlife insurance because the current classification system provides only for personal and general insurance. For the time being, the AESE will continue with its current estimates, and the adjustment for volatility of expected claims will continue to be defined to eliminate situations of extraordinary risk that could arise in a given period.

46. There is still no agreement with SUGEVAL; however, it was learned that information will be available under assets on investment and deposits (of brokerage firms and investment funds) and under liabilities for stock and equity investments. The capture of this information is the third priority and is expected to be completed in the second half of 2015.

47. Specifically, in regard to the SUPEN information referenced in Recommendation 2, it was determined that the details of the securities portfolio are available and are in fact classified by residency. The information from this source is expected by first quarter 2016.

48. With respect to the SUTEL information referenced in Recommendation 3, an initial request was made in 2011 to measure the flow of investment. At the time, it was a new institution, and meetings were held jointly with the BCCR Institutional Sector Statistics Area (AESI) to discuss the requirements for the national accounts. The three existing operators providing mobile telephone services were identified. Cable television is attempting to enter fixed telephone services. The information request forms were designed based on this information but statistics took precedence due to lack of personnel.5 The offer was made to assist them with statistical tasks, since they are the only personnel authorized by law to compile information directly from the firms, but they did not accept the offer. The AESE has compiled information from the media regarding initial investments, but the firms’ currents transactions are not known. We recommend enlisting the support of senior management with SUTEL executives to bring the matter to a better conclusion.

49. Recommendation 4 of the balance of payments and IIP mission was to review the response rate for the EEE for questions relating to external transactions, and to supplement the sector business directories based on that information. Because the EEE is conducted annually, the mission recommends that the AESE revise the questions included on the form (April 2014).

50. In regard to the EEE, efforts were coordinated with the Ministry of Finance to increase the response rate. Information was requested from 1802 firms in trade, services, and manufacturing. In terms of general coverage, the response rate was 93 percent. The response rate to questions relating to external transactions was not determined, but we can infer that the response rate to those questions was lower than the overall rate because many firms report at the aggregate level but do not provide detailed information on residency; it is not known whether this is because they do not execute external transactions, because there is no residency line item, or because of poor quality responses. For the same reason, the information from this directory could not be used to supplement the external statistics.

51. Concerning Recommendation 5 of the balance of payments and IIP mission, reference was made to the importance of identifying seasonal behavior in the provision of certain services abroad to determine the need to make quarterly adjustments according to the results. Work was performed on a model by type of service, resulting in a distribution at the estimation by quarters. Accordingly, the recommendation was implemented and the estimated information based on the new methodology provides a better approximation of the quarterly balance of the current account and at the same time it implicitly eliminates implicit records in the errors and omissions category. Annex IV presents the results.

52. Recommendation 6 of the technical assistance mission on balance of payments and IIP was to continue with the automation of AESE reporting processes relating to the development of tools to interconnect with sources, which would increase productivity and information security by reducing the margin for error and making maximum use of the information’s analytical potential. Progress has continued in this area in cooperation with the IT Division. The automation of international reserves is expected to be concluded this year. Work is under way on providing input for the database, although the information has yet to be added. Also, the information from surveys is received online and processed through the LIMESURVEY program. The recommendation is maintained with the same completion date.

53. Recommendation 7 of the balance of payments and IIP mission was to review the information received in connection with the EEE regarding resident airlines, to validate the information reported and determine whether operating leases were in use. The survey responses were reviewed and no financial lease operations were identified. The information obtained from the airlines was of very poor quality. The mission was informed of an agreement with the Ministry of Finance whereby the airlines provide a global report of their worldwide operations, and a ratio is applied to profits based on costs reported at the country level for the purpose of calculating taxes. According to the information received, the national accounts unit is working on calculating production based on aggregation of costs. Accordingly, the mission suggests that the AESE review the national accounts unit’s estimates for airlines to determine whether they can be used as an estimate for the external accounts (June 2015).

54. Recommendation 8 of the balance of payments and IIP mission was to direct the effort already undertaken to specify relationships among FDI firms so as to expand coverage of the functional category of direct investment by identifying not only immediate investors but also indirect investors and fellow enterprises. In particular, it recommended focusing efforts on identifying the firms that account for 75 percent to 80 percent of the Direct Investment Survey, with a completion date of December 2014. No progress has been made in this area, and therefore the recommendation is maintained with the same completion date.

55. Recommendation 9, concerning the current sources of information used to determine visitor spending, was to evaluate the following scenarios: (i) continue to use the current information on expenses from the ICT with greater input from the BCCR regarding stratification of the sample, and (ii) consider the option of an independent comprehensive survey by the BCCR that would capture all reasons for travel; coordinate with the ICT beforehand so that its survey does not include spending data. This is to avoid generating two sets of spending data, which could confuse the users.

56. Concerning this recommendation, as noted in paragraph 27, it was learned during the visit to the ICT that because of the methodology currently used by the ICT, the AESE is underestimating traveler arrivals and overestimating traveler departures. The BCCR is not considering the option of an independent survey at this time. The ICT, in turn, agreed to evaluate the effect of excluding nonresident Costa Rican travelers from the figures. The mission suggests that the AESE review this effect and, to the extent feasible, suggest to the ICT that it expand the sample (March 2015).

57. Recommendation 10 of the technical assistance mission on balance of payments and IIP was to coordinate with the Cost Rican Tourism Institute (ICT) to continue the work of estimating the timetable for foreign investment relating to expenditure according to progress of work on hotel and real estate projects. The problem to be addressed by this recommendation was the monitoring of hotel company transactions. While the initial investment is known and reinvestment is also reported to the ICT, the ICT is not informed of profits generated and other transactions with nonresidents. To this end, the BCCR is submitting a survey to the 15 largest hotels, using the form applied in the survey of services, to compile information on the hotels’ transactions with nonresidents. The recommendation is therefore implemented.

58. Recommendation 11 of the balance of payments and IIP mission, concerning the information for recording public sector debt, was to monitor securities issued domestically and purchased by nonresidents, as well as their maturity dates (December 2014). The requests issued by SUGEVAL now include the criterion of residency. To date, only one operation is being monitored, the issuance of instruments in colones by Citibank. Because of the importance of this issuance of instruments, which were acquired by nonresidents, SUGEVAL is closely monitoring the operation and providing information to the BCCR. An adjustment was made in external debt to reflect this one-time operation.

59. During the mission, it was determined that the BCCR SAC system provides information for financial instruments issued by the central government and the BCCR; accordingly, the recommendation is implemented for those instruments because the AESE will be given access to the system under Reference Action 2. Also, a request was made to SUGEVAL through the presidency to expand coverage to all other instruments issued by residents. The recommendation is maintained for both cases with the same completion date.

60. With respect to commercial credits, Recommendation 12 of the balance of payments and IIP mission was to continue adding new firms identified as beneficiaries of trade credits to the directory as the research proceeds. As to this point, the forms used for the different samples include a question on commercial credits for direct investors as well as third parties. Of the 1,800 firms considered, between 300 and 400 are considered the most important. Those firms were asked to provide the accounting trial balances showing the creation of the commercial credit account, which were then compared with their responses to the form. The recommendations made at the time of the report regarding review of the EEE applies here as well (December 2014).

61. Recommendation 13 of the balance of payments and IIP mission was to continue efforts with the DGME to obtain information from visitors on residency so the expansion is adequate. Paragraphs 35 through 37 present the results of the mission’s visit with the DGME.

62. Recommendation 14 of the balance of payments and IIP mission was to implement the actions agreed to facilitate the estimation of nonlife insurance transactions in accordance with BPM6 guidelines. The AESI used the information available from insurance companies to make the necessary estimates. The recommendation was implemented, and the table reported to the IMF applying the methodology is presented in Annex I.

63. Recommendation 15 of the technical assistance mission on balance of payments and IIP was to continue the work of investigating potential transaction registries associated with pensions and health (December 2014). This effort is pending. Inquiries were directed to the DGME, and the mission was advised that the directorate had provided a migratory status of retiree (pensionado) or pensioner (rentista) according to its arrivals, which totaled roughly 3300 persons. The corresponding recording in the balance of payments is being evaluated. The recommendations are maintained with the same completion date.

64. With respect to total external debt, Recommendation 16 was to look into the possibility of the Ministry of Finance adding a note to its publications indicating external debt data according to residency as well as unmatured interest accrued (December 2014). During the meeting with Ministry of Finance staff, they indicated that they would submit the proposal to the authorities (see paragraph 19).

65. Annex VI presents the monitoring of recommendations of the February 2014 technical assistance mission on balance of payments and IIP.

Costa Rica: Balance of Payments and International Investment Position Statistics (October 13-23, 2014)
Author: International Monetary Fund. Statistics Dept.