Abstract
64REPUBLIC OF PALAU
Title Page
REPUBLIC OF PALAU
STAFF REPORT FOR THE 2021 ARTICLE IV CONSULTATION—INFORMATIONAL ANNEX
November 8, 2021
Prepared By
The Asia and Pacific Department
(In consultation with other departments)
Contents
FUND RELATIONS
RELATIONS WITH OTHER INTERNATIONAL FINANCIAL INSTITUTIONS
STATISTICAL ISSUES
Fund Relations
(As of September 30, 2021)
Membership Status: Joined December 16, 1997; Article VIII
General Resources Account:
| SDR Million | Percent Quota | |
|---|---|---|
| Quota | 4.90 | 100.00 |
| Fund holdings of currency | 4.45 | 90.82 |
| Reserve position in the Fund | 0.45 | 9.20 |
| SDR Million | Percent Quota | |
|---|---|---|
| Quota | 4.90 | 100.00 |
| Fund holdings of currency | 4.45 | 90.82 |
| Reserve position in the Fund | 0.45 | 9.20 |
SDR Department:
| SDR Million | Percent Allocation | |
|---|---|---|
| Net cumulative allocations | 7.65 | 100.00 |
| Holdings | 7.24 | 94.54 |
| SDR Million | Percent Allocation | |
|---|---|---|
| Net cumulative allocations | 7.65 | 100.00 |
| Holdings | 7.24 | 94.54 |
Outstanding Purchases and Loans: None
Latest Financial Arrangements: None
Projected Payments to the Fund: None
Implementation of HIPC Initiative: Not applicable
Implementation of Multilateral Debt Relief Initiative: Not applicable
Implementation of Catastrophe Containment and Relief: Not applicable
Exchange Rate Arrangements: The de jure and de facto exchange rate arrangements are classified as no separate legal tender. The U.S. dollar is legal tender and the official currency. Palau maintains an exchange system that is free of restrictions on international payments and transfers for current and capital transactions.
Article IV Consultation: Palau is on a 24-month cycle. The 2018 Article IV Consultation discussions were held in Koror during October 25-November 7, 2018. The staff report (IMF Country Report No. 19/43) was considered by the Executive Board and the consultation concluded on February 1, 2019.
Technical Assistance: Technical assistance on tax policy, tax law, bank supervision, and statistics (GDP and government finance) has been provided mainly through PFTAC.
Resident Representative: The resident representative office in the Pacific Islands was opened in September 2010 in Suva, Fiji. Ms. Leni Hunter is the current Resident Representative.
Relations with other International Financial Institutions
Relations with other IFIs:
World Bank Group:
http://projects.worldbank.org/search?lang=en&searchTerm=&countrycode_exact=PW
Asian Development Bank: https://www.adb.org/countries/palau/main
Pacific Financial Technical Assistance Center: https://www.pftac.org/content/PFTAC/en1/countrieswp.html
Statistical Issues
| 1. Assessment of Data Adequacy for Surveillance | |
| General: Data provision has some shortcomings but is broadly adequate for surveillance. In particular, external sector statistics need to be further improved, while the coverage of fiscal and monetary statistics could be expanded. Reporting lags could be shortened. With the support of technical assistance from IMF/PFTAC and the Graduate School USA, the Office of Planning and Statistics (OPS) compiles and publishes macroeconomic data at an annual frequency. The 2012–20 Palau Statistical Yearbook provide comprehensive data on macroeconomic indicators, population, employment, housing, education, health, investment, tourism, and other economic indicators has been published on Palau’s website (https://www.palauaov.pw/executive-branch/ministries/finance/budqetandplanninq/rop-statistical-yearbooks/). The OPS continues to rely heavily on external consultants and TA. Further improvements in capacity and additional TA are needed to strengthen the quality and timeliness of macroeconomic data. | |
| National accounts: Since 2012, annual GDP estimates by production have been compiled and published, and the methodology has improved. Further areas of improvement includeincorporating the recent business surveys and compiling GDP estimates by expenditure. | |
| Price statistics: Data quality has improved, and the Consumer Price Index has been regularly published on a quarterly basis. | |
| Government finance statistics: Annual fiscal data are compiled using GFS2014 classification and were published in the 2012–20 Palau Statistical Yearbook. Further improvements include broadening the coverage beyond the central government, improving the frequency and timeliness of reporting, and including the audited accounts. Annual GFS data have not been reported to STA. | |
| Monetary and financial statistics: The depository corporations survey is unavailable since there is no central bank. TA on monetary and financial statistics could assist the authorities in developing the standardized report forms for the other depository corporations. For the Financial Access Survey (FAS), data was reported through 2017forsome key series and indicators including the two indicators (commercial bank branches per 100,000 adults and ATMs per 100,000 adults) adopted by the UN to monitor Target 8.1 Oof the Sustainable Development Goals (SDGs). |
|
| Financial Soundness Indicators: Banks have submitted quarterly financial statements, including balance sheets and profit and loss statements, to the Financial Institutions Commission (FIC) since 2009. The FIC publishes financial soundness indicators (FSIs) and balance sheet data on a quarterly basis on its website (https://www.ropfic.ora/). However, the FSIs do not include data from the National Development Bank of Palau as it remains outside the FICs supervision. | |
| External Sector Statistics: Annual data for the balance of payments and international investment position are reported according to BPM6 and published in the 2012–20 Palau Statistical Yearbook. Large errors and omissions undermine the usefulness of these statistics for surveillance. A Tourist Expenditure Survey is expected to improve tourism-related data quality. The expected implementation of the comprehensive tax reform, including the Palau Goods and Services Tax, in January 2023 could help improve data quality. | |
| II. Data Standards and Quality | |
| Palau began participating in the General Data Dissemination System in August 2013 and provides only metadata. | No data ROSC is available. |
| 1. Assessment of Data Adequacy for Surveillance | |
| General: Data provision has some shortcomings but is broadly adequate for surveillance. In particular, external sector statistics need to be further improved, while the coverage of fiscal and monetary statistics could be expanded. Reporting lags could be shortened. With the support of technical assistance from IMF/PFTAC and the Graduate School USA, the Office of Planning and Statistics (OPS) compiles and publishes macroeconomic data at an annual frequency. The 2012–20 Palau Statistical Yearbook provide comprehensive data on macroeconomic indicators, population, employment, housing, education, health, investment, tourism, and other economic indicators has been published on Palau’s website (https://www.palauaov.pw/executive-branch/ministries/finance/budqetandplanninq/rop-statistical-yearbooks/). The OPS continues to rely heavily on external consultants and TA. Further improvements in capacity and additional TA are needed to strengthen the quality and timeliness of macroeconomic data. | |
| National accounts: Since 2012, annual GDP estimates by production have been compiled and published, and the methodology has improved. Further areas of improvement includeincorporating the recent business surveys and compiling GDP estimates by expenditure. | |
| Price statistics: Data quality has improved, and the Consumer Price Index has been regularly published on a quarterly basis. | |
| Government finance statistics: Annual fiscal data are compiled using GFS2014 classification and were published in the 2012–20 Palau Statistical Yearbook. Further improvements include broadening the coverage beyond the central government, improving the frequency and timeliness of reporting, and including the audited accounts. Annual GFS data have not been reported to STA. | |
| Monetary and financial statistics: The depository corporations survey is unavailable since there is no central bank. TA on monetary and financial statistics could assist the authorities in developing the standardized report forms for the other depository corporations. For the Financial Access Survey (FAS), data was reported through 2017forsome key series and indicators including the two indicators (commercial bank branches per 100,000 adults and ATMs per 100,000 adults) adopted by the UN to monitor Target 8.1 Oof the Sustainable Development Goals (SDGs). |
|
| Financial Soundness Indicators: Banks have submitted quarterly financial statements, including balance sheets and profit and loss statements, to the Financial Institutions Commission (FIC) since 2009. The FIC publishes financial soundness indicators (FSIs) and balance sheet data on a quarterly basis on its website (https://www.ropfic.ora/). However, the FSIs do not include data from the National Development Bank of Palau as it remains outside the FICs supervision. | |
| External Sector Statistics: Annual data for the balance of payments and international investment position are reported according to BPM6 and published in the 2012–20 Palau Statistical Yearbook. Large errors and omissions undermine the usefulness of these statistics for surveillance. A Tourist Expenditure Survey is expected to improve tourism-related data quality. The expected implementation of the comprehensive tax reform, including the Palau Goods and Services Tax, in January 2023 could help improve data quality. | |
| II. Data Standards and Quality | |
| Palau began participating in the General Data Dissemination System in August 2013 and provides only metadata. | No data ROSC is available. |
Palau: Table of Common Indicators Required for Surveillance
(As of October 2021)
Daily (D), Weekly (W), Monthly (M), Quarterly (Q), Annually (A), Irregular (I), and Not Available (N/A).
The government’s U.S. dollar deposits effectively serve as reserves.
Palau has no central bank
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 central government is only the budgetary central government.
Palau: Table of Common Indicators Required for Surveillance
(As of October 2021)
| Date of latest Observation | Date Received | Frequency of Data1 | Frequency of Reporting1 | Frequency of Publication1 | |
|---|---|---|---|---|---|
| Exchange Rates (US dollar is the official currency) | N/A | N/A | N/A | N/A | N/A |
| International Reserve Assets and Reserve Liabilities of the Monetary Authorities2 | N/A | N/A | N/A | N/A | N/A |
| Reserve/Base Money3 | N/A | N/A | N/A | N/A | N/A |
| Broad Money3 | N/A | N/A | N/A | N/A | N/A |
| Central Bank Balance Sheet3 | N/A | N/A | N/A | N/A | N/A |
| Consolidated Balance Sheet of the Banking System | 3/2021 | 9/2020 | Q | Q | Q |
| Interest Rates4 | N/A | N/A | N/A | N/A | N/A |
| Consumer Price Index | 6/2021 | 6/2021 | Q | Q | Q |
| Revenue, Expenditure, Balance and Composition of Financing5—General Government | N/A | N/A | N/A | N/A | N/A |
| Revenue, Expenditure, Balance and Composition of Financing5’6—Central Government | 9/2020 | 9/2021 | A | A | A |
| Stocks of Central Government and Central Government-Guaranteed Debt | 9/2020 | 9/2021 | A | A | A |
| External Current Account Balance | 9/2020 | 9/2021 | A | A | A |
| Exports and Imports of Goods and Services | 9/2020 | 9/2021 | A | A | A |
| GDP/GNP | 9/2020 | 9/2021 | A | A | A |
| Gross External Debt | 9/2020 | 9/2021 | A | A | A |
| International Investment Position | 9/2020 | 9/2021 | A | A | A |
Daily (D), Weekly (W), Monthly (M), Quarterly (Q), Annually (A), Irregular (I), and Not Available (N/A).
The government’s U.S. dollar deposits effectively serve as reserves.
Palau has no central bank
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 central government is only the budgetary central government.
Palau: Table of Common Indicators Required for Surveillance
(As of October 2021)
| Date of latest Observation | Date Received | Frequency of Data1 | Frequency of Reporting1 | Frequency of Publication1 | |
|---|---|---|---|---|---|
| Exchange Rates (US dollar is the official currency) | N/A | N/A | N/A | N/A | N/A |
| International Reserve Assets and Reserve Liabilities of the Monetary Authorities2 | N/A | N/A | N/A | N/A | N/A |
| Reserve/Base Money3 | N/A | N/A | N/A | N/A | N/A |
| Broad Money3 | N/A | N/A | N/A | N/A | N/A |
| Central Bank Balance Sheet3 | N/A | N/A | N/A | N/A | N/A |
| Consolidated Balance Sheet of the Banking System | 3/2021 | 9/2020 | Q | Q | Q |
| Interest Rates4 | N/A | N/A | N/A | N/A | N/A |
| Consumer Price Index | 6/2021 | 6/2021 | Q | Q | Q |
| Revenue, Expenditure, Balance and Composition of Financing5—General Government | N/A | N/A | N/A | N/A | N/A |
| Revenue, Expenditure, Balance and Composition of Financing5’6—Central Government | 9/2020 | 9/2021 | A | A | A |
| Stocks of Central Government and Central Government-Guaranteed Debt | 9/2020 | 9/2021 | A | A | A |
| External Current Account Balance | 9/2020 | 9/2021 | A | A | A |
| Exports and Imports of Goods and Services | 9/2020 | 9/2021 | A | A | A |
| GDP/GNP | 9/2020 | 9/2021 | A | A | A |
| Gross External Debt | 9/2020 | 9/2021 | A | A | A |
| International Investment Position | 9/2020 | 9/2021 | A | A | A |
Daily (D), Weekly (W), Monthly (M), Quarterly (Q), Annually (A), Irregular (I), and Not Available (N/A).
The government’s U.S. dollar deposits effectively serve as reserves.
Palau has no central bank
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 central government is only the budgetary central government.