Finance Ministry Says It’s ‘Normal’ as Program Budget Jumps $650M

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An aerial view of the Ministry of Economy and Finance posted to its Facebook page.
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The Finance Ministry deflected questions about a spike in the cost of “public finance management” from $13 million to $671 million, which an asterisk on a ministry document appears to show now incorporates debt repayments.

“The increase and decrease in the budget of programs at the ministry are normal. If a program is prioritized, we will increase the budget for it. But if it is not, we will decrease the budget accordingly,” ministry spokesman Meas Soksensan said in his full response to questions about the increase.

The Finance Ministry saw the biggest increase in the national budget this year, rising from $116 million overall last year to $789 million this year.

Soksensan previously said that the overall increase was due to moving some unclassified spending to the ministry.

Last week, the ministry held a press conference and issued further documents about the budget, including breakdowns of ministry programs.

One of the new documents lists five main programs:

  • Economic sector management: $1.5 million.
  • Financial sector management: $2.3 million.
  • Public property and revenue management: $88.9 million.
  • Public finances and expense management: $671.4 million.
  • Administration: $20.2 million.

The biggest program, public finances, is further broken down into 10 sub-categories:

  • Preparing the national budget and national expense management: $2.3 million.
  • Provincial expense management: $0.3 million.
  • Local-level expense management: $0.8 million.
  • Public procurement management: $0.8 million.
  • Cash management and public accounting: $4.6 million.
  • Financial and public expense management: $661.3 million.
  • State-private investment management: $0.1 million.
  • Investment project impact management: $0.4 million.
  • Financial inspection management: $1.0 million.
  • Supporting the reform of the public financial system: —

The public finances sub-category alone has an asterisk, which says: “The total expense also includes loan payments, which is $464.97 million.” The document contains no further details.

In 2021, borrowing costs were placed under unclassified spending and totaled $296 million. In 2022, they were still under unclassified spending at $369 million. In 2023, borrowing costs are no longer listed under unclassified spending.

It appears that this is the same line item that was moved to the ministry, seemingly increasing 57% over two years, but the wording has changed.

Im Norin, program director at Transparency International, said the Finance Ministry was likely paying back partners and countries for public debt.

The rest of the category referred to the ministry building database and support systems for other ministries and state institutions, he said.

As the Finance Ministry sees a big increase in its budget, the Health Ministry’s budget is falling from $722 million to $509 million, while the Interior Ministry’s budget is decreasing from $523 million to $460 million in spending. The budget for the Mines and Energy Ministry has been almost cut in half, from $211 million to $116 million.

Overall, Cambodia’s state spending is forecast to climb from $8.7 billion to $9.8 billion, or 13%, while revenues are anticipated to rise from $8.2 billion to $9.2 billion, or 12.5%.

With $2.85 billion in spending, or about 29% of the total, unclassified expenditures continue to be the largest category. It is primarily designated for spending at the subnational level, supplemental funding for health and education, investments, and unforeseen costs.

Investment projects are the largest single item — fluctuating from $1.1 billion in 2021 and $885 million in 2022 to $1.25 billion in 2023.

Updated on January 31 to clarify that borrowing costs are no longer listed under unclassified spending in 2023.

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