KUALA LUMPUR – Two statutory bodies with outstanding borrowings – the Public Sector Home Financing Board (LPPSA) and the National Higher Education Fund (PTPTN) – took on new debt of RM5 billion each in 2022 to service existing debt, a concern flagged by the Auditor-General (A-G).
LPPSA borrowed RM5 billion to “service existing loans that mature in 2022 to provide housing for civil servants.”
“This loan consists of scheduled borrowings and nine Islamic medium-term notes which are guaranteed by the Malaysian government at a rate of 3.69% to 4.81% with maturity between three to 30 years,” the A-G’s Report on Federal Agencies’ Financial Statements for 2022 said in its analysis of the agencies financial standing.
Meanwhile, PTPTN borrowed RM5 billion to fund education loans for new and existing students, as well as to finance loan renewals (roll-overs).
LPPSA in 2022 already had total loans amounting to RM62.083 billion, while PTPTN had loans of RM41.5 billion.
Socso also took out a new, 10-year loan worth RM708 million from Maybank Islamic at 4.1% interest in 2022, to build a rehabilitation centre in Ipoh. However, it was not recorded as having existing loans.
“The audit analysis finds that the new loans taken by two federal agencies are meant to service loans that have matured.
“This adds to the risk from taking on additional commitments and their ability to repay the debt.
“Loans that are not repaid according to schedule will result in debt rescheduling that will only lengthen the loan period and increase financial costs,” the audit analysis said.
LPPSA and PTPTN are also listed as the top two statutory bodies with the biggest loans in 2022.
They are in the top ten list of federal bodies in 2022 that held a total RM122.388 billion in loans, which is 99.4% of the RM123.137 billion in loans taken by 24 agencies that year.
In the top ten list, Felda is third with RM8.659 billion in loans, Perbadanan PR1MA Malaysia is fourth with RM3.792 billion, followed by Port Klang Authority (LPK) which has RM3.465 billion in loans.
Agencies with less than RM1 billion loans are Malaysian Highway Authority (LLM), Socso, Malaysian Timber Industry Board (MTIB), Railway Assets Corporation (RAC), and Bank Simpanan Nasional (BSN).
The audit analysis said that four of these ten agencies had outstanding loans from the federal government totalling RM5.338 billion, or 4.4% of the RM122.388 billion in loans.
The four that had borrowed from the federal treasury are LPK (RM3.465 billion), LLM (RM767 million), Felda (RM686 million) and RAC (RM420 million).
LPK, Felda and RAC had rescheduled their loan repayment periods until 2047, while LLM did not.
Noting this with concern, the A-G said LLM will impact the federal government, which will have to bear the financial cost of the loan for longer than necessary.
The A-G, when announcing the tabling of the 2022 report on federal agencies in Parliament yesterday, called for timely repayment of loans so as not to strain the government’s coffers. – March 7, 2024