BSP: 2015 tough year for business

 BANK of South Pacific says 2015 had been a challenging year for businesses in the country because of the impact of low commodity prices.

In its Pacific Economic Market Insight report, the bank noted that this was worsened by the untimely policy responses in the country.

The bank said despite business confidence and optimism at the beginning of the year, 2015 proved to be challenging and tough.

The bank noted that some of the concerns for businesses included the foreign exchange margin setting and its impact on the availability of foreign currency, the temporary suspension of Ok Tedi Mining Ltd, mine site disruptions at Porgera and Hidden Valley, moderation in property valuations and a slight decline in market yields. BSP said the PNG LNG construction phase had also impacted business spin-offs as well.

But the bank said BSP acquired Westpac’s Pacific operations for A$125m (K265m), while Kina Group of Companies took over Maybank for A$120.7m (K255m) during the year.

Meanwhile BSP also noted that the Government faced mounting fiscal challenges in 2015. It said the Government responded well – although late – to instil discipline. 

The bank said the Supplementary budget identified expenditure cuts of about K1.4b and additional revenue of K1.1b, mainly from Internal Revenue Commission and state-owned entities.