Finance ministry responds to NA members on debt repayment progress

The government is on track to meet its mid-year debt repayment goals despite concerns raised by members of the National Assembly (NA) over lower-than-expected figures when compared to the annual plan.
Responding to questions from lawmakers on June 10, Minister of Finance Santiphab Phomvihane clarified that progress in repaying debts remains in line with expectations, and significant portions of debt obligations are scheduled for the latter half of the year.

Finance Minister Mr Santiphab Phomvihane responds to questions raised by lawmakers at the NA session on Tuesday.

The Minister responded to concerns from lawmakers that debt repayments in the first six months of 2025 had reached only 13.54 percent of the annual plan.
He clarified that this figure referred specifically to domestic debt, and did not reflect the overall progress in repayments, which is projected to reach 33.54 percent of the annual target by the end of June.
Mr Santiphab explained that in the first five months of 2025 alone, the actual repayment of domestic debt accounted for 22.54 percent of the annual plan, or 64.94 percent of the target for the first half of the year, amounting to about 13,796 billion kip.
By the end of June, total repayments are expected to reach 20,525 billion kip, representing 96.61 percent of the six-month plan, he told the NA members.
Although the mid-year results are in line with expectations, Mr Santiphab noted that the progress in repayments appears low compared to the annual plan because a significant portion of debt is scheduled to mature in the second half of the year.
Additionally, delays in documentation from some bondholders have hindered the redemption of matured domestic bonds.
In terms of debt recovery efforts, the Ministry of Finance retrieved around 631 billion kip in the first half of 2025, equivalent to 25 percent of the yearly recovery target of 2,500 billion kip.
This includes 537 billion kip in repayments from state enterprises, 86 billion kip in non-performing loans from two banks, and eight billion kip from guarantee fees.
The Ministry estimates that only 50 percent of the target may be achieved by the year-end, largely due to underperformance by major enterprises such as Electricité du Laos (EDL).
Mr Santiphab emphasised that in the years to come, the ministry will intensify on-site monitoring and enforcement of debt recovery, with a particular focus on EDL.
The government plans to restructure EDL’s debt, leveraging periodic electricity pricing adjustments to improve the enterprise’s financial capacity and enable it to meet its repayment obligations to both the government and foreign lenders.
The Ministry of Finance reaffirmed the government’s commitment to addressing domestic and foreign debt obligations while minimising new borrowing through improved loan recovery and stronger fiscal discipline.
Other urgent issues being debated and discussed at the ongoing NA session, which will last until June 26, are mostly focused on tackling economic challenges related to improving people’s livelihoods and sustainable economic growth.

By Bounfaeng Phaymanivong
 (Latest Update June 12, 2025)