The Q1 bulletin released by SSI showed that the State Treasury had issued VND69.469 trillion worth of bonds by the end of March, while the amount of money disbursed for public investment projects was VND49.8 trillion. This means that VND19.669 trillion worth of capital mobilized in Q1 remains unspent.

Another report of SSI showed that by the end of 2018, the amount of money deposited by the State Treasury at Vietcombank, BIDV and VietinBank had reached VND216.7 trillion.

The total amount of deposited money, thus, had reached VND235.669 trillion by the end of Q1. However, Tien Phong newspaper cited its sources as reporting that the real amount of undisbursed money is much higher. “It should not be less than VND400 trillion,” the source said.

Treasury bonds are one of the types of government bonds and a short-term debt obligation issued by the State Treasury. The bond is issued to mobilize idle money from the market to cover a temporary deficit of the state budget.

Government investors use treasury bonds to regulate payments of the banking system, aiming at currency control.

A report of the State Treasury showed that by the end of January, only 85 percent of the 2018 disbursement plan had been implemented, with VND342.177 trillion disbursed.

As the disbursement rate is low, the State Treasury had to deposit unspent money at banks. While waiting for the money disbursement, the State has to pay interest for the capital. In other words, the disbursement at a snail’s speed will increase the capital cost.

PM Nguyen Xuan Phuc at the government’s regular meeting in March also noted the slow disbursement, requesting some ministries and branches to take drastic measures to speed up the disbursement.

At a press conference session on April 5, the Ministry of Finance also informed that the disbursement rate in Q1 was only 11 percent of estimates.

Four ministries and 21 localities saw a disbursement rate of over 20 percent, while the figures were less than one percent for other 27 other ministries and one locality. These included the Ministry of Industry and Trade, Ministry of Construction, Hanoi and HCMC National Universities.

Nguyen Minh Phong, a respected economist, said the move of the Treasury mobilizing capital from the public and depositing the capital in banks for a modest interest rate is “like a snake which eats its own tail”.

In 2018, the Treasury initially planned to seek VND200 trillion worth of capital through bond issuance, and then reduced it to VND175 trillion. Meanwhile, the real amount of capital found was VND165.797 trillion.

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