The MP in his statement claims that government institutions have borrowed more than LKR 1 trillion by December 2021. FactCheck.lk interprets the MP as referring to State Owned Enterprises (SOEs), where the loan book liability is not reflected in the central government accounts.
FactCheck.lk was not able to find a full account of SOE loans in any published document. However, the Ministry of Finance (MoF) reports the amount of treasury guarantees issued, which is needed to facilitate loans of SOEs. That data for this fact check was accessed from the MoF Annual Report of 2021.
Not all loans of SOEs will be supported by treasury guarantees. However, if the total value of treasury guarantees issued is above LKR 1 trillion, the MP’s statement can be regarded as true.
According to the report, in the year 2021 alone, the treasury issued LKR 905 billion in treasury guarantees for the loans of SOEs (of which LKR 725 billion [or USD 3.6 billion] was issued for Ceylon Petroleum Corporation (see Exhibit 2)).
The total outstanding amount of treasury guaranteed debt of SOEs was reported as LKR 1.5 trillion (see Exhibit 1). This supports the MP’s claim that the total outstanding debt was above LKR 1 trillion by end 2021.
Therefore, we classify the MP’s statement as TRUE.
*FactCheck.lk’s verdict is based on the most recent information that is publicly accessible. As with every fact check, if new information becomes available, FactCheck.lk will revisit the assessment.
Exhibit 1: Outstanding treasury guaranteed debt (excluding central government debt)
Source: Annual Report (various years), Ministry of Finance
Exhibit 2: Value of Treasury Guarantees issued in 2021
Source: 2021 Annual Report, Ministry of Finance
2021 Annual Report, Ministry of Finance