Ensuring effective use of loan capital, limiting public debt risks

Photo caption — Minister of Finance Nguyen Van Thang explained and clarified a number of issues raised by National Assembly deputies. Photo: Doan Tan/VNA

Project screening

Many delegates expressed their high approval for the necessity of amending and supplementing the Law on Public Debt Management, saying that the completion of the law this time is consistent with the requirements of tightening financial and budgetary discipline, strictly controlling public debt, enhancing accountability and meeting the requirements of international economic integration. The draft demonstrates the great efforts of the drafting agency in making transparent the process of borrowing, using and repaying public debt; at the same time, clarifying the authority of agencies in negotiating, signing and managing ODA loans and foreign preferential loans, meeting the requirements of modern financial management, integration and transparency.

Regarding the addition of Clause 6 “All debt obligations of the Government are treated equally” in Article 5 (principles of public debt management), delegate To Ai Vang ( Can Tho ) said that this provision demonstrates the Government’s commitment to the ability and responsibility to repay debt according to the principle of equal treatment, which is also one of the important criteria that international credit rating organizations use to assess a country’s debt risk profile. Therefore, legalizing the above provision is very necessary to help the Government easily mobilize capital in the coming time.

However, to ensure consistency in public debt management activities, delegates recommended that the draft Law should add a clause assigning the Government to regulate the responsibilities of the Ministry of Finance and relevant agencies in fully and promptly publicizing information on borrowed debt obligations, usage status and debt repayment status so that supervisory agencies can conveniently monitor and supervise the effective use of borrowed funds. Separate regulations on how special cases that may occur will be prioritized for handling, such as urgent debts to ensure national financial security, ensuring absolute publicity and transparency.

Delegates also proposed to strengthen the role of the State Audit and agencies under the National Assembly in auditing and supervising the implementation of debt repayment obligations, ensuring compliance with the principle of equality between creditors. Strengthening the capacity of public debt management staff, especially in negotiating and understanding international legal provisions, to apply this principle flexibly and effectively.

Agreeing with the addition of this provision to ensure transparency and national financial security, delegate Nguyen Tam Hung (Ho Chi Minh City) suggested considering more specific regulations on the scope of "equality", because in reality, there are debts that are compulsory, have preferential conditions, or have government guarantees, so the ranking of payment priority needs to be clearly classified. Adding detailed instructions will avoid conflicts when handling debts due in volatile market conditions.

Delegate Nguyen Tam Hung also said that adding Clause 6, Article 61, which stipulates the responsibility for comparing and confirming public debt information data between ministries, branches and provincial People's Committees is absolutely necessary. However, to ensure timeliness and transparency, he proposed to specify more specifically the time for comparison, the time for locking data and the reporting method (online or in writing to ensure consistency).

"In reality, the delay in reporting data from localities is the main reason for the prolonged reporting of national public debt," said delegate Hung.

Proposing to consider adding the requirement to assess the "sufficient project management capacity" of the loan proposing agencies, especially the provincial People's Committees and state-owned enterprises in Article 29 regulating the order and procedures for ODA loans and foreign preferential loans, delegate Nguyen Tam Hung explained that this is a major and important amendment. In practice, many localities propose ODA loan projects but do not have sufficient management capacity, leading to slow disbursement, capital increase, and prolonged implementation time. Clearly defining this content in Article 29 will help screen projects, ensure effective use of loan capital, and limit public debt risks.

Share debt repayment responsibility with the budget

Explaining the delegates' opinions, Minister of Finance Nguyen Van Thang said that the Law amending and supplementing a number of articles of the Law on Public Debt Management, expected to amend 23/63 articles, is closely linked to meet 3 goals: Implementing decentralization, reducing administrative procedures; consistent with the Laws that have been issued and amended (the Law on State Budget, Public Investment and the Law on International Treaties expected to be passed by the National Assembly at the same session as the 10th session); and handling difficulties in accessing and using foreign loans.

During the process of drafting the law, regarding the process of negotiating, signing, adjusting and amending ODA loans and preferential loans, the Ministry of Finance reviewed and coordinated with the Ministry of Foreign Affairs to ensure that the regulations included in the Law on Public Debt Management were consistent. The draft law focuses on regulations on the authority to negotiate, sign and ratify, thereby cutting down many intermediate administrative procedures and strongly decentralizing power. In response to the opinions of National Assembly deputies, the Ministry of Finance proposed to accept and amend, only regulating a number of specific cases of international treaties on debt, other cases already stipulated in the Law on International Treaties will not be mentioned again in the Law on Public Debt Management. At the same time, the process and documents for negotiation, signing, amendment... will be included in the Government's guiding decrees.

In addition to inheriting the principles of re-lending to localities and public service units in the 2017 Law on Public Debt Management, this Law opens additional principles of allocation to public service units and localities. Accordingly, it has accepted the direction of the National Assembly Standing Committee, assigning the Government to base on the management objectives to determine the principles that can be allocated from ODA loans and preferential loans to localities.

For public service units, based on Resolution No. 57-NQ/TW and Resolution No. 71-NQ/TW on breakthrough policies in the development of education and training, science and technology and innovation, in which public service units are one of the direct and important entities implementing these contents, an additional allocation mechanism is opened for public service units that have not yet ensured financial autonomy. Other projects of public service units are still implemented under a partial re-lending mechanism, in order to avoid creating dependence and sharing debt repayment responsibility with the budget.

Source: https://baotintuc.vn/thoi-su/bao-dam-hieu-qua-su-dung-von-vay-han-che-rui-ro-no-cong-20251118104714958.htm