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BAD GOVERNMENT LOANS MADE PNGBC OBSOLETE, BSP ON THE VERGE OF REPEATING HISTORY

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by MICHAEL J PASSINGAN Bank South Pacific is increasingly propping up the corrupt and financially compromised O’Neill Regime, exposing itself to higher and higher risk and putting itself outside its prudential guidelines. Prime Minister Peter O’Neill, who as head of PNG Banking Corporation drove the bank into bankruptcy, forcing its merger with BSP, has been pressuring BSP to lend more and more money to his Government and his failing SOEs. Since Mr O’Neill took Government midway through 2011, BSP’s lending to the Government and Public Authorities has exploded. At the same time corruption, waste and mismanagement within Government – especially in SOEs under Minister Ben Micah – reached record levels. And it continues to increase. In 2010 BSP;’s accounts showed it had a negligible K116 million in loans to Government and Public Authorities, or 3% of its portfolio. As at 31 December 2014 (the latest full-year BSP accounts available) the bank had K1.12 billion in loans to Gov