Hun Sen dismisses budget deficit claims, cites $2.5B treasury cash

Synopsis: Defending the government’s fiscal management, the Senate President says that Cambodia’s financial position remains strong, backed by a monthly budget surplus that fully covers public spending and maintains healthy treasury reserves.

Senate President Hun Sen Wednesday rejected claims of a state budget shortage, saying the treasury holds about $2.5 billion in cash, supported by over $5 billion in revenue collected during the first nine months, while the government’s monthly salary bill is about $230 million.

On his official Facebook account, Mr Hun Sen wrote that he should not argue with those living overseas, describing them as the “destroyers of the nation”. “But if I do not explain the issue, citizens could be confused,” he said.

He recalled that when he was Prime Minister, whenever the government printed new banknotes and put them into circulation, there were always critics claiming that the state had run out of money.

The Senate President said, “I just want to tell you that the cash in the treasury is no less than $2.5 billion, while the monthly salary expense is only $230 million.”

He explained that the government’s financial position remains strong, with monthly revenue exceeding expenses, allowing it to cover government expenditure while maintaining cash reserves in the treasury.

“Revenue for the first nine months was over $5 billion, with an average of $500 million to $600 million per month, which is more than enough to cover expenditures while maintaining cash reserves in the treasury of no less than $2.5 billion,” he said.

Referring to critics living overseas, Mr Hun Sen said that if the Royal Government were truly running out of money, the state would soon collapse, allowing them to seize the power they had long dreamed of.

The remarks came after renewed claims that the government is running out of money, following the recent issuance of new 50,000-riel and 100,000-riel banknotes, which some used to fuel speculation about the government’s financial position.

Meanwhile, Cambodia faces financial pressure from the border conflict with Thailand, which has slowed trade flows, and from external shocks that have pushed up fuel prices.

The government is also allocating funds for housing and other needs for displaced people while stepping up efforts to combat online scam operations, creating opportunities for critics to question its financial position.

On October 1, Prime Minister Hun Manet also dismissed such claims, clarifying that the new 50,000-riel and 100,000-riel banknotes were introduced to serve two major objectives.

First, he said the issuance of the new banknotes aims to enhance their aesthetic appeal and, crucially, strengthen security against counterfeiting by incorporating new technology that makes them difficult to replicate.

Second, he said the notes were issued to replace old banknotes, with the National Bank of Cambodia collecting and destroying worn-out notes while issuing new ones to replace them with the same value.

The premier also highlighted that in May, the NBC destroyed approximately $72.6 million banknotes, followed by $118.9 million in August and nearly $93 million in September alone.

Aggregating the figures from May through September this year, the total number of banknotes collected for destruction reached 435 million notes, he added.

Mr Hun Manet explained that old banknotes must be destroyed and replaced with new ones while maintaining the total volume to ensure there is neither a surplus nor a shortage.

“This issue cannot be underestimated, as it could scare the public,” he said, stressing that when the global economy is uncertain, citizens might believe such claims and actually withdraw money from banks.

-Khmer Times-