Bank of Papua New Guinea Side Questionnaire Presentation Analysis

BANK OF PAPUA NEW GUINEA BANK OF PAPUA NEW GUINEA S SIDE QUESTIONNAIRE Presenter: Ishmel Libitino Date: 20thOctober 2016

BANK OF PAPUA NEW GUINEA Disclaimer Disclaimer This presentation is based on my views & experience in dealing with the side questionnaire. This doesn t necessarily reflect my Employer s view.

BANK OF PAPUA NEW GUINEA Presentation Outline Introduction Side Questionnaires General Layout & Questions Data Processing Scope for Improvement

BANK OF PAPUA NEW GUINEA Introduction PART 2: EXPECTATIONS FOR THE YEAR 2016 Bank of PNG conducts the Business Liaison Survey, on a quarterly basis. Quarterly BLS comprises of 100 companies covering most sectors. Comprehensive, with Part 1 containing Gross sales, Total expenses, changes in inventory, while Part 2 contains expectation/forecast Timeliness and readily available information is an issue. Lack of insight into the numbers provided. 9 Given business performance to date, what do you expect to be the value of your gross sales/income, excluding interest, dividend and VAT in the year 2016. If applicable, include exports. (Only complete/fill out the appropriate /relevant box(es)) NCD X-Southern Highlands Morobe X-Momase X-Islands AROB TOTAL AGRIC/FOREST/FISH MINERAL MANUFACTURE CONSTRUCTION WHOLESALE RETAIL HOTEL TRANSPORT REAL ESTATE OTHER Total by industry 10 In percentage terms, comparing 2016 to 2015, how much do you expect your (a) prices and (b) volume of production/service to change? (a) PRICES % (b) VOLUME % 11 In percentage terms, comparing 2016 to 2015, how much do you expect (a) employee average wages and (b) material costs to change? (a) AVERAGE WAGE % (b) MATERIAL % 12 What do you expect to be the total value of your capital expenditure on new assets in the year 2016? Include alterations and additions to existing assets but exclude land acquisition. New would be defined to also include Imported second-hand machinery and equipment. Kina

BANK OF PAPUA NEW GUINEA Side Questionnaire Questionnaire is conducted with Companies on our sample survey (Business Liaison Survey), which we do conduct 6 monthly before the release of the MPS. The survey is done preferably with a face-to-face interview & provides more timely, up-to-date information & better coverage. Questionnaire targets (non-financial sectors) especially, manufacturing, wholesale & retail, transport, construction, communication and other business activities. Also gathers information on current pressing issues, FX, interest rates, Government spending, international fuel prices & its impact on businesses etc. One of the tools we use during our forecasting exercise, to help form an opinion on real sector and give some indication of the magnitude of changes per sector. The questionnaire is no longer than a page.

BANK OF PAPUA NEW GUINEA Questions & General layout Question 1: Revenue September 2015 MPS data Collection exercise Give best estimates for the following years 2015 2016 3/5 years from now BLS Company expectation/projections: Sales revenue Question 1: Revenue, price, volume, employment Give best estimates for the following years Sales revenue Due to price effect Due to price effect 2015 2016 3/5 years from now Due to volume effect Due to volume effect Respondents to give answers in percentage ( % ) terms Document reasons for movements in revenue, price, volume and employment Respondents to give answers in percentage ( % ) terms Question 2: Capital Expenditure a How much have you spent and will spend on capital expenditure in/for the following years: (PGK, rounded to the nearest thousand or million) Document reasons for movements in revenue, price, volume and employment 2015 2016 3/5 years from now Building Machine/equipment Other * rough estimates are fine How are you financing your capital expenditures? Own Cash On shore borrowing Off shore borrowing Others b Please give details: Question 2: Capital Expenditure How much have you spent and will spend on capital expenditure in/for the following years: Question 3: Employment Do you expect any major shifts/change in your number of employees this year or next, and what will cause these movements? (PGK, rounded to the nearest thousand or million) 2015 2016 3/5 years from now 2015 2016 3/5 years from now * Proceed to side OHESRT Question 4: Price Building How many days does it take for you to obtain foreign currency once you place an order? How long did it take previously (before the trading band)? a Machine/equipment What are your expectations with regard to your import orders (e.g. size): b Other 2015 2016 3/5 years from now Increase Stay the same Decline * rough estimates are fine In pricing your product(s)/service, what factors do you consider: c 2015 2016 3/5 years from now Exchange rate movements 1 *Cost of inputs/Supplier's Price 2 Utility Cost 3 Rentals 4 Question 3: Employment Competition 5 Other factors 6 please specifiy (Specifiy in order from most severe to less severe) * For wholesalers and retailers this applies to their COGS while for manufacturing and the other sectors, this question applies to their input costs. Ask for % movements 1 been the most severe Do you expect any major shifts/change in your number of employees this year or next, and what will cause these movements? Question 5: Competition 2015 2016 3/5 years from now Whats the level of competition like in the industry you are operating in: Jun-15 Dec-15 Very competitive 1 Competitive 2 Ok 3 Not competitive 4 Question 6: Access to credit Acess to Credit/Finance 1 Too tight 2 Tight 3 Okay Jun-15 Dec-15 * Proceed to side OHESRT Question 7 (if applicable): Pacific Games What was the effect of the Pacific Games, if any, on your company? Please give details. i Quaestion 7: General business outlook How would you describe your current business condition in comparison to 2014 (improved, worsened, no change)? Please give a brief explanation. What is your general outlook for: 2016 2017 Unchanged from 2015 Positive (improvement) Negative (worsening) Contact Person Company name Date

BANK OF PAPUA NEW GUINEA Data processing All done in excel Select companies by their allocated activity Do a simple percentile breakdown using excel. E.g. Manufacturing sector. 2015 -50.0% 100.0% -15.0% 0.0% 10.0% 19.0% 44.0% 100.0% 2016 30.0% 50.0% 34.0% 38.0% 40.0% 42.0% 46.0% 48.0% 2017 50.0% 50.0% 50.0% 50.0% 50.0% 50.0% 50.0% 50.0% Min Max 20 40 50 60 80 90 Manufacturing Judgement & experience, rough idea about the composition the companies is as good as anything, while accounting for other indicators. Officer Reports on visits help fill in the gaps

BANK OF PAPUA NEW GUINEA August 2016 Scope for Improvements Tracking individual units and their expectations Actual Weighting of companies Updating with new companies

BANK OF PAPUA NEW GUINEA Discussion and Presentation End