Significant Reduction in Integrated Debt of Mokpo City... 'Improvement in Fiscal Soundness'

Early Repayment of 60 Billion Won in Local Bonds Following Activation of Daeyang Industrial Complex Sales

[Asia Economy Honam Reporting Headquarters Reporter Jeong Seunghyun] Mokpo City, Jeonnam Province, has expressed its position to help citizens understand the city's financial situation.

According to the city on the 6th, Mokpo's integrated debt as of April is 268.4 billion KRW.

After repaying 30 billion KRW in May, it will decrease to 238.4 billion KRW, which is a 40.5% reduction compared to 400.7 billion KRW in July 2018.

Integrated debt refers to the debt for which local governments have the final obligation, combining all debts of local governments, public enterprises, and investment and contribution institutions. Types of debt include local bonds, national government burden debt, and double-entry bookkeeping debts.

In the city's case, integrated debt includes debts of Mokpo City and investment institutions such as Mokpo Daeyang Industrial Complex Co., Ltd. Local bonds include Daeyang Industrial Complex local bonds, national government burden debt includes BTL lease fees, and double-entry bookkeeping debts include temporary deposits for Sanjeong Neighborhood Park and retirement benefit reserves.

The Daeyang Industrial Complex local bonds, which raised concerns about worsening city finances, have seen early repayment of 20 billion KRW out of 80 billion KRW last year as sales of the Daeyang Industrial Complex progressed actively.

Furthermore, the second supplementary budget this year secured 40 billion KRW for repayment, with 10 billion KRW repaid last March and an additional 30 billion KRW scheduled for repayment in May.

Accordingly, the Daeyang Industrial Complex local bonds will be reduced to 20 billion KRW, and since repayment will be made using sales proceeds, all debts related to the development of the Daeyang Industrial Complex will be resolved within this year.

The financial debt of 272 billion KRW issued by Daeyang Industrial Complex Co., Ltd. was fully resolved as the remaining balance of 25 billion KRW was repaid on the 4th.

In addition, efforts have been made to improve fiscal soundness by fully repaying 27.7 billion KRW of local bonds issued before the 7th elected administration, including the International Football Center and Yangulsan Tunnel.

A city official stated, “We will continue to strive for early repayment of remaining local bonds through annual accumulation of local bond repayment funds and do our best to secure fiscal soundness.”