## cr1835-costaricabalanceofpayments

## Source details

**Canonical URL:** [cr1835-costaricabalanceofpayments](https://www.imf.org/-/media/files/publications/cr/2018/cr1835-costaricabalanceofpayments.pdf)

## Other formats

- [Markdown version](/-/media/files/publications/cr/2018/cr1835-costaricabalanceofpayments.pdf.md)
- [Structured JSON version](/-/media/files/publications/cr/2018/cr1835-costaricabalanceofpayments.pdf.json)

---

### Mission overview and objectives
- Technical assistance mission on balance of payments, international investment position, and secondary income visited the Central Bank of Costa Rica (BCCR) during October 13–23, 2014.
- Objective: work with External Sector Statistics Area staff and data-producing agencies to promote understanding of data requirements for external sector statistics, and provide advice on methodological and practical issues for secondary income account, CDIS, CPIS, and other topics requested by the BCCR.
- Statistical reporting is not mandated by any law; BCCR must rely on voluntary reporting from the private sector.
- Discussed issues: dissemination of Tables 1 and 2 of the Quarterly External Debt Statistics for the World Bank, recording accrued interest on public external debt, securities holdings by residents and nonresidents, and estimates in the travel account.
- Draft report and action plan provided at mission conclusion; wrap-up meeting attended by Mr. Rigoberto Torres and Ms. Isabel Matamoros.

### Action plan (reference actions and accountability)
- Agreed reference actions (special monitoring during implementation):
  - Use information from the BCCR book entry system (SAC) to determine residency of holders of financial instruments issued by government and BCCR; produce a reconciliation table between BCCR (IIP) and Ministry of Finance (external debt) and post on the internet after authorities’ approval (Completion date: December 2014). Responsible: AESE – Payment Systems Department - SAC.
  - Produce an estimate of nonresidents’ income from real property, including income attributable to owners of vacation properties; include imputed income on the credit side of the travel account (Completion date: June 2015). Responsible: AESE.
  - Reiterate need to provide BCCR with a legal framework authorizing it to obtain information for statistical purposes from public and private sectors, or explore mechanisms under Law 7839. Desired outcome: Amended charter or use of mechanisms established by Law 7839; improve survey response rates. Responsibility: BCCR; Completion date: Indefinite but preferably as soon as possible.

### I. Secondary income accounts — findings and practices
- Most significant components quantitatively are remittances.
- BCCR Economic Statistics Area (EEE) conducts surveys including:
  - Aspectos Socioeconómicos de las Remesas Familiares (2003-2005-2008-2010-2012-2014), Immigrants and Emigrants (Biennial).
  - Border workers and temporary workers (2011-2012 and 2013-2014) (Biennial).
  - Quarterly balance of payments surveys of services and cash remittances: Bank entities (Quarterly) and Remittance companies (Quarterly).
- EEE prepared a methodological report on border workers and temporary workers in Costa Rica during 2013–2014 (Annex VII).
- Coverage includes remittances through formal and informal channels; results shared with Panama and Nicaragua for mirror records due to cross-border labor linkages.
- Field investigation concern: remittance-like monetary transfers might represent remote work or reclassification to professional/IT services; planned future work to distinguish these.
- Grants compiled by surveying beneficiary international organizations, universities, and cultural institutions; embassies consulted but response rate insignificant.
- Planned change: replace current embassy questionnaire with a form including only the grants module starting with the next survey.
- Investigation initiated to identify goods imports that represent donations.
- BCCR has a reliable estimate of income of seasonal and border workers in Costa Rica; taxes on income, social contributions, and benefits are recorded. Migrants’ remittances include an estimate of pocket remittances. Expected ability to collect information on pensions received by foreign residents who retire in Costa Rica.

### II. Implementation status of CDIS and CPIS recommendations — status and key recommendations
- Recommendations 1–2: Continue dissemination of balance of payments and IIP statistics and finalize methodological documentation — completed; information and notes posted on the BCCR website.
- Recommendation 3: Advocate for legal provision authorizing BCCR and other public entities to obtain information from economic agents — reiterated as highly important; suggested exploring mechanisms under Law 7839 (Article 5) if strengthening BCCR’s legal framework is not feasible.
- Recommendation 4: Include firms with outward FDI operations identified by PROCOMER in the balance of payments survey (BPS):
  - Largest 10 of those firms account for 93.2 percent of outward FDI reported by PROCOMER; at least five firms should be visited to improve coverage.
  - AESE contacted those firms; one refused to provide information; others to be gradually included in quarterly and annual surveys.
- Recommendation 7: Separate insurance companies’ net position in debt instruments within CDIS report for nonfinancial firms — completed; CDIS 2013 included the breakdown (Annex I).
- Recommendation 8: Compare EEE responses with BPS responses for largest 130 firms — could not be implemented because firms declined to respond; planned effort to raise awareness for next EEE (planned for end-2015).
- Recommendation 9: Review EEE directory to expand BPS directory to include firms showing foreign operations — implemented; inclusion of each firm in BPS directory completed, with another 25 firms remaining for next phase.
- Recommendation 10: Review responses to memorandum items in BPS questionnaire (external liabilities of nonfinancial private sector by residual maturity) and data from SIGADE for inclusion in Table 3 of QEDS — implemented, but contribution to debt tables was quantitatively insignificant due to limited responses.
- Legal framework deficiencies remain a major obstacle affecting AESE’s ability to obtain requested information and fully comply with BPM6 and SDDS requirements.
- Recommendation 11: Exchange data with Superintendency of Securities (SUGEVAL) regarding resident institutions serving as securities custodians to determine whether nonresidents purchase securities issued in Costa Rica by residents (primarily central government) in local currency, and assess availability of such information for external debt inclusion — identified as necessary because such purchases, if occurring, are not currently reflected in external debt.

### Coordination with SUGEVAL, SAC access, and reconciliation of public debt figures
- Roadmap to coordinate mutual requests regarding statistics provides for this point in 2016; accordingly, no progress has been made on this item that the delay cannot be attributed to the AESE.
- Presidency of the BCCR was approached to request, as an annex, the data currently required for operational purposes. If the request is granted, this would mean a significant improvement in external debt, balance of payments, and IIP statistics.
- Table 2 (Total Portfolio Value) items to be requested from SUGEVAL expressed in nominal values by residency and instrument currency classification (in colones, in Development Units, in foreign currency).
- BCCR book entry system (SAC) maintains owner information at time of issue including residency and ISIN from June 2015 forward; instruments traded on local stock exchange allow market price determination at required closing date; balances obtainable daily.
- AESE requested SAC access to obtain: issuer, instrument number, ISIN code, currency of denomination, nominal value held by Residents / Nonresidents — implementing Recommendation 2:
  - Use SAC information to determine residency of holders of financial instruments issued by government and BCCR; produce reconciliation table between BCCR IIP and Ministry of Finance external debt and post on the internet after authorities approve. Proposed exercise in Annex II.
- Discrepancy between total external debt figures published by BCCR and Ministry of Finance:
  - BCCR applies residency criteria and converts instruments to market value.
  - Ministry of Finance uses nominal value without distinguishing holder’s residency.
- Agreement: BCCR will develop a consistency table to be reviewed by Ministry of Finance and then published on the web; note explaining differences to be added to QEDS form.
- Ministry of Finance indicated procurement of SIGADE 6.0 expected in 2015; use of SIGADE 6.0 to manage domestic public sector debt (currently managed by BCCR) under consideration.
- Capture of SUGEVAL information under assets and liabilities is a priority; expected completion in second half of 2015. SUPEN securities portfolio classified by residency expected by first quarter 2016.

### Tourism statistics, ICT surveys, imputed rent estimate, and Recommendation 3
- ICT is main source for travel account; AESC processes information and provides to AESE.
- DGME provides traveler counts from passport records for arrivals and departures via airports and borders; international migration cards not yet digitized or used; same-day visitors at land borders not captured; cruise ship same-day visitors considered.
- ICT survey counts for 2013:
  - 8,435 questionnaires processed for incoming travelers, including cruise passengers.
  - Database contains a total of 1,250 interviews of travelers departing from survey locations.
  - Table 4 summary (arrivals total processed: 8,485; departures total processed: 1,250; Total Processed Entrepreneurs: 9,735) with arrival breakdowns (Santa Maria 5,681; Oduber 1,275; Land borders 557; Cruise lines 972) and departures (Santa Maria 804; Land borders 449).
- ICT eliminates all Costa Ricans entering the country from total arrivals because residency information unavailable; excludes Costa Ricans residing abroad who visit Costa Rica.
- Observed anomalies: foreigners at land borders reporting business often show stays of 90 days or close to 90 days, whereas average stay of business travelers arriving by air is six days at most.
  - Consequences: inbound tourist arrivals underestimated for Costa Ricans residing abroad and same-day visitors; inbound arrivals overestimated for land arrivals reporting business but staying ≈90 days; traveler departures may be overestimated due to inclusion of Costa Ricans residing abroad.
- AESC database analysis used to estimate imputed rent for nonresident travelers who stay in their own homes; estimate for 2013 totaled US$27 million. Proposed calculation method in Annex III.
- Recommendation 3:
  - Produce an estimate of income from real property received by nonresidents, including income attributable to owners of vacation properties. Include imputed income on the credit side of the travel account and record income in Primary Income Account, Debit 1.B.2 Investment income, 1.B.2.1 Direct investment, 1.B.2.1.1 Income on equity and investment fund shares, 1.B.2.1.1.1 Dividends and withdrawals from income of quasi-corporations (D42D), 1.B.2.1.1.1.1 Direct investor in direct investment enterprises. Prepare reconciliation table between BCCR and ICT including estimated expense imputed to those tourists.

### Methodology for imputing rent and estimating FDI in real estate (Annex III) — example and mappings
- Inputs: traveler surveys identifying owners using own homes and renters using rental housing; DGME totals by point of entry.
- Variables and ratios:
  - Variable A1: number of members of the group responding on the form.
  - Variable A2: total length of stay.
  - Variable A3: point of entry into the country.
  - Ratio 1: ratio between Variable A1 and total surveys processed for respective points of entry.
  - Variable B1, B2, B3: renters’ members, average length of stay, expense per person per day in rental housing.
  - Variable C: DGME total arrivals excluding migration for each point of entry.
- Imputed rent per person per day taken from Variable B and applied to DGME information by applying Ratio 1.
- Example calculation for hypothetical economic unit:
  - Total paid by nonresidents vacationing in rental housing: 50,000,000
  - Percentage of nonresident owners over homes sold in oceanfront area: 60 percent.
  - Total rent income effectively received by nonresidents: 30,000,000
  - Plus rent imputed to stay: 27,000.000
  - EQUALS TOTAL INCOME OF HYPOTHETICAL UNIT: 57,000.000
  - Annual maintenance expense (30 percent of Income): 17,000,000
  - NET INCOME (RECORDED AS DISTRIBUTED): 40,000,000
- Impact mapping: CREDIT / DEBIT / BALANCE impacts on CURRENT ACCOUNT (Travel, Primary income account) and FINANCIAL ACCOUNT (Assets; Currency and Deposits NOTE); net income withdrawal vs. retained earnings distinctions noted.

### Seasonal factors for services (Annex IV) — selected quarterly factors preserved
- Total services (credit):
  - 1  1.114968
  - 2  0.941566
  - 3  0.963350
  - 4  0.988788
- Total services excluding travel (credit):
  - 1  0.953925
  - 2  0.976370
  - 3  1.061736
  - 4  1.011242
- Communications services (credit):
  - 1  0.950305
  - 2  0.976235
  - 3  1.029658
  - 4  1.046862
- Financial services (credit):
  - 1  0.909734
  - 2  0.959488
  - 3  1.054397
  - 4  1.086530
- Information and IT services (credit):
  - 1  0.932103
  - 2  0.930159
  - 3  1.112536
  - 4  1.036728
- Other business services (credit):
  - 1  0.974571
  - 2  1.000996
  - 3  1.008699
  - 4  1.016231
- Transport services (credit):
  - 1  0.953114
  - 2  0.999590
  - 3  1.019561
  - 4  1.029485
- Travel (credit):
  - 1  1.255176
  - 2  0.924916
  - 3  0.882693
  - 4  0.975851
- Selected debit-side seasonal factors:
  - Communications services (debit):
    - 1  0.993932
    - 2  0.975445
    - 3  0.999066
    - 4  1.032396
  - Information and IT services (debit):
    - 1  0.926301
    - 2  0.974791
    - 3  0.967304
    - 4  1.144916
  - Other business services (debit):
    - 1  0.989483
    - 2  1.003478
    - 3  0.974419
    - 4  1.033566
  - Royalties and license fees (debit):
    - 1  0.974399
    - 2  0.968315
    - 3  0.999132
    - 4  1.060776
  - Insurance services (debit):
    - 1  0.899522
    - 2  1.111890
    - 3  0.978709
    - 4  1.021581
  - Transport services (debit):
    - 1  0.973456
    - 2  0.990808
    - 3  1.005025
    - 4  1.031614
  - Travel (debit):
    - 1  0.947216
    - 2  0.942805
    - 3  1.005118
    - 4  1.114069

### Implementation highlights, follow-up actions, and data-source coordination
- EEE survey coverage: information requested from 1,802 firms in trade, services, and manufacturing; general coverage response rate: 93 percent; response rate for external-transaction questions inferred lower.
- Seasonal behavior identification for services implemented; quarterly distribution methodology applied to improve current account estimates and reduce implicit errors and omissions (Annex IV).
- Automation of AESE reporting and interconnections ongoing; survey information received and processed through LIMESURVEY; international reserves automation expected to conclude in the year of the mission.
- Airlines: no financial leases identified; airline data quality poor; AESE to review national accounts unit estimates for airlines (June 2015).
- FDI functional-category expansion recommendation (identify immediate, indirect investors and fellow enterprises accounting for 75 percent to 80 percent of Direct Investment Survey) showed no progress; recommendation maintained (completion date December 2014).
- Public sector debt and securities monitoring:
  - SUGEVAL requests now include residency criterion; one operation (instruments in colones by Citibank acquired by nonresidents) adjusted in external debt.
  - BCCR SAC system provides issuer residency information for central government and BCCR instruments; AESE to be given access under Reference Action 2.
  - Capture of SUGEVAL and SUPEN data planned (SUGEVAL second half of 2015; SUPEN by first quarter 2016).
- DGME findings:
  - DGME has no breakdown of passengers by residency; confirmed land-arrival anomaly reflects neighboring-country citizens working in Costa Rica without formalized residency.
  - DGME will provide cumulative register of foreign retirees or pensioners residing in Costa Rica starting from 2006 upon formal request.
- Border workers and temporary workers field investigation (Annex VII):
  - Field investigation period: began November 25, 2013 and concluded March 20, 2014; total interviews conducted: 681.
  - Estimated temporary foreign workers during 2013-2014: approximately 40,886 persons (Coffee: 33,478; Melon: 1,836; Sugar cane: 4,322; Oranges: 1,250).
  - Nationality breakdown for crops: Melon, orange, and sugar cane: 100 percent Nicaraguan nationals; Coffee: approximately 69.5 percent Panamanian, 30 percent Nicaraguan, 0.5 percent Salvadoran.
  - Border workers estimates: Paso Canoas: 1,446 Panamanians and 987 Costa Ricans worked in trade; Sixaola, Limón: about 623 Panamanians worked on banana plantations.
  - Principal finding: Estimated employee compensation for the balance of payments current account for Q4 2013 through Q3 2014: $70.4 million for temporary workers and foreign border workers; $6.6 million for Costa Rican border workers in Paso Canoas.

*Source: cr1835-costaricabalanceofpayments — excerpt.*

### EXECUTIVE SUMMARY ________________________________________________________5

### EXECUTIVE SUMMARY

### Mission overview
- Technical assistance mission on balance of payments, international investment position, and secondary income visited the Central Bank of Costa Rica (BCCR) during October 13–23, 2014.
- Objective: work with External Sector Statistics Area staff and data-producing agencies to promote understanding of data requirements for external sector statistics, and provide advice on methodological and practical issues for secondary income account, CDIS, CPIS, and other topics requested by the BCCR.
- Statistical reporting is not mandated by any law; BCCR must rely on voluntary reporting from the private sector.
- Discussed issues: dissemination of Tables 1 and 2 of the Quarterly External Debt Statistics for the World Bank, recording accrued interest on public external debt, securities holdings by residents and nonresidents, and estimates in the travel account.
- Draft report and action plan provided at mission conclusion; wrap-up meeting attended by Mr. Rigoberto Torres and Ms. Isabel Matamoros.

### Action plan (reference actions and accountability)
- Agreed reference actions (special monitoring during implementation):
  - Use information from the BCCR book entry system (SAC) to determine residency of holders of financial instruments issued by government and BCCR; produce a reconciliation table between BCCR (IIP) and Ministry of Finance (external debt) and post on the internet after authorities’ approval (Completion date: December 2014). Responsible: AESE – Payment Systems Department - SAC.
  - Produce an estimate of nonresidents’ income from real property, including income attributable to owners of vacation properties; include imputed income on the credit side of the travel account (Completion date: June 2015). Responsible: AESE.
  - Reiterate need to provide BCCR with a legal framework authorizing it to obtain information for statistical purposes from public and private sectors, or explore mechanisms under Law 7839. Desired outcome: Amended charter or use of mechanisms established by Law 7839; improve survey response rates. Responsibility: BCCR; Completion date: Indefinite but preferably as soon as possible.

### I. Secondary income accounts — findings and practices
- Most significant components quantitatively are remittances.
- BCCR Economic Statistics Area (EEE) conducts surveys shown in Table 1 (BCCR Economic Statistics Area Survey) covering:
  - Aspectos Socioeconómicos de las Remesas Familiares (2003-2005-2008-2010-2012-2014), Immigrants and Emigrants (Biennial).
  - Border workers and temporary workers (2011-2012 and 2013-2014) covering multiple temporary-worker categories (Biennial).
  - Quarterly balance of payments surveys of services and cash remittances: Bank entities (Quarterly) and Remittance companies (Quarterly).
- EEE prepared a methodological report on border workers and temporary workers in Costa Rica during 2013–2014 (Annex VII).
- Coverage includes remittances through formal and informal channels; results shared with Panama and Nicaragua for mirror records due to cross-border labor linkages.
- Field investigation concern: remittance-like monetary transfers might represent remote work or reclassification to professional/IT services; planned future work to distinguish these.
- Grants compiled by surveying beneficiary international organizations, universities, and cultural institutions; embassies consulted but response rate insignificant.
- Planned change: replace current embassy questionnaire (which includes government services information considered sensitive) with a form including only the grants module; change to be implemented starting with the next survey.
- Investigation initiated to identify goods imports that represent donations.
- BCCR has a reliable estimate of income of seasonal and border workers in Costa Rica; taxes on income, social contributions, and benefits are recorded. Migrants’ remittances include an estimate of pocket remittances. Expected ability to collect information on pensions received by foreign residents who retire in Costa Rica.

### II. Implementation status of CDIS and CPIS recommendations — status and key recommendations
- Recommendations 1–2: Continue dissemination of balance of payments and IIP statistics and finalize methodological documentation — completed; information and notes posted on the BCCR website.
- Recommendation 3: Advocate for legal provision authorizing BCCR and other public entities to obtain information from economic agents — reiterated as highly important; suggested exploring mechanisms under Law 7839 (Article 5) if strengthening BCCR’s legal framework is not feasible.
  - Recommendation 1 (as restated by mission): Reiterate need to provide BCCR with a legal framework authorizing information collection from public and private sectors, with enhanced confidentiality guarantees, or use Law 7839 framework.
- Recommendation 4: Include firms with outward FDI operations identified by PROCOMER in the balance of payments survey (BPS).
  - Largest 10 of those firms account for 93.2 percent of outward FDI reported by PROCOMER; at least five firms should be visited to improve coverage.
  - AESE contacted those firms; one refused to provide information; others to be gradually included in quarterly and annual surveys.
- Recommendations 5–6: Postponed to January following year due to Services and Construction Area (ASC) work schedule; recommendation 5 (revise BPS questionnaire to require names of firms with outward FDI operations) may consider verbal collection to avoid reducing response rates given weak legal framework.
- Recommendation 7: Separate insurance companies’ net position in debt instruments within CDIS report for nonfinancial firms — completed; CDIS 2013 included the breakdown (Annex I).
- Recommendation 8: Compare EEE responses with BPS responses for largest 130 firms — could not be implemented because firms declined to respond; planned effort to raise awareness for next EEE (planned for end-2015).
- Recommendation 9: Review EEE directory to expand BPS directory to include firms showing foreign operations — implemented; inclusion of each firm in BPS directory completed, with another 25 firms remaining for next phase.
- Recommendation 10: Review responses to memorandum items in BPS questionnaire (external liabilities of nonfinancial private sector by residual maturity) and data from SIGADE for inclusion in Table 3 of QEDS — implemented, but contribution to debt tables was quantitatively insignificant due to limited responses.
- Legal framework deficiencies remain a major obstacle affecting AESE’s ability to obtain requested information and fully comply with BPM6 and SDDS requirements.
- Recommendation 11: Exchange data with Superintendency of Securities (SUGEVAL) regarding resident institutions serving as securities custodians to determine whether nonresidents purchase securities issued in Costa Rica by residents (primarily central government) in local currency, and assess availability of such information for external debt inclusion — identified as necessary because such purchases, if occurring, are not currently reflected in external debt.

*Source: https://www.imf.org/-/media/files/publications/cr/2018/cr1835-costaricabalanceofpayments.pdf*

### 16. The BCCR and SUGEVAL have a roadmap to coordinate mutual requests regarding

### 16. The BCCR and SUGEVAL have a roadmap to coordinate mutual requests regarding 

### Coordination on data requests and Table 2 (Total Portfolio Value)
- A roadmap to coordinate mutual requests regarding statistics provides for this point in 2016. Accordingly, no progress has been made on this item that the delay cannot be attributed to the AESE.
- The presidency of the [BCCR] was approached to request, as an annex, the data currently required for operational purposes. If the request is granted, this would mean a significant improvement in external debt, balance of payments, and IIP statistics.
- The information to be requested from SUGEVAL is shown in Table 2.
- Table 2. Total Portfolio Value (Note: Expressed in nominal values.)
  - Instruments issued by residents in Costa Rica — Residents / Nonresidents / Total
  - In colones
    - By the BCCR
    - By the central government
    - By public banks
    - By private banks
    - By public institutions
    - By private entities
    - Other (specify)
  - In Development Units
    - By the BCCR
    - By the central government
    - By public banks
    - By private banks
    - By public institutions
    - By private entities
    - Other (specify)
  - In foreign currency (expressed in dollars)
    - By the BCCR
    - By the central government
    - By public banks
    - By private banks
    - By public institutions
    - By private entities
    - Other (specify)

### BCCR book entry system (SAC) — data availability and Recommendation 2
- For debt instruments issued by the central government and the BCCR, the central bank’s book entry system (SAC) maintained by its Payment System Department maintains information on the owners of those instruments at the time of issue, including residency, as well as the International Securities Identification Number (ISIN) from June 2015 forward.
- Instruments are traded on the local stock exchange, so market price of each security can be determined at the required closing date. Information is maintained online; respective balances can be obtained on a daily basis.
- During the mission, the AESE formally requested that the Payment System Department provide direct access to the SAC with the following information:
  - Table 3. Report of Balances Recorded in the Book Entry System (SAC) at the Close of Each Day
    - Issuer of instrument
    - Instrument number
    - ISIN code
    - Currency of denomination
    - Nominal value held by Residents / Nonresidents
- This implements the following recommendation.
- Recommendation 2:
  - Use the information from the BCCR book entry system (SAC) to determine the residency of holders of financial instruments issued by the government and the BCCR. A reconciliation table between the debt statistics published by the BCCR (IIP) and the Ministry of Finance (external debt) will be produced and posted on the internet after the authorities approve. Proposed exercise in Annex II.

### Coordination with information sources and reconciliation of external debt figures
- Meetings were held with the Ministry of Finance Directorate General of Public Credit (DGCP), the Costa Rican Tourism Institute (ICT), SUGEVAL, and the Directorate General of Migration and Immigration (DGME).
- Discrepancy between total external debt figures published by the BCCR and the Ministry of Finance:
  - BCCR applies residency criteria (instruments issued abroad held by residents and locally issued instruments held by nonresidents) and converts instruments to market value.
  - Ministry of Finance uses nominal value without distinguishing the instrument holder’s residency.
- Agreement: BCCR would develop a consistency table between the information published by the two institutions to be reviewed by the Ministry of Finance and then published on the web; Ministry of Finance could add a link to the information. A note explaining differences should be added to the QEDS form. Actions subject to consultation with both institutions.
- Ministry of Finance indicated it had required budget appropriations and was taking administrative steps to procure SIGADE 6.0. Purchase, installation, and startup of the system are expected to occur in 2015.
- Use of SIGADE 6.0 to manage domestic public sector debt (currently managed by the BCCR) is under consideration. BCCR is independently developing the SAC, which provides access to holders of instruments at the first level and by residency.
- Coordination with SUGEF and SUGESE is proceeding and agreements are in place; SUGEVAL is following the same process and has been removed from the list of recommendations. Capture of SUGEVAL information under assets (investment and deposits of brokerage firms and investment funds) and liabilities (stock and equity investments) is the third priority and is expected to be completed in the second half of 2015.
- Details of SUPEN securities portfolio are available and classified by residency. Information from this source is expected by first quarter 2016.
- Initial request to SUTEL made in 2011 to measure the flow of investment; statistics took precedence due to lack of personnel. Recommendation: enlist support of senior management with SUTEL executives to bring the matter to a better conclusion.

### Tourism statistics, ICT surveys, imputed rent estimate, and Recommendation 3
- ICT is the main source of information for the travel account. Information is processed by the Services and Construction Statistics Area (AESC) and provided to the AESE.
- DGME provides data on number of travelers based on passport records for arrivals and departures via airports and borders; international migration cards are not yet digitized or used. As a result, same-day visitors at land borders are not captured; only cruise ship same-day visitors are considered.
- Survey counts (ICT database for 2013):
  - 8,435 questionnaires processed for incoming travelers, including cruise passengers.
  - Database contains a total of 1,250 interviews of travelers departing from survey locations.
  - Table 4. Total Surveys Comprising the Database Received from the ICT for 2013 (summary)
    - Arrivals total processed: 8,485 (Santa Maria 5,681; Oduber 1,275; Land borders 557; Cruise lines 972)
    - Departures total processed: 1,250 (Santa Maria 804; Land borders 449)
    - Total Processed Entrepreneurs: 9,735
- ICT eliminates all Costa Ricans entering the country from total arrivals because no information on travelers’ residency is available; this excludes an indeterminate number of Costa Ricans residing abroad who visit Costa Rica (spending survey for inbound tourists is administered only to foreigners). Spending survey for outbound tourists is administered to all Costa Ricans, so responses may include Costa Ricans residing abroad.
- Survey of traveler expenses at borders is administered only to persons who stay overnight. Observed anomalies: foreigners from neighboring countries reporting business often show stays of 90 days or close to 90 days, whereas average stay of business travelers arriving by air is six days at most. Consequences:
  - Inbound tourist arrivals underestimated for Costa Ricans residing abroad and same-day visitors.
  - Inbound tourist arrivals overestimated for land arrivals reporting business but staying ≈90 days (likely foreigners residing in Costa Rica illegally).
  - Traveler departures may be overestimated due to inclusion of Costa Ricans residing abroad.
- AESC database analysis was used to identify number of travelers and average stay and to compare figures for travelers who stay in rental housing to estimate imputed rent to nonresident travelers who stay in their own homes.
- To ensure consistency with BPM6 treatment (residence previously acquired by nonresident recorded as FDI), annual maintenance costs for the property are estimated as well as income of the hypothetical unit (rent effectively paid by travelers who are not homeowners and corresponding imputed rent to the owner).
- The estimate for 2013 totaled US$27 million. The proposed calculation method is presented in Annex III.
- Recommendation 3:
  - Produce an estimate of income from real property received by nonresidents. The estimate will include the income attributable to the owners of vacation properties. The imputed income will be included on the credit side of the travel account: Estimate the imputed rent for nonresident tourists who vacation in their own homes, which should be added to expenses from the ICT survey as well as the income net of domestic costs attributable to foreign direct investment in real estate. The income will be recorded in the Primary Income Account, Debit 1.B.2 Investment income, 1.B.2.1 Direct investment, 1.B.2.1.1 Income on equity and investment fund shares, 1.B.2.1.1.1 Dividends and withdrawals from income of quasi-corporations (D42D), 1.B.2.1.1.1.1 Direct investor in direct investment enterprises. Prepare a reconciliation table between the BCCR and ICT including the estimated expense imputed to those tourists for the use of their homes in Costa Rica during their vacation on the credit side of the travel account.

### Additional findings on data sources and implementation status
- SUGEVAL staff indicated brokerage firms did not have information on holdings by residency; this item would be considered in the context of the BCCR information request program for 2016. National securities depository is custodian of those securities.
- Proposed interim action: BCCR to inquire with a brokerage firm and key securities custodians to determine possibility of classifying holdings by residency according to BPM6.
- DGME has no breakdown of passengers by residency; destinations reported by residents at departure are later provided to ICT.
- DGME confirmed land-arrival anomaly (business reason, ~90-day stay) reflects citizens of neighboring countries who work in Costa Rica but have not formalized residency.
- DGME maintains cumulative register of foreign retirees or pensioners residing in Costa Rica starting from 2006; it will provide the register to the BCCR upon formal request.
- Temporary work permits: DGME believes number registered with Ministry of Labor is overestimated; border workers special documentation is being designed to enable counting.
- Implementation status highlights:
  - Recommendation 1 (manufacturing services on physical inputs owned by others): continue identifying amounts for 2012 and 2013 as done for 2011; completion date of March 2014. BCCR had identified 15 firms performing the service; estimate for 2011–2016 calculated for BPM6 publication in June 2014.
  - Additional firms identified (Roche, T.P.E.S.A., GMICR S.A., Original Mirrolure S.A.); corrections made for 2012 and following years; information base for 15 firms revised from 1999 forward.
  - Splicing of FISIM back to 1999: data and consistency reviewed; splicing of balance of payments and IIP from 1999 forward in accordance with BPM6 expected to be available by end-2014.
  - Presentation under BPM5 will be discontinued with change of base year for national accounts planned for December 2015.
  - Recommendation 2 progress re: SUPEN postponed to March 2016 (original completion date June 2014).
  - Recommendation 3 progress re: SUTEL postponed (original completion date December 2014).
  - BCCR needs coordinating mechanisms to obtain detailed information from SUGEF, SUPEN, SUGEVAL, SUGESE, and SUTEL to develop technological tools and negotiate with providers. Monetary and financial statistics, construction statistics, and external sector statistics have been automated per timetable.
  - SUGEF has established eight data blocks enabling identification by residency in all cases; AESE using specific survey for banks in interim.
  - SUGESE agreement covers balance sheet, income statement, and premiums required for national accounts, but capture by residency is complicated; AESE to continue current estimates and adjustment for volatility of expected claims.
  - No agreement yet with SUGEVAL, but availability of investment/deposit asset information and stock/equity liability information anticipated in second half of 2015.
  - SUPEN detailed securities portfolio is classified by residency; information expected by first quarter 2016.
  - SUTEL: three mobile operators identified; AESE compiled initial investment info from media but current transactions unknown. Assistance offered to SUTEL statistical staff was not accepted.

*cr1835-costaricabalanceofpayments — excerpt.*

### 49. Recommendation 4 of the balance of payments and IIP mission was to review the

### cr1835-costaricabalanceofpayments - 49. Recommendation 4 of the balance of payments and IIP mission was to review the

### EEE response rate and sector directories
- Recommendation: Review the response rate for the EEE for questions relating to external transactions, and supplement the sector business directories based on that information; AESE to revise the questions on the form (April 2014).
- Implementation findings:
  - Information requested from 1802 firms in trade, services, and manufacturing.
  - General coverage response rate: 93 percent.
  - Response rate to questions relating to external transactions: not determined; inferred to be lower than overall rate because many firms report at the aggregate level but do not provide detailed information on residency.
  - Consequence: Directory information could not be used to supplement the external statistics due to lack of residency/detail or poor quality responses.
- Action maintained: Revise EEE questionnaire to improve capture of external transactions.

### Seasonal behavior and quarterly adjustments for services
- Recommendation: Identify seasonal behavior in provision of certain services abroad to determine need for quarterly adjustments.
- Implementation:
  - Work performed on a model by type of service, resulting in a distribution at the estimation by quarters.
  - Recommendation implemented.
  - Result: Estimated information based on the new methodology provides a better approximation of the quarterly balance of the current account and implicitly reduces implicit records in the errors and omissions category.
  - Annex IV presents the results.

### Automation of AESE reporting and interconnections
- Recommendation: Continue automation of AESE reporting processes and develop tools to interconnect with sources to increase productivity and information security.
- Progress:
  - Continued cooperation with the IT Division.
  - Automation of international reserves is expected to be concluded this year.
  - Work under way on providing input for the database; information has yet to be added.
  - Survey information is received online and processed through the LIMESURVEY program.
- Status: Recommendation maintained with same completion date.

### Airlines, lease operations, and use of national accounts estimates
- Recommendation: Review EEE information regarding resident airlines, validate reported information, and determine whether operating leases were in use.
- Findings:
  - Survey responses reviewed; no financial lease operations identified.
  - Information obtained from airlines was of very poor quality.
  - Agreement with the Ministry of Finance: airlines provide a global report of worldwide operations; a ratio is applied to profits based on costs reported at the country level for tax calculation.
  - National accounts unit is working on calculating production based on aggregation of costs.
- Suggestion: AESE to review national accounts unit’s estimates for airlines to determine whether they can be used for external accounts (June 2015).

### Expanding coverage of functional category of direct investment (FDI)
- Recommendation: Specify relationships among FDI firms to expand coverage of direct investment functional category by identifying immediate, indirect investors and fellow enterprises; focus on firms accounting for 75 percent to 80 percent of the Direct Investment Survey (completion date December 2014).
- Status:
  - No progress made.
  - Recommendation maintained with same completion date.

### Visitor spending and tourism data sources
- Recommendation: Evaluate scenarios for determining visitor spending:
  - (i) Continue using current information on expenses from the ICT with greater input from the BCCR regarding stratification of the sample.
  - (ii) Consider an independent comprehensive survey by the BCCR capturing all reasons for travel; coordinate with ICT so its survey does not include spending data to avoid two sets of spending data.
- Findings:
  - AESE is underestimating traveler arrivals and overestimating traveler departures due to ICT methodology (paragraph 27).
  - BCCR is not considering an independent survey at this time.
  - ICT agreed to evaluate the effect of excluding nonresident Costa Rican travelers from figures.
- Suggestion: AESE to review this effect and, to the extent feasible, suggest ICT expand the sample (March 2015).

### Hotel and real estate foreign investment timing
- Recommendation: Coordinate with ICT to estimate timetable for foreign investment relating to expenditure according to progress of work on hotel and real estate projects; monitor hotel company transactions.
- Implementation:
  - BCCR submitting a survey to the 15 largest hotels using the services survey form to compile hotels’ transactions with nonresidents.
- Status: Recommendation implemented.

### Public sector debt recording and securities monitoring
- Recommendation: Monitor domestically issued securities purchased by nonresidents and their maturity dates (December 2014).
- Developments:
  - SUGEVAL requests now include residency criterion.
  - To date, only one operation being monitored: issuance of instruments in colones by Citibank acquired by nonresidents.
  - Adjustment made in external debt to reflect this one-time operation.
  - BCCR SAC system provides information for financial instruments issued by the central government and the BCCR; AESE will be given access under Reference Action 2 — recommendation implemented for those instruments.
  - Request made to SUGEVAL through the presidency to expand coverage to all other instruments issued by residents.
- Status: Recommendation maintained for expanding SUGEVAL coverage with same completion date.

### Commercial credits and trade-credit beneficiaries
- Recommendation: Continue adding new firms identified as beneficiaries of trade credits to the directory as research proceeds.
- Progress:
  - Forms for different samples include a question on commercial credits for direct investors and third parties.
  - Of the 1,800 firms considered, between 300 and 400 are considered the most important.
  - Those 300–400 firms were asked to provide accounting trial balances showing creation of the commercial credit account, compared with form responses.
  - Note: Recommendations about review of the EEE apply here as well (December 2014).

### Residency information from DGME and recording pensions/health registries
- Recommendation: Continue efforts with DGME to obtain visitor residency information so expansion is adequate.
- Progress: See paragraphs 35–37 for results of mission’s visit with DGME.
- Recommendation on transaction registries associated with pensions and health (December 2014):
  - Effort pending.
  - DGME provided migratory status of retiree (pensionado) or pensioner (rentista) according to arrivals, which totaled roughly 3300 persons.
  - Corresponding recording in the balance of payments is being evaluated.
  - Recommendations maintained with same completion date.

### Nonlife insurance transactions and BPM6 compliance
- Recommendation: Implement actions to facilitate estimation of nonlife insurance transactions in accordance with BPM6 guidelines.
- Implementation:
  - AESI used information available from insurance companies to make necessary estimates.
  - Recommendation implemented.
  - Table reported to the IMF applying the methodology is presented in Annex I.

### External debt reporting: Ministry of Finance note and reconciliation
- Recommendation: Ministry of Finance consider adding a note to publications indicating external debt data according to residency as well as unmatured interest accrued (December 2014).
- Development: Ministry of Finance staff indicated they would submit the proposal to authorities (see paragraph 19).
- Annex II: Proposed reconciliation table between BCCR IIP and Ministry of Finance external debt statistics. Example entry:
  - IV Qtr 2012 2,102 380 22 -50 1,750

### Annex I — CDIS inclusion and inward/outward DI position highlights
- Table excerpts (as presented):
  - World 18.809,2 16.690,1 2.119,1 0,0 2.119,1 2.542,1 423,0
  - World 22.100,7 19.457,6 2.643,0 0,1 2.642,9 3.592,2 945,8
  - Outward (World) 1.543,81.234,8309,00,0309,0338,029,0
  - Outward Debt Instruments (World) 1.839,61.513,2326,40,0326,4362,135,7
- Table labels preserved exactly as in source: "Table 1-i: Inward Direct Investment Positions, as of end-2013", "Table 1-i: Inward Direct Investment Positions, as of end-2012", "Table 1-o: Outward Direct Investment Positions, as of end-2012".

### Annex III — Methodology for imputing rent and estimating FDI in real estate
- Purpose: Estimate income imputed to nonresident property owners who stay in their own homes when vacationing in Costa Rica, and respective income from FDI in real estate.
- Key methodological elements:
  - Inputs from traveler surveys (owners using own homes; renters using rental housing).
  - Variables and ratios defined:
    - Variable A1: number of members of the group responding on the form.
    - Variable A2: total length of stay.
    - Variable A3: point of entry into the country.
    - Ratio 1: ratio between Variable A1 and total surveys processed for respective points of entry.
    - Variable B1, B2, B3: renters’ members, average length of stay, expense per person per day in rental housing.
    - Variable C: DGME total arrivals excluding migration for each point of entry.
  - Imputed rent per person per day taken from Variable B and applied to DGME information by applying Ratio 1.
- Example calculation for hypothetical economic unit:
  - Total paid by nonresidents vacationing in rental housing: 50,000,000
  - Percentage of nonresident owners over homes sold in oceanfront area: 60 percent.
  - Total rent income effectively received by nonresidents: 30,000,000
  - Plus rent imputed to stay: 27,000.000
  - EQUALS TOTAL INCOME OF HYPOTHETICAL UNIT: 57,000.000
  - Annual maintenance expense (30 percent of Income): 17,000,000
  - NET INCOME (RECORDED AS DISTRIBUTED): 40,000,000
- Impact mapping:
  - CREDIT / DEBIT / BALANCE impacts on CURRENT ACCOUNT (Travel, Primary income account) and FINANCIAL ACCOUNT (Assets; Currency and Deposits NOTE); note assumes owner withdraws net income; otherwise record in Financial Account, FDI Retained earnings.

### Annex IV — Quarterly seasonal variation calculation
- Annex IV contains calculation of quarterly seasonal variation of services (credit and debit); results referenced in paragraph 51 wherein the new quarterly distribution methodology was implemented to improve current account estimates and reduce implicit errors and omissions.

*Source: cr1835-costaricabalanceofpayments (selected paragraphs 49–65 and Annexes I–IV as provided).*

### 1. Seasonal factors for services on the credit side

### 1. Seasonal factors for services on the credit side

### 1.1 Total services
- Seasonal factors:
  - 1  1.114968
  - 2  0.941566
  - 3  0.963350
  - 4  0.988788
- Figure 1: Seasonal factors: total services

### 1.2 Total services excluding travel
- Seasonal factors:
  - 1  0.953925
  - 2  0.976370
  - 3  1.061736
  - 4  1.011242
- Figure 2: Total services excluding travel
- Chart axis labels present: 0.85, 0.90, 0.95, 1.00, 1.05, 1.10, 1.15; periods 1, 2, 3, 4

### 1.3 Communications services (credit)
- Seasonal factors:
  - 1  0.950305
  - 2  0.976235
  - 3  1.029658
  - 4  1.046862
- Figure 3: Seasonal factors: Communications services

### 1.4 Financial services (credit)
- Seasonal factors:
  - 1  0.909734
  - 2  0.959488
  - 3  1.054397
  - 4  1.086530
- Figure 4: Seasonal factors: financial services
- Chart axis labels present: 0.90, 0.92, 0.94, 0.96, 0.98, 1.00, 1.02, 1.04, 1.06, 1.08; periods 1, 2, 3, 4

### 1.5 Information and IT services (credit)
- Seasonal factors:
  - 1  0.932103
  - 2  0.930159
  - 3  1.112536
  - 4  1.036728
- Figure 5: Seasonal factors: Information and IT services

### 1.6 Other business services (credit)
- Seasonal factors:
  - 1  0.974571
  - 2  1.000996
  - 3  1.008699
  - 4  1.016231
- Figure 6: Seasonal factors: other business services
- Chart axis labels present: 0.80, 0.85, 0.90, 0.95, 1.00, 1.05, 1.10, 1.15; periods 1, 2, 3, 4

### 1.7 Transport services (credit)
- Seasonal factors:
  - 1  0.953114
  - 2  0.999590
  - 3  1.019561
  - 4  1.029485
- Figure 7: Seasonal factors: transport services

### 1.8 Travel (credit)
- Seasonal factors:
  - 1  1.255176
  - 2  0.924916
  - 3  0.882693
  - 4  0.975851
- Figure 8: Seasonal factors: Travel
- Chart axis labels present: 0.90, 0.92, 0.94, 0.96, 0.98, 1.00, 1.02, 1.04; periods 1, 2, 3, 4

### 2. Seasonal factors for services on the debit side

#### 2.1 Communications services (debit)
- Seasonal factors:
  - 1  0.993932
  - 2  0.975445
  - 3  0.999066
  - 4  1.032396
- Figure 9: Seasonal factors: Communications services
- Chart axis labels present: 0.94–1.04 range and a separate 0.00–1.40 range; periods 1, 2, 3, 4

#### 2.2 Financial services (debit)
- Figure 10: Seasonal factors: financial services
- (No numeric seasonal-factor table provided in the excerpt.)

#### 2.3 Information and IT services (debit)
- Seasonal factors:
  - 1  0.926301
  - 2  0.974791
  - 3  0.967304
  - 4  1.144916
- Figure 11: Seasonal factors: Information and IT services

#### 2.4 Other business services (debit)
- Seasonal factors:
  - 1  0.989483
  - 2  1.003478
  - 3  0.974419
  - 4  1.033566
- Figure 12: Seasonal factors: Business services
- Chart axis labels present: 0.80–1.10 range and 0.00–1.40 range; periods 1, 2, 3, 4

#### 2.5 Royalties and license fees (debit)
- Seasonal factors:
  - 1  0.974399
  - 2  0.968315
  - 3  0.999132
  - 4  1.060776
- Figure 13: Seasonal factors: Royalties and license fees

#### 2.6 Insurance services (debit)
- Seasonal factors:
  - 1  0.899522
  - 2  1.111890
  - 3  0.978709
  - 4  1.021581
- Figure 14: Seasonal factors: Insurance services
- Chart axis labels present: 0.92–1.04 and 0.94–1.04 ranges; periods 1, 2, 3, 4

#### 2.7 Transport services (debit)
- Seasonal factors:
  - 1  0.973456
  - 2  0.990808
  - 3  1.005025
  - 4  1.031614
- Figure 15: Seasonal factors: Transport services

#### 2.8 Travel (debit)
- Seasonal factors:
  - 1  0.947216
  - 2  0.942805
  - 3  1.005118
  - 4  1.114069
- Figure 16: Seasonal factors: Travel
- Chart axis labels present: 0.94–1.04 and 0.85–1.15 ranges; periods 1, 2, 3, 4

### Annex excerpts: Recommendations and field investigation highlights
- Annex V: CDIS and CPIS Mission (March 2014) — selected recommendations and statuses (examples):
  - Recommendation 1: Continue efforts toward dissemination of balance of payments and IIP statistics in accordance with BPM6 guidelines. Verifiable indicator: Publication on the BCCR website. Completion date: June 2014. Status: Complete.
  - Recommendation 4: Include firms with outward FDI operations identified by PROCOMER in the balance of payments and CDIS survey. Verifiable indicator: Directory of BPS firms. Completion date: June 2014. Status: Of the 10 that refused to provide information to the BCCR, three were included in the quarterly survey and the remainder in the annual survey.
  - Recommendation 11: Determine whether any nonresidents purchase securities issued in Costa Rica by residents in local currency and amounts/availability of information. Verifiable indicator: Report of the investigation. Completion date: September 2014. Status: Pending. Note: Likely date 2016.
- Annex VI: Technical Assistance Mission on Balance of Payments and IIP (February 2014) — selected recommendations and statuses (examples):
  - Recommendation 1: Manufacturing services on physical inputs owned by others: identify amounts for 2012 and 2013 as done for 2011. Verifiable indicator: Technical report. Completion date: March 2014. Status: Complete.
  - Recommendation 2: Request information from the Superintendency of Pensions (SUPEN). Verifiable indicator: Request made. Completion date: June 2014. Status: Pending. Postponed to March 2016.
  - Recommendation 5: Identify seasonal behavior in the provision of certain services abroad to determine the need to make the quarterly adjustment based on the results. Verifiable indicator: Technical report. Completion date: June 2014. Status: Complete.
- Annex VII: Border Workers and Temporary Workers — executive summary and key statistics:
  - Field investigation period: began November 25, 2013 and concluded March 20, 2014.
  - Total interviews conducted: 681.
  - Estimated temporary foreign workers during 2013-2014: approximately 40,886 persons.
    - Coffee: 33,478
    - Melon: 1,836
    - Sugar cane: 4,322
    - Oranges: 1,250
  - Nationality breakdown for crops:
    - Melon, orange, and sugar cane: 100 percent Nicaraguan nationals.
    - Coffee: approximately 69.5 percent Panamanian, 30 percent Nicaraguan, 0.5 percent Salvadoran.
  - Border workers estimates:
    - Paso Canoas (southern border with Panama): 1,446 Panamanians and 987 Costa Ricans worked in trade.
    - Sixaola, Limón: about 623 Panamanians worked on banana plantations.
  - Principal finding: Estimated employee compensation for the balance of payments current account for Q4 2013 through Q3 2014:
    - $70.4 million for temporary workers and foreign border workers
    - $6.6 million for Costa Rican border workers in Paso Canoas

*cr1835-costaricabalanceofpayments - 1. Seasonal factors for services on the credit side*

---


_Source: https://www.imf.org/-/media/files/publications/cr/2018/cr1835-costaricabalanceofpayments.pdf_