## 1. Samoa: Priority Recommendations

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### Summary of mission outcomes and priority recommendations
- TA mission on external sector statistics (ESS) conducted for the Central Bank of Samoa (CBS) in Apia, Samoa during November 19–30, 2018.
- Mission context:
  - Follow-up to initial mission (April 2018) under the Project to Improve ESS in the Asia–Pacific Region, funded by the Government of Japan and managed by IMF-STA and CDOT.
  - Purpose: support CBS in strengthening ESS compilation and dissemination.
- Key activities and issues addressed:
  - Piloting the International Investment Survey (IIS) and compilation of direct investment liabilities data for non-financial corporations (NFCs).
  - Verifying coverage of trade in goods data and consistency with International Merchandise Trade Statistics (IMTS) disseminated by Samoa Bureau of Statistics (SBS).
  - Assessing sources and methods used to compile exports of travel services (including preliminary results from the 2018 International Visitor Survey–IVS).
  - Reviewing sources and methods used for remittance receipts.
  - Updating and re-prioritizing the action plan.
- Staffing and resources:
  - Collection of international investment data from NFCs is a priority; reported direct investment transactions currently reflect only deposit-taking corporations data reported as part of monetary statistics.
  - An additional economist has been allocated to the ESS team (commencing 2019).
  - CBS needs to allocate sufficient staff resource to the IIS to encourage response and handle respondent questions.
- Data and dissemination schedule:
  - Schedule agreed to work toward inclusion of direct investment data in the September 2019 balance of payments data submission.
  - Direct investment position data of NFCs is the main omission in the international investment position (IIP) dataset.
  - Once IIS results are available, CBS should be able to start disseminating initial estimates of the IIP for Samoa.
- Trade in goods source change and expected impact:
  - Exports of goods in the balance of payments currently based on exchange control records; imports based on Customs data used in IMTS by SBS.
  - Mission assessed IMTS data should have better coverage than exchange control source data.
  - Using IMTS data, adjusted to the balance of payments definition, will increase exports of goods in the current account by around 10 percent in recent periods and improve consistency between goods in the balance of payments and the IMTS data published by SBS.
  - Recommendation: ESS compilers convert to using IMTS Customs data as the source of exports data starting 2019; adjust historical data at least as far back as 2014; disseminate a reconciliation table to help users understand the transition.
- Travel services:
  - Reviewed methods for deriving exports of travel services and advised how to incorporate 2018 IVS results and back-cast series.
  - 2018 IVS: number of positive responses higher than 2013–2014 interviewer-based collection; initial results considered robust.
  - When final IVS results are available, ESS compilers will need to update travel model weights used in balance of payments compilation files for 2018 and consider revising historical series (based on 2013/14 survey).
- Remittances:
  - Sources and methods for compiling remittance credits reviewed in parallel with travel services; expenditures of visitors with purpose “visiting friends and family” include donations to family/local community.
  - Alternative data sources for trade in services categories not easily captured via ITRS identified, particularly for transport and government goods and services n.i.e.
  - Survey instruments updated and ESS compilers encouraged to launch data collection in 2019.
- ESS team composition:
  - ESS compiled by a small team: two economists (also responsible for real sector statistics) and two administrative staff responsible for ITRS dataset.
  - Governor agreed to recruit a new economist in 2019 and allocate to ESS compilation team.
  - Mission assisted ESS compilers to review and re-prioritize action plan for step-by-step implementation and encouraged attendance at IMF ESS training courses and workshops.

### Priority recommendations (highlights)
- June 2019: Switch to using Customs data as the source of trade in goods exports rather than CBS exchange control records. — Responsible: CBS
- September 2019: Relaunch IIS by meeting all key direct investment enterprises; allocate individual contact points in the CBS for each enterprise; agree a timetable for survey response and follow up on late responses. — Responsible: CBS
- September 2019: Validate 2018 IVS results and incorporate in the balance of payments compilation files; adjust back data weights as required. — Responsible: CBS

### Updated Action Plan (selected high-priority milestones)
- Outcome: Source data are adequate for compilation
  - H: Switch to using Customs data as the source of trade in goods exports rather than CBS exchange control records. — Target Completion Date: June 2019
  - H: Relaunch the IIS by meeting all key direct investment enterprises; allocate individual contact points and agree timetable. — Target Completion Date: September 2019
  - H: Validate 2018 IVS results and incorporate in balance of payments compilation files; introduce new weights from the 2018 IVS when data become available in mid-2019; consider updating 2013/14 IVS weights to exclude donations. — Target Completion Date: September 2019
  - H: Review assumptions made to ITRS codes R27 and R68 by meeting with local money transfer operators (MTOs) to check for breakdown information on remittances and travel expenditure. — Target Completion Date: September 2019
  - H: Meet Samoa International Finance Authority (SIFA) to emphasize importance of collecting and providing data to the CBS (ESS and monetary data). — Target Completion Date: March 2019
  - H: Collect from SIFA detailed position data (including currency breakdowns) from the offshore banks and insurance companies. — Target Completion Date: September 2019
  - H: Compile an IMTS – balance of payments reconciliation table to clarify the transition from Customs-based trade in goods data to balance of payments figures. — Target Completion Date: December 2019
- Outcome: Staff capacity increased through training
  - H: CBS to expand capacity by recruiting additional ESS compilers and providing training to staff. — Target Completion Date: December 2019
  - Remark: CBS management approved recruiting one additional economist. New and current ESS compilers encouraged to attend future IMF ESS training courses and workshops.

### Trade in Goods — findings and recommended actions
- Key findings:
  - CBS and SBS compile exports of goods using different data sources, causing inconsistency between IMTS-basis and balance of payments-basis data.
  - CBS uses foreign exchange control records for exports, adjusted to include exports of fish and bunker sales of oil and to exclude goods for processing with no change of ownership.
  - SBS exports are based on Customs data, adjusted to include sales of fish and bunker sales; IMTS figures include goods for processing without change of ownership.
  - Both CBS and SBS derive imports from Customs data.
  - Differences between CBS and SBS figures were analyzed (Table 2).
  - Goods for processing was an important industry until 2017 when a large Japanese–owned company processing automotive wire harnesses for export closed.
  - CBS uses a fixed percentage (8.3 percent) to adjust imports from CIF to FOB valuation; this percentage was based on a study undertaken around five years ago.
  - Customs database FOB values are not validated by Customs and are not of sufficient quality to update CIF–FOB adjustment.
  - Alternative to Trade Credit and Advances (TCA) survey: consider collecting freight rates from domestic freight companies and combine with Customs import volumes to estimate overall freight costs on imports.
- Key comparative figures (values in millions of WST)
  - 2014: CBS Exports 64; SBS Exports 118; Diff -54. CBS Imports 796; SBS Imports 895; SBS – (IMTS) 821; Diff -25. Additional table values: -732; -703; -28.
  - 2015: CBS Exports 87; SBS Exports 136; Diff -49. CBS Imports 763; SBS Imports 855; SBS – (IMTS) 784; Diff -21. Additional table values: -676; -648; -28.
  - 2016: CBS Exports 93; SBS Exports 144; Diff -51. CBS Imports 801; SBS Imports 899; SBS – (IMTS) 824; Diff -23. Additional table values: -709; -681; -28.
  - 2017: CBS Exports 95; SBS Exports 112; Diff -17. CBS Imports 819; SBS Imports 901; SBS – (IMTS) 826; Diff -7. Additional table values: -724; -714; -10.
- Recommended actions:
  - Switch the source of trade in goods exports from exchange control records to Customs data to ensure better coverage and improve consistency with IMTS published by SBS. Before implementing, validate remaining differences between IMTS figures published on SBS website and detailed tables provided to CBS for balance of payments compilation. Note that Customs data will need adjustments to remove goods for processing (without change of ownership) and migrants’ goods; and to include bunker and other sales in port.
  - Review the proportion of freight on imports that is carried by Samoan transport operators and remove from imports of freight services accordingly; undertake similar adjustments for insurance on imports provided by insurance companies located in Samoa.
  - Compile an IMTS – balance of payments reconciliation table so users are clear about the transition from Customs-based estimates to balance of payments figures.
  - Aim to update the CIF–FOB adjustment every 5 years by collecting freight rates from sea and air transport operators.

### Travel — IVS implementation, findings, and recommended actions
- IVS implementation and sample:
  - IVS running throughout the calendar year 2018.
  - Up to end–June 2018, around 3,300 surveys have been completed.
  - This compares with the overall sample of 4,400 in 2013.
  - The STA projected that around 170,000 visitor arrivals will be made to Samoa in 2018 and are hoping for around 8,000 completed IVS surveys.
  - Although response rates are relatively low, the aggregate number of responses to date should be sufficient to provide expenditure data of reasonable quality.
  - Initial travel expenditure results from the new IVS are broadly in line with the CBS estimates for the first half of 2018 (projected forward from the previous 2013 survey results using changes in visitor numbers and the consumer price index (CPI)).
  - The survey continues until the end of 2018, with results available in 2019. The ESS compilers plan to incorporate the results into the new model once results are complete and validated.
- Recommended actions (IVS)
  - Introduce the new weights from the 2018 IVS when data becomes available in mid–2019, so that results can be included in the 2019 data dissemination.
  - When calculating any changes to earlier years, ESS compilers should also consider recalculating the weights from the 2013 IVS to exclude donations as an expenditure item.
- Cruise ship visitor expenditure
  - Expenditure of cruise ship visitors calculated as number of visitors × average daily expenses from IVS.
  - STA provided data to allow the model to be updated from March 2015; this data should now be supplied on a regular basis.
  - Average daily expenses for cruise ship passengers broadly in line with Caribbean cruise ship passengers.
  - Continue to liaise with the STA to formalize regular supply of data on cruise ships.
- Classification issue: family obligations vs. personal transfers
  - BPM6 paragraphs 10.86 and 10.88 define travel as consumption by the traveler; mission considers at least part of “family obligations” represents personal transfers rather than travel services because the traveler does not consume the goods and services.
  - This needs consideration when back-casting results from the 2018 survey to earlier years.
- Travel debits
  - Travel debits (expenditure of Samoan residents on trips abroad) are sourced from the ITRS.
  - Suggested that this item be reviewed during a future TA mission.

### Trade in Services — other components, ITRS, and recommended actions
- Current status:
  - CBS compiles eleven component breakdowns of trade in services, broadly in line with BPM6 requirements. Government services n.i.e. are not currently separately identified.
  - Trade in services data, apart from exports of travel services and imports of freight services, mainly derived from the ITRS.
  - Recent automation of ITRS data capture and processing allows more time for data checking and validation.
  - Known deficiencies in ITRS reporting: inaccurate classification of service transactions by respondent banks, netting procedures, and routing transactions via nonresident banks.
  - IIS designed to supplement ITRS by collecting trade in services data from direct investment enterprises (as direct investors will often use nonresident banks).
  - Reported IIS data will need to be analyzed with ITRS data to avoid potential double–counting.
- Recommended actions (trade in services)
  - Meet with the resident airline (Samoa Airways) and shipping operator (the PFL) to introduce the transport survey forms and request data from 2019 onwards.
  - Conduct the proposed government goods and services survey as a joint CBS–MOFAT exercise to encourage response from foreign diplomatic missions in Samoa.
  - Verify the assumption that 100 percent of Samoan importers are carried by nonresident transport operators, and remove the portion served by resident transport operators from freight transport debits.
- Freight services and government goods and services
  - Freight imports currently assumed equivalent to the overall CIF–FOB adjustment, implying nonresidents carry 100 percent of imports into Samoa; this is unlikely given resident sea and air operators.
  - Government goods and services n.i.e. currently reported as zero; government services may be coded in the ITRS but often not routed via the domestic banking system and therefore not captured.
  - Recommended approach: approach the Ministry of Finance to determine if funding of Samoan embassies and consulates abroad is available as a proxy for government goods and services debits.
  - For government service credits, a survey of foreign embassies was designed but not sent; sending via MOFAT could encourage response. If numbers of foreign diplomats are available regularly, a model–based approach could be introduced.

### Secondary Income — remittances: sources, assumptions, discrepancies, and actions
- Current methodology and issues:
  - Household remittance credits based on the ITRS (adjusting to exclude travel expenditure of returning Samoan visitors), and an estimate of the proportion of imports that represents transfers in kind.
  - Several ITRS codes used in estimation of household remittance flows:
    - ITRS receipt code R68 represents “family maintenance, individual or household remittances”. ESS compilers check these are household-to-household transactions but consider at least part may represent nonresident Samoans transferring funds to finance travel expenditure in advance of travelling to Samoa.
    - ITRS receipt code R27 represents “reconversion of funds, foreign currency purchase” (foreign exchange converted into WST). Current assumption: two thirds of R27 reflect transfers to Samoan households and one third reflects travel expenditure by nonresidents (the third assumed to be travel is discarded because travel exports are derived from the STA model).
    - Transfers in kind: final component of personal remittances thought to be underestimated in Customs data, so an additional adjustment of 0.8 percent of the value of total imports is included.
  - Remittances to fund churches and other NPISH are separately identified in ITRS coding.
- Key comparative figures
  - ITRS–based remittances in the balance of payments (WST 294 million) vs. HIES household-reported remittances (WST 119 million) in 2013.
  - ITRS–based remittances are almost three times higher than HIES results for 2013.
- Proposed revision and rationale
  - Proposed revision to R27 assumption: assume a maximum of one-third of R27 representing remittance receipts (rather than two-thirds).
  - Rationale:
    - Around one-third of total visitors to Samoa are visiting friends and relatives (VFR).
    - Only VFR travelers will provide remittances from nonresident visitors, suggesting at most one-third of foreign currency converted to WST is for remittances.
    - If half of that is for travel expenditure, only one-sixth remains as remittances from nonresident visitors; adding another one-sixth from Samoan residents returning implying a maximum of one-third of R27 overall.
  - Effect of revised assumption: would reduce remittances by around WST 16 million in 2017, which in turn results in lower net errors and omissions.
  - SBS undertaking a new HIES in 2018; when results are available in late 2019, comparisons and remittance assumptions should be updated.
- Recommended actions (remittances)
  - Review assumptions made to ITRS codes R27 and R68 by meeting with local MTOs to see if any information on the breakdown of remittances and travel expenditure is available.
  - Incorporate results from 2018 HIES in the remittances model once data become available.

### Foreign Direct Investment (FDI) data gaps and IIS launch
- Current status:
  - Reported direct investment transactions currently only reflect commercial banks data reported as part of the monetary statistics, together with investment in property reported to the ITRS. Data for NFCs are not available.
  - ITRS is not considered an adequate source for direct investment transactions due to routing through nonresident banks.
  - Previous missions recommended IIS be launched to capture direct investment flows, positions, and income alongside other investment flows.
  - BAS (Business Activity Survey) provides a list of companies reporting foreign ownership and variables useful to gross up IIS results.
  - Meetings with two direct investment enterprises (Digicel and Samoa Breweries) indicated willingness to comply: one company willing to provide quarterly data, the other only annual data.
- Recommended actions (FDI / IIS)
  - Launch the IIS by meeting all key enterprises. Allocate individual contact points in the CBS for each enterprise and agree timetables for responses.
  - CBS should allocate sufficient resources to IIS, visit key enterprises to explain objectives and definitions, and collect annual data for 2018 by end–August 2019 for validation and inclusion in 2019 dissemination. Where quarterly data are not provided, estimate from annual results.
  - Once direct investment liabilities position data are available, CBS should start disseminating annual IIP estimates.

### Offshore institutions and pass-through activity
- Current status and issues:
  - Offshore financial and non-financial companies not currently included in Samoa’s balance of payments due to insufficient data provided by the regulator (SIFA).
  - SIFA reports annual data for two registered offshore banks and one of the three registered insurance companies in its standard reporting format; transactions data not currently calculated due to lack of currency breakdown.
  - More than 37,000 offshore companies were registered with SIFA in June 2016; SIFA’s role has been registration rather than measuring activity.
  - CDIS counterpart data suggests substantial outward direct investment to China not reflected in Samoa’s BOP figures; this could originate from offshore companies. CDIS Guide paragraph 2.13 notes pass-through funding entities should be included in direct investment.
- Recommended step-by-step approach and actions (offshore)
  - Initially focus on offshore banks.
  - Continue to collaborate with SIFA; prioritize collection of detailed position data (including currency breakdown) from offshore banks and insurance companies so transactions can be derived from positions.
  - If no currency breakdown is available from SIFA, CBS should make assumptions on denomination of assets and liabilities rather than continue to report zero transactions.
  - Approach trustees of offshore companies to determine what information is held on their clients’ accounts.

### Officials met during the mission
- Mr. Benjamin Pereira (Assistant Governor, CBS)
- Mr. Karras Lui (Manager, Economics Department, CBS)
- Ms. Aiula Tolovaa (Assistant Manager, Economics Department, CBS)
- Mr. John Lemalu (Economist, Economics Department, CBS)
- Ms. Alaiula Abute-Ioasa (Economist, Economics Department, CBS)
- Mr. Kitiona Pogi (Manager, Research and Statistics, Samoa Tourism Authority)
- Mr. Leota Salani (Samoa Bureau of Statistics)
- Ms. Lilianetelani Hennemann (Samoa Bureau of Statistics)
- Mr. Tauvaga Etimani (Samoa Bureau of Statistics)
- Mr. Fatuatia Taua’anae (Digicel – Commercial Finance Manager)
- Mr. Ashneel Kumar (Digicel – Fiji Finance Manager)
- Ms. Aliitasi Tauialo (Samoa Breweries)

*International Monetary Fund — Samoa: Priority Recommendations (TA mission, November 19–30, 2018).*

### 1. Samoa: Priority Recommendations _____________________________________________________________ 5

### 1. Samoa: Priority Recommendations

### Summary of mission outcomes and priority recommendations
- A technical assistance (TA) mission on external sector statistics (ESS) was conducted for the Central Bank of Samoa (CBS) in Apia, Samoa during November 19–30, 2018.
- Mission context:
  - Follow-up to initial mission (April 2018) under the Project to Improve ESS in the Asia–Pacific Region, funded by the Government of Japan and managed by IMF-STA and CDOT.
  - Purpose: support CBS in strengthening ESS compilation and dissemination.
- Key activities and issues addressed:
  - Piloting the International Investment Survey (IIS) and compilation of direct investment liabilities data for non-financial corporations (NFCs).
  - Verifying coverage of trade in goods data and consistency with International Merchandise Trade Statistics (IMTS) disseminated by Samoa Bureau of Statistics (SBS).
  - Assessing sources and methods used to compile exports of travel services (including preliminary results from the 2018 International Visitor Survey–IVS).
  - Reviewing sources and methods used for remittance receipts.
  - Updating and re-prioritizing the action plan.
- Staffing and resource notes:
  - Collection of international investment data from NFCs is a priority; reported direct investment transactions currently reflect only deposit-taking corporations data reported as part of monetary statistics.
  - An additional economist has been allocated to the ESS team (commencing 2019).
  - CBS needs to allocate sufficient staff resource to the IIS to encourage response and handle respondent questions.
- Data and dissemination schedule:
  - A schedule was agreed to work toward inclusion of direct investment data in the September 2019 balance of payments data submission.
  - Direct investment position data of NFCs is the main omission in the international investment position (IIP) dataset.
  - Once IIS results are available, CBS should be able to start disseminating initial estimates of the IIP for Samoa.
- Trade in goods source change and expected impact:
  - Exports of goods in the balance of payments are currently based on exchange control records; imports are based on Customs data used in IMTS by SBS.
  - Mission assessed IMTS data should have better coverage than exchange control source data.
  - Using IMTS data, adjusted to the balance of payments definition, will increase exports of goods in the current account by around 10 percent in recent periods and improve consistency between goods in the balance of payments and the IMTS data published by SBS.
  - Recommendation: ESS compilers convert to using IMTS Customs data as the source of exports data starting 2019; adjust historical data at least as far back as 2014; disseminate a reconciliation table to help users understand the transition.
- Travel services:
  - Reviewed methods for deriving exports of travel services and advised how to incorporate 2018 IVS results and back-cast series.
  - 2018 IVS: number of positive responses higher than 2013–2014 interviewer-based collection; initial results considered robust.
  - When final IVS results are available, ESS compilers will need to update travel model weights used in balance of payments compilation files for 2018 and consider revising historical series (based on 2013/14 survey).
- Remittances:
  - Sources and methods for compiling remittance credits reviewed in parallel with travel services; expenditures of visitors with purpose “visiting friends and family” include donations to family/local community.
  - Alternative data sources for trade in services categories not easily captured via ITRS identified, particularly for transport and government goods and services n.i.e.
  - Survey instruments updated and ESS compilers encouraged to launch data collection in 2019.
- ESS team composition:
  - ESS compiled by a small team: two economists (also responsible for real sector statistics) and two administrative staff responsible for ITRS dataset.
  - Governor agreed to recruit a new economist in 2019 and allocate to ESS compilation team.
  - Mission assisted ESS compilers to review and re-prioritize action plan for step-by-step implementation and encouraged attendance at IMF ESS training courses and workshops.

### Priority recommendations (Table 1 highlights)
- June 2019: Switch to using Customs data as the source of trade in goods exports rather than CBS exchange control records. — Responsible: CBS
- September 2019: Relaunch IIS by meeting all key direct investment enterprises; allocate individual contact points in the CBS for each enterprise; agree a timetable for survey response and follow up on late responses. — Responsible: CBS
- September 2019: Validate 2018 IVS results and incorporate in the balance of payments compilation files; adjust back data weights as required. — Responsible: CBS

### Updated Action Plan (selected high-priority milestones)
- Outcome: Source data are adequate for compilation
  - H: Switch to using Customs data as the source of trade in goods exports rather than CBS exchange control records. — Target Completion Date: June 2019
  - H: Relaunch the IIS by meeting all key direct investment enterprises; allocate individual contact points and agree timetable. — Target Completion Date: September 2019
  - H: Validate 2018 IVS results and incorporate in balance of payments compilation files; introduce new weights from the 2018 IVS when data become available in mid-2019; consider updating 2013/14 IVS weights to exclude donations. — Target Completion Date: September 2019
  - H: Review assumptions made to ITRS codes R27 and R68 by meeting with local money transfer operators (MTOs) to check for breakdown information on remittances and travel expenditure. — Target Completion Date: September 2019
  - H: Meet Samoa International Finance Authority (SIFA) to emphasize importance of collecting and providing data to the CBS (ESS and monetary data). — Target Completion Date: March 2019
  - H: Collect from SIFA detailed position data (including currency breakdowns) from the offshore banks and insurance companies. — Target Completion Date: September 2019
  - H: Compile an IMTS – balance of payments reconciliation table to clarify the transition from Customs-based trade in goods data to balance of payments figures. — Target Completion Date: December 2019
- Outcome: Staff capacity increased through training
  - H: CBS to expand capacity by recruiting additional ESS compilers and providing training to staff. — Target Completion Date: December 2019
  - Remark: CBS management approved recruiting one additional economist. New and current ESS compilers encouraged to attend future IMF ESS training courses and workshops.

### Trade in Goods — findings and recommended actions
- Key findings:
  - CBS and SBS compile exports of goods using different data sources, causing inconsistency between IMTS-basis and balance of payments-basis data.
  - CBS currently uses foreign exchange control records for exports, adjusted to include exports of fish and bunker sales of oil and to exclude goods for processing with no change of ownership.
  - SBS exports are based on Customs data, adjusted to include sales of fish and bunker sales; IMTS figures include goods for processing without change of ownership.
  - Both CBS and SBS derive imports from Customs data.
  - Differences between CBS and SBS figures were analyzed (Table 2). Differences in exports partly due to different sources and CBS’ exclusion of goods for processing without change of ownership.
  - Goods for processing was an important industry until 2017 when a large Japanese–owned company processing automotive wire harnesses for export closed.
  - CBS uses a fixed percentage (8.3 percent) to adjust imports from CIF to FOB valuation; this percentage was based on a study undertaken around five years ago.
  - Customs database FOB values are not validated by Customs and are not of sufficient quality to update CIF–FOB adjustment.
  - Alternative to Trade Credit and Advances (TCA) survey: consider collecting freight rates from domestic freight companies and combine with Customs import volumes to estimate overall freight costs on imports.
- Table 2: Comparison of Trade in Goods as Published in the IMTS and the Balance of Payments (values in millions of WST)
  - 2014: CBS Exports 64; SBS Exports 118; Diff -54. CBS Imports 796; SBS Imports 895; SBS – (IMTS) 821; Diff -25. Additional row values: -732; -703; -28 (as in table).
  - 2015: CBS Exports 87; SBS Exports 136; Diff -49. CBS Imports 763; SBS Imports 855; SBS – (IMTS) 784; Diff -21. Additional row values: -676; -648; -28.
  - 2016: CBS Exports 93; SBS Exports 144; Diff -51. CBS Imports 801; SBS Imports 899; SBS – (IMTS) 824; Diff -23. Additional row values: -709; -681; -28.
  - 2017: CBS Exports 95; SBS Exports 112; Diff -17. CBS Imports 819; SBS Imports 901; SBS – (IMTS) 826; Diff -7. Additional row values: -724; -714; -10.
- Recommended actions:
  - Switch the source of trade in goods exports from exchange control records to Customs data to ensure better coverage and improve consistency with IMTS published by SBS. Before implementing, validate remaining differences between IMTS figures published on SBS website and detailed tables provided to CBS for balance of payments compilation. Note that Customs data will need adjustments to remove goods for processing (without change of ownership) and migrants’ goods; and to include bunker and other sales in port.
  - Review the proportion of freight on imports that is carried by Samoan transport operators and remove from imports of freight services accordingly; undertake similar adjustments for insurance on imports provided by insurance companies located in Samoa.
  - Compile an IMTS – balance of payments reconciliation table so users are clear about the transition from Customs-based estimates to balance of payments figures.
  - Aim to update the CIF–FOB adjustment every 5 years by collecting freight rates from sea and air transport operators.

### Travel — findings and recommended actions
- Current methodology:
  - Exports of travel services (credits) are model–based: travel expenditure = number of visitors × average daily expenses × average length of stay, differentiated by market and purpose groups.
  - Visitor numbers sourced from Immigration records; landing cards include purpose of visit, nationality, place of usual residence, place of stay in Samoa, and personal information. SBS captures landing card information and uses it to gross up the travel model.
  - Length of stay is not captured in landing card analysis due to completion problems; length of stay currently based on five–yearly IVS results and included in weights for average spend by market and purpose.
- Findings from IVS comparisons:
  - Travel expenditure surveys of 2003 and 2013 were compared with initial results from 2018 IVS.
  - 2018 IVS is an email-based survey of nonresident visitors to Samoa, funded by New Zealand and using same methodology as New Zealand travel credits survey.
  - 2018 IVS: visitors provide email address on departure cards; an automated survey is emailed. This approach minimizes interviewer resource and allows visitors to reference credit/debit card information for better expenditure reporting.
  - 2018 methodology introduced for first time in 2018, replacing interviewer-based approach used previously.
  - Methodology assumes package expenditure allocation: 55 percent routed to Samoa and 45 percent flows back to country of origin; these proportions are consistent with New Zealand methodology based on an ad hoc study.
  - Note: average expenses per visit weights for European visitors seem too low from 2013, potentially due to insufficient sample in 2013/14 IVS.
- Recommendations:
  - Validate 2018 IVS results and incorporate them in the balance of payments compilation files; introduce new weights from 2018 IVS when data become available in mid-2019.
  - Consider updating historical weights (from 2013/14 IVS) to exclude donations.
  - Update travel model weights and consider revising historical series once final IVS results are available.

*International Monetary Fund — Samoa: Priority Recommendations (TA mission, November 19–30, 2018).*

### 17.      Initial indications are that the email data collection approach is working well. The IVS is

### 1wsmea2019001 - 17.      Initial indications are that the email data collection approach is working well. The IVS is

### IVS (International Visitor Survey) implementation and travel expenditure findings
- IVS is running throughout the calendar year 2018.
- Up to end–June 2018, around 3,300 surveys have been completed.
- This compares with the overall sample of 4,400 in 2013.
- The STA projected that around 170,000 visitor arrivals will be made to Samoa in 2018 and are hoping for around 8,000 completed IVS surveys.
- Although response rates are relatively low, the aggregate number of responses to date should be sufficient to provide expenditure data of reasonable quality.
- Initial travel expenditure results from the new IVS are broadly in line with the CBS estimates for the first half of 2018 (projected forward from the previous 2013 survey results using changes in visitor numbers and the consumer price index (CPI)).
- The survey continues until the end of 2018, with results available in 2019. The ESS compilers plan to incorporate the results into the new model once results are complete and validated.

Recommended actions (IVS)
- Introduce the new weights from the 2018 IVS when data becomes available in mid–2019, so that results can be included in the 2019 data dissemination.
- When calculating any changes to earlier years, ESS compilers should also consider recalculating the weights from the 2013 IVS to exclude donations as an expenditure item.

### Cruise ship visitor expenditure
- Expenditure of cruise ship visitors is calculated as the number of visitors multiplied by the average daily expenses for all visitors from the IVS.
- STA provided data to allow the model to be updated from March 2015; this data should now be supplied on a regular basis.
- The average daily expenses for cruise ship passengers is broadly in line with the daily expenses per visitor of cruise ships in the Caribbean.
- Continue to liaise with the STA to formalize regular supply of data on cruise ships.

### Classification issue: family obligations vs. personal transfers
- Previous interviewer–based visitor surveys included “family obligations” in travel expenditure.
- BPM6 paragraphs 10.86 and 10.88 define travel as consumption by the traveler; the mission considers at least part of “family obligations” represents personal transfers rather than travel services because the traveler does not consume the goods and services.
- This issue needs to be considered when back-casting the results from the 2018 survey to earlier years.

### Travel debits
- Travel debits (expenditure of Samoan residents on trips abroad) are sourced from the ITRS.
- Suggested that this item be reviewed during a future TA mission.

### Other trade in services components and data sources
- CBS compiles eleven component breakdown of trade in services, broadly in line with BPM6 requirements. Government services n.i.e. are not currently separately identified.
- Trade in services data, apart from exports of travel services and imports of freight services, are mainly derived from the ITRS.
- Recent automation of ITRS data capture and processing allows more time for data checking and validation.
- Known deficiencies in ITRS reporting: inaccurate classification of service transactions by respondent banks, netting procedures, and routing transactions via nonresident banks.
- IIS is designed to supplement ITRS by collecting trade in services data from direct investment enterprises (as direct investors will often use nonresident banks).
- Reported IIS data will need to be analyzed with ITRS data to avoid potential double–counting.

Recommended actions (trade in services)
- Meet with the resident airline (Samoa Airways) and shipping operator (the PFL) to introduce the transport survey forms and request data from 2019 onwards.
- Conduct the proposed government goods and services survey as a joint CBS–MOFAT exercise to encourage response from foreign diplomatic missions in Samoa.
- Verify the assumption that 100 percent of Samoan importers are carried by nonresident transport operators, and remove the portion served by resident transport operators from freight transport debits.

### Freight services and government goods and services
- Freight imports are assumed to be equivalent to the overall CIF–FOB adjustment, implying that nonresidents carry 100 percent of imports into Samoa; this assumption seems unlikely given resident sea and air operators.
- Government goods and services n.i.e. are currently reported as zero. Government services may be coded in the ITRS but often not routed via the domestic banking system and therefore not captured.
- Recommended approach: approach the Ministry of Finance to determine if the funding of Samoan embassies and consulates abroad is available as a proxy for government goods and services debits.
- For government service credits, a survey of foreign embassies was designed but not sent; sending via MOFAT could encourage response. If numbers of foreign diplomats are available regularly, a model–based approach could be introduced.

### Secondary income — remittances: sources, assumptions, and discrepancies
- Household remittance credits are based on the ITRS (adjusting to exclude travel expenditure of returning Samoan visitors), and an estimate of the proportion of imports that represents transfers in kind.
- Several ITRS codes used in estimation of household remittance flows:
  - ITRS receipt code R68 represents “family maintenance, individual or household remittances”. ESS compilers check these are household-to-household transactions but consider at least part may represent nonresident Samoans transferring funds to finance travel expenditure in advance of travelling to Samoa.
  - ITRS receipt code R27 represents “reconversion of funds, foreign currency purchase” (foreign exchange converted into WST). Current assumption: two thirds of R27 reflect transfers to Samoan households and one third reflects travel expenditure by nonresidents (the third assumed to be travel is discarded because travel exports are derived from the STA model).
  - Transfers in kind: final component of personal remittances thought to be underestimated in Customs data, so an additional adjustment of 0.8 percent of the value of total imports is included.
- Remittances to fund churches and other NPISH are separately identified in ITRS coding.

Key comparative figures (HIES vs. ITRS/BOP)
- ITRS–based remittances in the balance of payments (WST 294 million) vs. HIES household-reported remittances (WST 119 million) in 2013.
- ITRS–based remittances are almost three times higher than HIES results for 2013.
- Proposed revision to R27 assumption: assume a maximum of one-third of R27 representing remittance receipts (rather than two-thirds). Rationale:
  - Around one-third of total visitors to Samoa are visiting friends and relatives (VFR).
  - Only VFR travelers will provide remittances from nonresident visitors, suggesting at most one-third of foreign currency converted to WST is for remittances.
  - If half of that is for travel expenditure, only one-sixth remains as remittances from nonresident visitors; adding another one-sixth from Samoan residents returning implying a maximum of one-third of R27 overall.
- Effect of revised assumption: would reduce remittances by around WST 16 million in 2017, which in turn results in lower net errors and omissions.
- SBS undertaking a new HIES in 2018; when results are available in late 2019, comparisons and remittance assumptions should be updated.

Recommended actions (remittances)
- Review assumptions made to ITRS codes R27 and R68 by meeting with local MTOs to see if any information on the breakdown of remittances and travel expenditure is available.
- Incorporate results from 2018 HIES in the remittances model once data become available.

### Foreign Direct Investment (FDI) data gaps and IIS launch
- Reported direct investment transactions currently only reflect commercial banks data reported as part of the monetary statistics, together with investment in property reported to the ITRS. Data for NFCs are not available.
- ITRS is not considered an adequate source for direct investment transactions due to routing through nonresident banks.
- Previous missions recommended IIS be launched to capture direct investment flows, positions, and income alongside other investment flows.
- BAS (Business Activity Survey) provides a list of companies reporting foreign ownership and variables useful to gross up IIS results.
- Meetings with two direct investment enterprises (Digicel and Samoa Breweries) indicated willingness to comply: one company willing to provide quarterly data, the other only annual data.
- CBS should allocate sufficient resources to IIS, visit key enterprises to explain objectives and definitions, and collect annual data for 2018 by end–August 2019 for validation and inclusion in 2019 dissemination. Where quarterly data are not provided, estimate from annual results.

Recommended actions (FDI / IIS)
- Launch the IIS by meeting all key enterprises. Allocate individual contact points in the CBS for each enterprise and agree timetables for responses.
- Once direct investment liabilities position data are available, CBS should start disseminating annual IIP estimates.

### Offshore institutions and pass-through activity
- Offshore financial and non-financial companies are not currently included in Samoa’s balance of payments due to insufficient data provided by the regulator (SIFA).
- SIFA reports annual data for two registered offshore banks and one of the three registered insurance companies in its standard reporting format; transactions data are not currently calculated due to lack of currency breakdown.
- More than 37,000 offshore companies were registered with SIFA in June 2016; SIFA’s role has been registration rather than measuring activity.
- CDIS counterpart data suggests substantial outward direct investment to China not reflected in Samoa’s BOP figures; this could originate from offshore companies. CDIS Guide paragraph 2.13 notes pass-through funding entities should be included in direct investment.
- Recommended step-by-step approach: initially focus on offshore banks. As international reporting requirements evolve, SIFA and trustees will likely need to expand data collection.

Recommended actions (offshore)
- Continue to collaborate with SIFA; prioritize collection of detailed position data (including currency breakdown) from offshore banks and insurance companies so transactions can be derived from positions.
- If no currency breakdown is available from SIFA, CBS should make assumptions on denomination of assets and liabilities rather than continue to report zero transactions.
- Approach trustees of offshore companies to determine what information is held on their clients’ accounts.

### Officials met during the mission
- List of officials met includes: Mr. Benjamin Pereira (Assistant Governor, CBS); Mr. Karras Lui (Manager, Economics Department, CBS); Ms. Aiula Tolovaa (Assistant Manager, Economics Department, CBS); Mr. John Lemalu (Economist, Economics Department, CBS); Ms. Alaiula Abute-Ioasa (Economist, Economics Department, CBS); Mr. Kitiona Pogi (Manager, Research and Statistics, Samoa Tourism Authority); Mr. Leota Salani (Samoa Bureau of Statistics); Ms. Lilianetelani Hennemann (Samoa Bureau of Statistics); Mr. Tauvaga Etimani (Samoa Bureau of Statistics); Mr. Fatuatia Taua’anae (Digicel – Commercial Finance Manager); Mr. Ashneel Kumar (Digicel – Fiji Finance Manager); Ms. Aliitasi Tauialo (Samoa Breweries).

*Source: 1wsmea2019001 - extract from IMF mission report*

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_Source: https://www.imf.org/-/media/files/publications/cr/2019/1wsmea2019001.pdf_