## 1panea2021002 - 1.   Priority Recommendations

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### Summary of mission outcomes and priority recommendations
- A monetary and financial statistics (MFS) remote technical assistance (TA) mission from the IMF’s Statistics Department (STA) took place during June 22-July 10, 2020.
- Main objective: assist the Superintendency of Banks of Panama (SBP) in the compilation of new standard report forms for depository corporations (SRF 1SR and SRF 2SR) based on the IMF’s 2016 Monetary and Financial Statistics Manual and Compilation Guide (MFSMCG), following the introduction of a new chart of accounts by the SBP, and to agree on an improved timeline to report monetary and financial statistics to STA, on a monthly basis.
- The mission assisted the SBP to develop standardized monetary data for the National Bank of Panama (NBP) and other depository corporations (ODC) using new report forms SRF 1SR and SRF 2SR. The compilation system developed runs on an Excel file.
- DC’s financial assets account for more than 81 percent of total financial corporations sector assets. The remaining financial intermediaries and auxiliaries are classified as other financial corporations (OFC) and represent around 19 percent of the total financial system. Within the DC’s, onshore banks (bank with general license) represent more that 98 percent of total DC’s. Offshore banks (banks with international license) are included in the OFC sector.
- The SBP agreed to report offshore banks data to the National Institute of Statistics and Census (INEC) regularly for their inclusion in the OFC survey; currently offshore banks are reported to STA using SRF 4SR under INEC’s responsibility, and INEC currently undervalues the OFC sector because of the exclusion of offshore banks.
- New source data for DC (accounting catalog and additional data on loans and securities) are of good quality but scope needs to be enhanced: lacks assets and liabilities with public nonfinancial corporations information and no breakdown between central government and state and local government positions.
- The SBP will begin reporting the monthly new SRF 1SR and 2SR when requested by STA (expected by the end of 2020). Meanwhile, mission recommends using parallel reporting by banks (old and new catalog) to monitor quality.
- SBP agreed to disseminate the SRF 1SR and SRF 2SR (NBP and other depository corporations) monthly with a lag of one month after the reference period to meet SDDS requirements.
- The mission proposed a detailed one-year action plan; priority recommendations summarized in Table 1.

### Background and context
- In 2007, a TA mission assisted the SBP in compiling MFS using the SRFs. The SBP currently use these SRFs to report monetary data to STA.
- The current mission focused on compilation of new SRF data for depository corporations following the release of a new chart of accounts for banks, requiring a new compilation system and implementation of 2016 MFSMCG reporting forms (1SR and 2SR).

### Structure of the financial corporations sector (summary)
- Following the MFSMCG, the financial corporations sector in Panama should be divided in three subsectors: (1) the central bank; (2) the other depository corporations (ODC); and (3) the other financial corporations (OFC). Panama does not have a central bank; the NBP performs some central bank functions and is the fiscal agent of the government.
- Key figures (Table 2, December 2019):
  - FINANCIAL CORPORATIONS: 148,864 (Total Assets, millions of dollars) — Relative Size: 100 (in percent)
  - A. DEPOSITORY CORPORATIONS: 121080 (millions of dollars) — Relative Size: 81 (in percent)
    - 1) National Bank of Panama: 10,850 — Relative Size: 7 (in percent)
    - 2) Other Depository Corporations: 110,230 — Relative Size: 74 (in percent)
      - Onshore Banks (general license): 107,946 — Relative Size: 73 (in percent)
      - Saving and credit cooperatives: 2,236 — Relative Size: 2 (in percent)
      - Saving and credit associations: 48 — Relative Size: 0 (in percent)
      - Money market funds: (no figure provided separately)
  - B. OTHER FINANCIAL CORPORATIONS: 27,784 — Relative Size: 19 (in percent)
    - 1) Offshore banks (international license): 17,040 — Relative Size: 11 (in percent)
    - 2) Insurance Corporations: 3,230 — Relative Size: 2 (in percent)
    - 3) Finance companies: 2,209 — Relative Size: 1 (in percent)
    - 4) Non-money market funds: 2,482 — Relative Size: 2 (in percent)
    - 5) Other financial intermediaries and auxiliaries: 2,823 — Relative Size: 2 (in percent)

### A. Compilation of the Other Depository Corporations (ODC) survey — findings and data limitations
Findings
- Mission compiled the new SRF 2SR for December 2019 and developed the compilation system; mapping exercises between source data and SRF 2SR were completed.
- Preliminary compilation follows the 2016 MFSMCG; SRF 1SR and 2SR have been mapped to current SRFs enabling parallel reporting. STA expected to start collecting MFS data in the new SRFs by end-2020.
- Minimize breaks in historical ODC data by comparing old and new parallel reported data as quality stabilizes; SBP provided banks with bridging tables.
- Valuation broadly follows international accounting standards (IFRS). Provisions are identified on the asset side with negative sign; in the SRF they are included as liabilities recorded in Provisions for losses - Other – Other accounts payable. Some negotiable instruments are valued at amortized cost; no adjustments to fair values are made for SRF 1SR and 2SR compilation. The mission recommends using reported fair/market values to make valuation adjustments to relevant negotiable instruments (equity and debt securities not valued at fair/market prices).
- Source data are generally of good quality and allow monthly SRF 2SR compilation but with several data limitations.

Main source-data limitations (exact text and figures preserved)
- There is no distinction between assets and liability denominated in US dollars and in other foreign currencies. This limitation is currently not important, as the total assets and liabilities denominated in foreign currencies is insignificant (in December 2019, they represented 0.7 and 1.0 percent of total assets and liabilities of the banks, respectively).
- Identification of assets and liabilities with the public sector is limited: most assets and liabilities with the general government are classified as with the central government, i.e., not capturing possible assets and liabilities with state and local governments. Assets and liabilities with public nonfinancial corporations (NFC) are not separated from private NFC and are classified as private NFC. Mission recommended creating separate accounts to identify assets and liabilities with central government, state and local government, and public nonfinancial corporations in the following most quantitatively significant categories:
  - Account Description — Relative size (in percent) (Relative to total assets)
    - 1.006.000.000.000.000.000 Loans (assets) — 66
    - 2.001.001.001.002.000.000 Sight Deposits (liabilities) — 8
    - 2.001.001.002.002.000.000 Term Deposits (liabilities) — 20
    - 2.001.001.003.002.000.000 Saving Deposits (liabilities) — 4
- Identification of assets and liabilities with financial corporations is broken down by those with other banks and those with other financial intermediaries. MFSMCG recommends identifying assets and liabilities with ODC and OFC respectively; assets and liabilities with ODC that are not banks (financial cooperatives, money market investment funds, credit and saving associations) are misclassified as with OFC.
- No data on assets and liabilities in the form of money market shares and insurance technical reserves; these were not compiled in SRF 2SR but believed not very significant.
- Account 1.003.000.000.000.000.000 (securities investments) contains equity and debt securities; mission recommends breaking it into two accounts to separate equity investments from debt securities investments.
- Loans by sector data (átomo de crédito) does not identify loans to public nonfinancial corporations; mission recommends adding a new category on loans to public nonfinancial corporations.
- Equity and debt securities data (átomo de inversiones) does not identify securities issued by public nonfinancial corporations; mission recommends adding a new category on securities issued by public nonfinancial corporations.
- Explanation to banks to distinguish between assets and liabilities with residents and nonresidents could be improved: current instruction for assets says “where the operation takes effect” (“donde surte efecto la operación” in Spanish); recommendation is to mention residency, not nationality, as the criterion. For liabilities, instruction is to classify according to the residence of the costumer.

Recommendations (priority and deadlines preserved)
- Start compiling the SRF 1SR and 2SR using the compilation system developed during the mission and monitor data quality issues until the parallel reporting by banks ends and the new accounting catalog replaces the old one (expected by March 2021) (priority recommendation, deadline September 2020).
- Report the new SRF 1SR and 2SR to STA when requested (expected to end of 2020) (priority recommendation, deadline December 2020).
- Use data on negotiable instrument’s fair values to make valuation adjustments to equity and debt securities not valued at fair/market prices.
- Create separate accounts to identify assets and liabilities with central government, state and local government, and public nonfinancial corporations in the most quantitatively significant categories (loan assets and deposit liabilities accounts identified above). (December 2020)
- Breakdown account 1.003.000.000.000.000.000 (securities investments) in two, to capture the equity investments separately from the debt securities investments. (December 2020)
- Add a new category on loans and securities to public nonfinancial corporations in the “átomo de credito and átomo de inversiones”, respectively. (October 2020)
- Improve the explanation provided to reporting banks to distinguish between assets and liabilities with residents and nonresidents (September 2020).

### B. Compilation of the Central Bank (National Bank of Panama, NBP) survey
- Panama is a dollarized economy and does not have a central bank. The BNP is a government owned bank performing some central bank functions, notably being the fiscal agent of the government. Panama has designated the NBP as its fiscal agent and depository in its relations with the IMF.
- NBP has the same reporting requirements to the SBP as any other onshore bank. The mission used NBP data available at the SBP to compile the new SRF 1SR. Compiling SRF 1SR at the SBP saves significant resources compared with NBP compiling it directly; this arrangement was agreed in 2007 and maintained during this mission.

### Data reporting, reconciliation, and dissemination practices (meeting with NBP officials)
Data reporting and reconciliation
- Mission met with NBP officials to ensure data reporting consistency to STA and to the Western Hemisphere Department (WHD).
- The Panama team at WHD receives additional data directly from NBP.
- Mission explained content of the SRF 1SR and arrangement to continue compiling this form by the SBP.
- Mission advised NBP staff providing data to WHD to regularly compare and reconciliate these data with the SRF 1SR.
- Note: Data reconciliation can be done by identifying which accounts for the SBP’s accounting plan for banks are used to compile the NBP’s balance sheet data released to WHD.

Central bank survey publication practice
- STA disseminates central bank survey using Fund records from the IMF’s Financial Department, in lieu of IMF accounts reported by countries; this practice is followed for all countries, not only Panama.
- When releasing NBP data, the SBP may request data from the NBP or retrieve it from the IMF’s website.

Dissemination of DC, NBP, ODC surveys
- Current practice: INEC disseminates depository corporations survey and OFC survey together, with significant delays.
- SRF 1SR and 2SR (and corresponding surveys) are shared with the Central American Monetary Council (CAMC) and STA for re-dissemination.
- SBP provides hyperlinks to CAMC and INEC websites where these data are released.
- Risk: Relying on other agencies for disseminating DC-related surveys results in delays that could be avoided with direct publication by the SBP.
- Recommendation: Consider disseminating the NBP, ODC, and depository corporations surveys at the SBP’s website using the SRF 1SR and 2SR and the IMF accounts data available at the NBP or the IMF (October 2020).

### Compilation of the Other Financial Corporations (OFC) survey
- Since 2007, INEC is responsible for compiling and disseminating the OFC survey; these data are reported to STA using the SRF 4SR.
- Offshore banks (bank with international license) were not included in the SRF 4SR.
- Mission finding: Offshore banks are not money issuers in Panama (not allowed to accept deposits from Panamanian residents) and thus are not included in ODC (SRF 2SR); consequently, offshore banks should be included in the SRF 4SR together with other financial intermediaries such as insurance companies or pension funds.
- SBP agreed to report offshore banks data to the INEC regularly for inclusion in the SRF 4SR.
- SBP agreed to share quarterly data with the INEC regularly, with a lag of no more than two months after the end of the quarter, to meet INEC needs.
- Recommendation: The SBP to share quarterly data on offshore banks (international license) with the INEC regularly, with a lag of no more than two months after the end of the quarter, to meet the needs of the INEC for the compilation of the SRF 4SR.

### Financial sector statistics, metadata, and SDDS timeliness
- SBP is the official agency responsible for collecting, compiling, and disseminating banking sector statistics.
- Legal basis for compilation and dissemination of monetary statistics is not clearly assigned to the SBP or any other official agency.
- SBP collaborates with international organizations and links from SBP website to CAMC where standardized reports (following MFSM) are published.
- At national level, INEC disseminates macroeconomic statistics on financial corporations sector, comprising SBP’s SRF 1SR and 2SR, OFC data (SRF 4SR), and corresponding surveys.
- Mission found data based on the 1SR and 2SR are not available on the INEC website on a timely basis.
- Because of Government interest in subscribing to the SDDS, mission recommends SBP to disseminate monetary statistics compiled by SBP (SRF 1SR and 2SR) on a monthly basis with a lag of one month after the end of the reference period.
- SBP does not provide methodological notes on banking sector statistics on its website; banking law on SBP webpage contains classification descriptions that inform methodology.
- SBP maintains updated metadata in e-GDDS country page but lacks a link from SBP webpage to IMF’s e-GDDS webpage.
- Mission recommends developing metadata to support dissemination of monetary statistics (SRF 1SR and 2SR).

Timeliness assessment (exact text preserved)
- Timeliness of monthly statistics for the NBP and ODC is consistent with e-GDDS recommendations but not with SDDS requirement of one month after reference period.
- SBP disseminates aggregated banking data two months after the end of the reference month.
- More detailed quarterly data are published two months after the end of the reference quarter.
- Banks report data promptly (10 working days, or two weeks, after the end of the reference month).
- SBP publishes data for individual banks, including the NBP, six weeks after the end of the reference month.

Recommendations
- SBP to disseminate the monetary statistics based on SRF 1SR and 2SR (NBP and ODC) monthly with a lag of one month after the reference period, to meet SDDS requirements.
- SBP to improve metadata to support dissemination of monetary statistics (SRF 1SR and 2SR).

### Resources, training, and technical assistance
- SBP has adequate staff for compiling MFS.
- Staff benefited from hands-on training during the mission; three out of five staff did not attend any MFS courses.
- Training was very well received but limited; more comprehensive training is needed given large group of compilers.
- Recommendation: Compiling staff members who have not yet attended any MFS courses to do so in coming opportunities, which may be online.

### DC compilation system and Integrated Monetary Database (IMD)
- Since 2007, STA and WHD have shared an IMD used for publication and operational needs.
- Current IMD contains the SRFs for the central bank (NBP), ODC, and OFC, and corresponding surveys; IMD contains data for December 2002 onward.
- Mission encouraged dissemination of detailed monetary data from IMD on the IMF external website; detailed monetary data from IMD for over 40 countries are disseminated on the IMF’s website. Currently, Panama is not one of these countries allowing dissemination of the entire IMD file.
- Compilation system developed during the mission for NBP and ODC (SRF 1SR and 2SR) contains the following spreadsheets:
  - AT21: primary source data (new accounting catalog).
  - At. Credito: secondary source data on loans by institutional sector.
  - At. Inversiones: secondary source data on repos, equity, and debt securities by institutional sector.
  - 2SR Puente: compilation system mapping the new data sources (primary and secondary) with the new standardized statistics for ODC (SRF 2SR).
  - New 2SR (formulas): report form 2SR based on the new MFSMCG using the data compiled in the “2SR Puente” spreadsheet.
  - New 1SR and 2SR: Compilation system for the 1SR (NBP data) based on the 2SR data already compiled for the NBP.
  - New 1SR: report form 1SR based on the new MFSMCG using the data compiled in the “New 1SR and 2SR” spreadsheet.
  - Old to new 1SR: comparison between the old 1SR and the new 1SR based on the MFSMCG.
  - New 2SR (valores): spreadsheet ready to collect the historical series of data compiled in the “New 2SR (formulas)”, to be reported to STA.
  - New 1SR (valores): spreadsheet ready to collect the historical series of data compiled in the “New 1SR”, to be reported to STA.
- Recommendation: Consider authorizing STA to disseminate the IMD at the IMF external website.

### Action plan: prioritized actions, milestones, and target completion dates
Outcome Indicator: A new data set has been compiled and disseminated internally and/or to the public. (SRF 1SR and 2SR)
- PR: Start compiling the SRF 1SR and 2SR using the compilation system developed by the mission and monitor data quality issues until the parallel reporting by banks ends and the new accounting catalog replaces the old one (expected by March 2021) — Target Completion Date: September 2020
- PR: Report the new SRF 1SR and 2SR to STA when requested (expected by end of 2020) — Target Completion Date: December 2020
- H: Use data on negotiable instrument’s fair values to make valuation adjustments to equity and debt securities not valued at fair/market prices — Target Completion Date: September 2020
- H: Create separate accounts to identify assets and liabilities with central government, state and local government, and public nonfinancial corporations in the most quantitatively significant categories (loan assets and deposit liabilities accounts identified in the report) — Target Completion Date: June 2021
- M: Break down account 1.003.000.000.000.000.000 (securities investments) in two, to capture the equity investments separately from the debt securities investments — Target Completion Date: June 2021
- M: Add a new category on loans and securities to public nonfinancial corporations in the “átomo de credito and átomo de inversiones”, respectively — Target Completion Date: June 2021
- H: Improve the explanation provided to reporting banks to distinguish between assets and liabilities with residents and nonresidents — Target Completion Date: September 2020
- H: Consider disseminating the NBP, ODC, and depository corporations’ surveys at the SBP’s website using the SRF 1SR and 2SR and the IMF accounts data available at the NBP or the IMF — Target Completion Date: October 2020
- H: Share quarterly data on offshore banks (international license) with the INEC regularly, with a lag of no more than two months after the end of the quarter, to meet the needs of the INEC for the compilation of the SRF 4SR (September 2020 data) — Target Completion Date: October 2020
- M: Consider authorizing STA to disseminate the IMD at the IMF external website — Target Completion Date: December 2020

Outcome Indicator: Improved timeliness of data made available internally and/or to the public (shorter delays)
- PR: The SBP to disseminate the monetary statistics based on the SRF 1SR and 2SR (NBP and other depository corporations) monthly with a lag of one month after the reference period, to meet SDDS requirements — Target Completion Date: September 2020

Outcome Indicator: Metadata released internally and/or to the public have been strengthened consistent with the dataset to enhance interpretation and analysis
- H: The SBP to improve metadata to support the dissemination of monetary statistics (SRF 1SR and 2SR) — Target Completion Date: January 2021

### Key statistics: structure of the Financial Corporations Sector (selected figures)
- Financial System (Total) Total Assets: 148,864 — 100.00 percent
- National Bank of Panama: 10,850 — 1 — 7.29
- Other Depository Corporations: 110,230 — 74.05
- Onshore Banks (General License): 107,946 — 45 — 72.51
- Savings and Credit Cooperatives: 2,236 — 290 — 1.50
- Savings and Credit Associations: 48 — 3 — 0.03
- Other Financial Corporations: 27,784 — 18.66
- Offshore Banks (International Licensed): 17,040 — 23 — 11.45
- Insurance Companies: 3,230 — 23 — 2.17
- Finance Companies: 2,209 — 162 — 1.48
- Investment Companies: 2,482 — 36 — 1.67
- Other financial intermediaries and auxiliaries: 2,823 — 1.90
- Private Pension Funds: 63 — 3 — 0.04
- Agricultural Development Bank (Banco de Desarrollo Agropecuario): 382 — 1 — 0.26
- National Mortgage Bank (Banco Hipotecario): 348 — 1 — 0.23
- Leasing: 627 — 25 — 0.42
- Accounts receivable (Factoring): 410 — 31 — 0.28
- Remittances: 54 — 23 — 0.04
- Securities firms (independent): 759 — 40 — 0.51
- Investment Managers: 85 — 19 — 0.06
- Investment Advisors: 32 — 51 — 0.02

*Source: 1panea2021002 - 1.   Priority Recommendations (IMF STA mission report, June 22-July 10, 2020) and 1panea2021002 - 22.      The mission met with NBP officials.*

### 1.   Priority Recommendations ____________________________________________________________________ 6

### 1panea2021002 - 1.   Priority Recommendations ____________________________________________________________________ 6

### Summary of Mission Outcomes and Priority Recommendations

- A monetary and financial statistics (MFS) remote technical assistance (TA) mission from the IMF’s Statistics Department (STA) took place during June 22-July 10, 2020.  
- Main objective: assist the Superintendency of Banks of Panama (SBP) in the compilation of new standard report forms for depository corporations (SRF 1SR and SRF 2SR) based on the IMF’s 2016 Monetary and Financial Statistics Manual and Compilation Guide (MFSMCG), following the introduction of a new chart of accounts by the SBP, and to agree on an improved timeline to report monetary and financial statistics to STA, on a monthly basis.  
- The mission assisted the SBP to develop standardized monetary data for the National Bank of Panama (NBP) and other depository corporations (ODC) using new report forms SRF 1SR and SRF 2SR. The compilation system developed runs on an Excel file.  
- DC’s financial assets account for more than 81 percent of total financial corporations sector assets. The remaining financial intermediaries and auxiliaries are classified as other financial corporations (OFC) and represent around 19 percent of the total financial system. Within the DC’s, onshore banks (bank with general license) represent more that 98 percent of total DC’s. Offshore banks (banks with international license) are included in the OFC sector.  
- The SBP agreed to report offshore banks data to the National Institute of Statistics and Census (INEC) regularly for their inclusion in the OFC survey; currently offshore banks are reported to STA using SRF 4SR under INEC’s responsibility, and INEC currently undervalues the OFC sector because of the exclusion of offshore banks.  
- New source data for DC (accounting catalog and additional data on loans and securities) are of good quality but scope needs to be enhanced: lacks assets and liabilities with public nonfinancial corporations information and no breakdown between central government and state and local government positions.  
- The SBP will begin reporting the monthly new SRF 1SR and 2SR when requested by STA (expected by the end of 2020). Meanwhile, mission recommends using parallel reporting by banks (old and new catalog) to monitor quality.  
- SBP agreed to disseminate the SRF 1SR and 2SR (NBP and other depository corporations) monthly with a lag of one month after the reference period to meet SDDS requirements.  
- The mission proposed a detailed one-year action plan; priority recommendations summarized in Table 1.

### Table 1 — Priority Recommendations (summary)

- Target Date: September 2020  
  - Start compiling the SRF 1SR and 2SR using the compilation system developed by the mission and monitor data quality issues until the parallel reporting by banks ends and the new accounting catalog replaces the old one (expected by March 2021).  
  - Responsible Institution: SBP

- Target Date: December 2020  
  - Report the new SRF 1SR and 2SR to STA when requested (expected by end of 2020).  
  - Responsible Institution: SBP

- Target Date: September 2020  
  - The SBP to disseminate the monetary statistics based on the SRF 1SR and 2SR (NBP and other depository corporations) monthly with a lag of one month after the reference period, to meet SDDS requirements.  
  - Responsible Institution: SBP

### Background and Context

- In 2007, a TA mission assisted the SBP in compiling MFS using the SRFs. The SBP currently use these SRFs to report monetary data to STA.  
- The current mission focused on compilation of new SRF data for depository corporations following the release of a new chart of accounts for banks, requiring a new compilation system and implementation of 2016 MFSMCG reporting forms (1SR and 2SR).

### Structure of the Financial Corporations Sector (Summary)

- Following the MFSMCG, the financial corporations sector in Panama should be divided in three subsectors: (1) the central bank; (2) the other depository corporations (ODC); and (3) the other financial corporations (OFC). Panama does not have a central bank; the NBP performs some central bank functions and is the fiscal agent of the government.  
- Table 2 (December 2019) — key figures:
  - FINANCIAL CORPORATIONS: 148,864 (Total Assets, millions of dollars) — Relative Size: 100 (in percent)  
  - A. DEPOSITORY CORPORATIONS: 121080 (millions of dollars) — Relative Size: 81 (in percent)  
    - 1) National Bank of Panama: 10,850 — Relative Size: 7 (in percent)  
    - 2) Other Depository Corporations: 110,230 — Relative Size: 74 (in percent)  
      - Onshore Banks (general license): 107,946 — Relative Size: 73 (in percent)  
      - Saving and credit cooperatives: 2,236 — Relative Size: 2 (in percent)  
      - Saving and credit associations: 48 — Relative Size: 0 (in percent)  
      - Money market funds: (no figure provided separately)  
  - B. OTHER FINANCIAL CORPORATIONS: 27,784 — Relative Size: 19 (in percent)  
    - 1) Offshore banks (international license): 17,040 — Relative Size: 11 (in percent)  
    - 2) Insurance Corporations: 3,230 — Relative Size: 2 (in percent)  
    - 3) Finance companies: 2,209 — Relative Size: 1 (in percent)  
    - 4) Non-money market funds: 2,482 — Relative Size: 2 (in percent)  
    - 5) Other financial intermediaries and auxiliaries: 2,823 — Relative Size: 2 (in percent)

### Detailed Technical Assessment and Recommendations — A. Compilation of the Other Depository Corporations Survey

Findings

- Mission compiled the new SRF 2SR for December 2019 and developed the compilation system; mapping exercises between source data and SRF 2SR were completed.  
- Preliminary compilation follows the 2016 MFSMCG; SRF 1SR and 2SR have been mapped to current SRFs enabling parallel reporting. STA expected to start collecting MFS data in the new SRFs by end-2020.  
- Minimize breaks in historical ODC data by comparing old and new parallel reported data as quality stabilizes; SBP provided banks with bridging tables.  
- Valuation broadly follows international accounting standards (IFRS). Provisions are identified on the asset side with negative sign; in the SRF they are included as liabilities recorded in Provisions for losses - Other – Other accounts payable. Some negotiable instruments are valued at amortized cost; no adjustments to fair values are made for SRF 1SR and 2SR compilation. The mission recommends using reported fair/market values to make valuation adjustments to relevant negotiable instruments (equity and debt securities not valued at fair/market prices).  
- Source data are generally of good quality and allow monthly SRF 2SR compilation but with several data limitations.

Main source-data limitations (exact text and figures preserved)

- There is no distinction between assets and liability denominated in US dollars and in other foreign currencies. This limitation is currently not important, as the total assets and liabilities denominated in foreign currencies is insignificant (in December 2019, they represented 0.7 and 1.0 percent of total assets and liabilities of the banks, respectively).
- Identification of assets and liabilities with the public sector is limited: most assets and liabilities with the general government are classified as with the central government, i.e., not capturing possible assets and liabilities with state and local governments. Assets and liabilities with public nonfinancial corporations (NFC) are not separated from private NFC and are classified as private NFC. Mission recommended creating separate accounts to identify assets and liabilities with central government, state and local government, and public nonfinancial corporations in the following most quantitatively significant categories:
  - Account Description — Relative size (in percent) (Relative to total assets)
    - 1.006.000.000.000.000.000 Loans (assets) — 66
    - 2.001.001.001.002.000.000 Sight Deposits (liabilities) — 8
    - 2.001.001.002.002.000.000 Term Deposits (liabilities) — 20
    - 2.001.001.003.002.000.000 Saving Deposits (liabilities) — 4
- Identification of assets and liabilities with financial corporations is broken down by those with other banks and those with other financial intermediaries. MFSMCG recommends identifying assets and liabilities with ODC and OFC respectively; assets and liabilities with ODC that are not banks (financial cooperatives, money market investment funds, credit and saving associations) are misclassified as with OFC.
- No data on assets and liabilities in the form of money market shares and insurance technical reserves; these were not compiled in SRF 2SR but believed not very significant.
- Account 1.003.000.000.000.000.000 (securities investments) contains equity and debt securities; mission recommends breaking it into two accounts to separate equity investments from debt securities investments.
- Loans by sector data (átomo de crédito) does not identify loans to public nonfinancial corporations; mission recommends adding a new category on loans to public nonfinancial corporations.
- Equity and debt securities data (átomo de inversiones) does not identify securities issued by public nonfinancial corporations; mission recommends adding a new category on securities issued by public nonfinancial corporations.
- Explanation to banks to distinguish between assets and liabilities with residents and nonresidents could be improved: current instruction for assets says “where the operation takes effect” (“donde surte efecto la operación” in Spanish); recommendation is to mention residency, not nationality, as the criterion. For liabilities, instruction is to classify according to the residence of the costumer.

Recommendations (priority and deadlines preserved)

- Start compiling the SRF 1SR and 2SR using the compilation system developed during the mission and monitor data quality issues until the parallel reporting by banks ends and the new accounting catalog replaces the old one (expected by March 2021) (priority recommendation, deadline September 2020).  
- Report the new SRF 1SR and 2SR to STA when requested (expected to end of 2020) (priority recommendation, deadline December 2020).  
- Use data on negotiable instrument’s fair values to make valuation adjustments to equity and debt securities not valued at fair/market prices.  
- Create separate accounts to identify assets and liabilities with central government, state and local government, and public nonfinancial corporations in the most quantitatively significant categories (loan assets and deposit liabilities accounts identified above). (December 2020)  
- Breakdown account 1.003.000.000.000.000.000 (securities investments) in two, to capture the equity investments separately from the debt securities investments. (December 2020)  
- Add a new category on loans and securities to public nonfinancial corporations in the “átomo de credito and átomo de inversiones”, respectively. (October 2020)  
- Improve the explanation provided to reporting banks to distinguish between assets and liabilities with residents and nonresidents (September 2020).

### Detailed Technical Assessment and Recommendations — B. Compilation of the Central Bank (National Bank of Panama) Survey

- Panama is a dollarized economy and does not have a central bank. The BNP is a government owned bank performing some central bank functions, notably being the fiscal agent of the government. Panama has designated the NBP as its fiscal agent and depository in its relations with the IMF.  
- NBP has the same reporting requirements to the SBP as any other onshore bank. The mission used NBP data available at the SBP to compile the new SRF 1SR. Compiling SRF 1SR at the SBP saves significant resources compared with NBP compiling it directly; this arrangement was agreed in 2007 and maintained during this mission.

*Source: 1panea2021002 - 1.   Priority Recommendations (IMF STA mission report, June 22-July 10, 2020).*

### 22.      The mission met with NBP officials

### 22.      The mission met with NBP officials

### Data reporting and reconciliation
- Mission met with NBP officials to ensure data reporting consistency to STA and to the Western Hemisphere Department (WHD).
- The Panama team at WHD receives additional data directly from NBP.
- Mission explained content of the SRF 1SR and arrangement to continue compiling this form by the SBP.
- Mission advised NBP staff providing data to WHD to regularly compare and reconciliate these data with the SRF 1SR.
- Note: Data reconciliation can be done by identifying which accounts for the SBP’s accounting plan for banks are used to compile the NBP’s balance sheet data released to WHD.

### Central bank survey publication practice
- STA disseminates central bank survey using Fund records from the IMF’s Financial Department, in lieu of IMF accounts reported by countries; this practice is followed for all countries, not only Panama.
- When releasing NBP data, the SBP may request data from the NBP or retrieve it from the IMF’s website.

### Dissemination of depository corporations (DC), NBP, ODC surveys
- Current practice: INEC disseminates depository corporations survey and OFC survey together, with significant delays.
- SRF 1SR and 2SR (and corresponding surveys) are shared with the Central American Monetary Council (CAMC) and STA for re-dissemination.
- SBP provides hyperlinks to CAMC and INEC websites where these data are released.
- Risk: Relying on other agencies for disseminating DC-related surveys results in delays that could be avoided with direct publication by the SBP.
- Recommendation: Consider disseminating the NBP, ODC, and depository corporations surveys at the SBP’s website using the SRF 1SR and 2SR and the IMF accounts data available at the NBP or the IMF (October 2020).

### Compilation of the Other Financial Corporations (OFC) survey
- Since 2007, INEC is responsible for compiling and disseminating the OFC survey; these data are reported to STA using the SRF 4SR.
- Offshore banks (bank with international license, in SBP’s terminology) were not included in the SRF 4SR.
- Mission finding: Offshore banks are not money issuers in Panama (not allowed to accept deposits from Panamanian residents) and thus are not included in ODC (SRF 2SR); consequently, offshore banks should be included in the SRF 4SR together with other financial intermediaries such as insurance companies or pension funds.
- SBP agreed to report offshore banks data to the INEC regularly for inclusion in the SRF 4SR.
- SBP agreed to share quarterly data with the INEC regularly, with a lag of no more than two months after the end of the quarter, to meet INEC needs.
- Recommendation: The SBP to share quarterly data on offshore banks (international license) with the INEC regularly, with a lag of no more than two months after the end of the quarter, to meet the needs of the INEC for the compilation of the SRF 4SR.

### Financial sector statistics, metadata, and SDDS timeliness
- SBP is the official agency responsible for collecting, compiling, and disseminating banking sector statistics.
- Legal basis for compilation and dissemination of monetary statistics is not clearly assigned to the SBP or any other official agency.
- SBP collaborates with international organizations and links from SBP website to CAMC where standardized reports (following MFSM) are published.
- At national level, INEC disseminates macroeconomic statistics on financial corporations sector, comprising SBP’s SRF 1SR and 2SR, OFC data (SRF 4SR), and corresponding surveys.
- Mission found data based on the 1SR and 2SR are not available on the INEC website on a timely basis.
- Because of Government interest in subscribing to the SDDS, mission recommends SBP to disseminate monetary statistics compiled by SBP (SRF 1SR and 2SR) on a monthly basis with a lag of one month after the end of the reference period.
- SBP does not provide methodological notes on banking sector statistics on its website; banking law on SBP webpage contains classification descriptions that inform methodology.
- SBP maintains updated metadata in e-GDDS country page but lacks a link from SBP webpage to IMF’s e-GDDS webpage.
- Mission recommends developing metadata to support dissemination of monetary statistics (SRF 1SR and 2SR).
- Timeliness assessment:
  - Timeliness of monthly statistics for the NBP and ODC is consistent with e-GDDS recommendations but not with SDDS requirement of one month after reference period.
  - SBP disseminates aggregated banking data two months after the end of the reference month.
  - More detailed quarterly data are published two months after the end of the reference quarter.
  - Banks report data promptly (10 working days, or two weeks, after the end of the reference month).
  - SBP publishes data for individual banks, including the NBP, six weeks after the end of the reference month.
- Recommendation: SBP to disseminate the monetary statistics based on SRF 1SR and 2SR (NBP and ODC) monthly with a lag of one month after the reference period, to meet SDDS requirements.
- Recommendation: SBP to improve metadata to support dissemination of monetary statistics (SRF 1SR and 2SR).

### Resources, training, and technical assistance
- SBP has adequate staff for compiling MFS.
- Staff benefited from hands-on training during the mission; three out of five staff did not attend any MFS courses.
- Training was very well received but limited; more comprehensive training is needed given large group of compilers.
- Recommendation: Compiling staff members who have not yet attended any MFS courses to do so in coming opportunities, which may be online.

### DC compilation system and Integrated Monetary Database (IMD)
- Since 2007, STA and WHD have shared an IMD used for publication and operational needs.
- Current IMD contains the SRFs for the central bank (NBP), ODC, and OFC, and corresponding surveys; IMD contains data for December 2002 onward.
- Mission encouraged dissemination of detailed monetary data from IMD on the IMF external website; detailed monetary data from IMD for over 40 countries are disseminated on the IMF’s website. Currently, Panama is not one of these countries allowing dissemination of the entire IMD file.
- Compilation system developed during the mission for NBP and ODC (SRF 1SR and 2SR) contains the following spreadsheets:
  - AT21: primary source data (new accounting catalog).
  - At. Credito: secondary source data on loans by institutional sector.
  - At. Inversiones: secondary source data on repos, equity, and debt securities by institutional sector.
  - 2SR Puente: compilation system mapping the new data sources (primary and secondary) with the new standardized statistics for ODC (SRF 2SR).
  - New 2SR (formulas): report form 2SR based on the new MFSMCG using the data compiled in the “2SR Puente” spreadsheet.
  - New 1SR and 2SR: Compilation system for the 1SR (NBP data) based on the 2SR data already compiled for the NBP.
  - New 1SR: report form 1SR based on the new MFSMCG using the data compiled in the “New 1SR and 2SR” spreadsheet.
  - Old to new 1SR: comparison between the old 1SR and the new 1SR based on the MFSMCG.
  - New 2SR (valores): spreadsheet ready to collect the historical series of data compiled in the “New 2SR (formulas)”, to be reported to STA.
  - New 1SR (valores): spreadsheet ready to collect the historical series of data compiled in the “New 1SR”, to be reported to STA.
- Recommendation: Consider authorizing STA to disseminate the IMD at the IMF external website.

### Action plan: prioritized actions, milestones, and target completion dates
- Outcome Indicator: A new data set has been compiled and disseminated internally and/or to the public. (SRF 1SR and 2SR)
  - PR: Start compiling the SRF 1SR and 2SR using the compilation system developed by the mission and monitor data quality issues until the parallel reporting by banks ends and the new accounting catalog replaces the old one (expected by March 2021) — Target Completion Date: September 2020
  - PR: Report the new SRF 1SR and 2SR to STA when requested (expected by end of 2020) — Target Completion Date: December 2020
  - H: Use data on negotiable instrument’s fair values to make valuation adjustments to equity and debt securities not valued at fair/market prices — Target Completion Date: September 2020
  - H: Create separate accounts to identify assets and liabilities with central government, state and local government, and public nonfinancial corporations in the most quantitatively significant categories (loan assets and deposit liabilities accounts identified in the report) — Target Completion Date: June 2021
  - M: Break down account 1.003.000.000.000.000.000 (securities investments) in two, to capture the equity investments separately from the debt securities investments — Target Completion Date: June 2021
  - M: Add a new category on loans and securities to public nonfinancial corporations in the “átomo de credito and átomo de inversiones”, respectively — Target Completion Date: June 2021
  - H: Improve the explanation provided to reporting banks to distinguish between assets and liabilities with residents and nonresidents — Target Completion Date: September 2020
  - H: Consider disseminating the NBP, ODC, and depository corporations’ surveys at the SBP’s website using the SRF 1SR and 2SR and the IMF accounts data available at the NBP or the IMF — Target Completion Date: October 2020
  - H: Share quarterly data on offshore banks (international license) with the INEC regularly, with a lag of no more than two months after the end of the quarter, to meet the needs of the INEC for the compilation of the SRF 4SR (September 2020 data) — Target Completion Date: October 2020
  - M: Consider authorizing STA to disseminate the IMD at the IMF external website — Target Completion Date: December 2020
- Outcome Indicator: Improved timeliness of data made available internally and/or to the public (shorter delays)
  - PR: The SBP to disseminate the monetary statistics based on the SRF 1SR and 2SR (NBP and other depository corporations) monthly with a lag of one month after the reference period, to meet SDDS requirements — Target Completion Date: September 2020
- Outcome Indicator: Metadata released internally and/or to the public have been strengthened consistent with the dataset to enhance interpretation and analysis
  - H: The SBP to improve metadata to support the dissemination of monetary statistics (SRF 1SR and 2SR) — Target Completion Date: January 2021

### Key statistics: Structure of the Financial Corporations Sector (selected figures)
- Financial System (Total) Total Assets: 148,864 — 100.00 percent
- National Bank of Panama: 10,850 — 1 — 7.29
- Other Depository Corporations: 110,230 — 74.05
- Onshore Banks (General License): 107,946 — 45 — 72.51
- Savings and Credit Cooperatives: 2,236 — 290 — 1.50
- Savings and Credit Associations: 48 — 3 — 0.03
- Other Financial Corporations: 27,784 — 18.66
- Offshore Banks (International Licensed): 17,040 — 23 — 11.45
- Insurance Companies: 3,230 — 23 — 2.17
- Finance Companies: 2,209 — 162 — 1.48
- Investment Companies: 2,482 — 36 — 1.67
- Other financial intermediaries and auxiliaries: 2,823 — 1.90
- Private Pension Funds: 63 — 3 — 0.04
- Agricultural Development Bank (Banco de Desarrollo Agropecuario): 382 — 1 — 0.26
- National Mortgage Bank (Banco Hipotecario): 348 — 1 — 0.23
- Leasing: 627 — 25 — 0.42
- Accounts receivable (Factoring): 410 — 31 — 0.28
- Remittances: 54 — 23 — 0.04
- Securities firms (independent): 759 — 40 — 0.51
- Investment Managers: 85 — 19 — 0.06
- Investment Advisors: 32 — 51 — 0.02

*Source: 1panea2021002 - 22.      The mission met with NBP officials*

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_Source: https://www.imf.org/-/media/files/publications/cr/2021/english/1panea2021002.pdf_