## _cr05230

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### Executive summary — main findings
- GDDS: Dissemination practices broadly consistent with GDDS recommendations; users requested improved periodicity and timeliness.
- Major coverage exception: central government operations exclude operations of social security funds and central government agencies with their own budgets.
- To participate in the GDDS authorities would need to appoint a GDDS coordinator and commit to adopting the GDDS framework.
- Prerequisites of quality: need to attach higher priority to the statistical system, improve inter-agency cooperation, increase permanent staff, training, and computer resources.
- Integrity: professionalism and ethical guidelines exist; pre-release access to GDP and BOP estimates by selected officials and organizations occurs (technical approval) but is not publicized.
- Methodological soundness: significant departures from international guidelines (fiscal, national accounts, PPI); national accounts use the 1953 SNA framework and base year 1978.
- Accuracy and reliability: fiscal source data inadequate; deficiencies in source data for national accounts, balance of payments, and PPI; revision studies not prepared regularly.
- Serviceability: greater intersectoral reconciliation and dataset consistency needed; formal consultations with users not conducted regularly.
- Accessibility: CBH disseminates data in print and via website but needs more detail, metadata, and advance release calendars; nonpublished (nonconfidential) data availability is not publicized.

### Assessment of dissemination practices and GDDS (findings and specific items)
- Institutional roles:
  - CBH: national accounts, price, BOP, monetary statistics.
  - SF: government finance and public debt statistics.
  - NIS: sociodemographic indicators.
- Coverage, periodicity, timeliness — selected preserved examples:
  - Real sector: National Accounts — GDDS periodicity A; Honduras periodicity A; GDDS timeliness 10–14 months; Honduras timeliness 6–9 months.
  - Fiscal sector: Central govt. operations — Coverage: No (estimates exclude social security funds and certain decentralized units); GDDS periodicity Q; Honduras periodicity A, B, M; GDDS timeliness 6–9 months; Honduras timeliness A: 7–9 months; B: 2–3 months; M: 2–3 months.
  - Producer price index — Coverage: No (The PPI covers manufacturing only and the coverage is very limited.); GDDS periodicity M; Honduras periodicity M; GDDS timeliness 1–2 months; Honduras timeliness 2 weeks (PPI is not published but is available upon request).
  - Gross official reserves (U.S. dollars) — GDDS periodicity M; Honduras periodicity M; GDDS timeliness 1–4 weeks; Honduras timeliness 8–10 weeks.
- Users’ requests: quarterly BOP and GDP estimates, more timely production indicators, more methodology detail, advance release calendars, and data revisions.

### Plans for improvement (authorities’ plans and milestones)
- National accounts and real sector:
  - Implement the 1993 SNA.
  - Change base year from 1978 to 2000.
  - Expand coverage, update techniques, prepare quarterly national accounts over the medium term.
- Prices:
  - Publish a new PPI with expanded coverage and new weights based on Economic Survey of 2000.
- Fiscal statistics:
  - SF 2004 operative plan: prepare consolidated central government and nonfinancial public sector statistics applying GFSM 2001; expand institutional coverage to include all deconcentrated units.
- External sector:
  - Medium-term: complete BPM5 compilation and improve quarterly BOP estimates.
  - Short-term: increase resources for external sector data, foster surveys, adopt gross recording for maquila foreign trade.
- Monetary statistics:
  - Improve sectorization of depositary corporations’ balance sheets; include credit and savings cooperatives; apply market valuation and accrual accounting.
- Key implementation milestones (preserved exactly):
  - mid-2004: CBH website enhancement completed.
  - December 2004: SF 2003 Annual Report published.
  - early 2005: GDDS metadata drafting completed.
  - end-July 2005: Honduras expected to attain GDDS participation status.
  - late 2004: Dissemination of quarterly BOP estimates expected to commence.
  - end-2005: Dissemination of BPM5-based quarterly estimates for 2004 and 2005 (with a one-quarter lag) expected.
  - end-March 2006: New annual series for 2000–04 to be finalized.
  - end-2006: Quarterly national accounts estimates to be published.
  - end-2005: Supply-side estimates will be available.
  - June 2004: Preliminary CBH balance sheet prepared according to MFSM guidelines (preparation since June 2004).
  - February 2005: Authorities requested reporting under new guidelines be initiated with data for end-2004.
  - end-June 2005: Deadline set for reporting data for January–May 2005.
  - June 2005: Depository institutions to move to direct reporting to CBH through electronic means starting in June 2005.
  - end-June 2006: Planned publication of quarterly balance sheet of 28 credit unions.
  - 2007: Full implementation of the ISFM is expected for 2007.
  - December 2004: Estimates of spending to reduce poverty completed for 2000–04.
  - end-2007: Expected capability to transit to the SDDS by end-2007.

### Summary DQAF highlights — strengths and weaknesses
- Prerequisites of quality:
  - Extensive legal framework (NIS law effective 2000) but seldom invoked; penalties exist (US$ 400–US$ 2,800; disclosure penalties US$ 2,800–US$ 3,000) indexed to minimum wage.
  - Need stricter application and judicious imposition of penalties for nonresponse.
  - Resource constraints: insufficient permanent staff, training, and computing resources across agencies, notably for BOP compilation.
- Integrity:
  - Professionalism and ethical guidelines in place; selection of sources/methods based on statistical considerations.
  - Transparency gap: pre-release access arrangements for GDP and BOP not publicized.
- Methodological soundness:
  - National accounts: follow 1953 SNA Rev. 2; base year 1978; includes property income/land rental/current transfers in value added; operating balances of public enterprises treated as taxes.
  - Classification: ISIC Rev. 2 used (not ISIC Rev. 3); COFOG/COICOP/COPNI not fully used.
  - PPI: unpublished, limited to manufacturing; weights not updated since initial publication in 1992.
  - GFS: broadly in line with GFS Manual 1986 but coverage incomplete (central administration only); no migration plan to GFSM 2001.
  - BOP: broad conformity with BPM4; progress toward BPM5; maquila treated as services (net) not goods for processing; profits of maquila likely understated and excluded from financial account.
  - Monetary statistics: broadly follow Guide to Money and Banking Statistics (1986); credit cooperatives excluded; repo misclassifications; partial market valuation and accrual application.
- Accuracy and reliability:
  - National accounts: inadequate coverage for quarrying, construction, services, informal activities; reliance on single indicator deflation and extrapolation rather than double deflation; inventories and private final consumption partly residuals; no supply-use framework; revision studies not published.
  - BOP: survey response rates low; quarterly BOP estimates prepared but not disseminated; net errors and omissions averaging about 50 percent of external current account deficit and nearly 2 percent of GDP in 1997–2002.
  - GFS: above-the-line annual operations of consolidated central and general governments not compiled; large unexplained discrepancy between overall balance and financing.
  - PPI: sample very limited (31 products from 55 enterprises; 76 prices covering 31 products is cited elsewhere), no secondary products priced, weights outdated.
- Serviceability:
  - Need greater intersectoral reconciliation and consistent sectorization across datasets; formal user consultations and published revision studies absent.
- Accessibility:
  - CBH provides data in print and online but lacks detailed metadata, advance release calendars, and publicized availability of nonpublished data; CPI published monthly within two weeks; PPI not published (available upon request).

### Users’ views (summary)
- Most users satisfied with macroeconomic statistics but request:
  - More detail, better periodicity and timeliness (national accounts, balance of payments).
  - Quarterly BOP and GDP estimates; more timely production indicators.
  - More information on methodologies, advance release calendars, and data revisions.
  - Strengthened coordination among statistical agencies and improved agency websites.
  - Concern that access to data sometimes depends on personal contact.

### Fund staff recommendations (priorities and specific actions)
- General (High priority)
  - Improve coordination within the NSS and intersectoral reconciliation by addressing sectorization shortcomings.
- General (Other)
  - Political leadership to promote implementation of statistical legislation and an agreed national statistical policy and plan.
  - Ensure adequate staff and training; increase retention of qualified staff.
  - Disseminate statistics simultaneously to all users and publicize any prior access.
  - Publish documentation on concepts, scope, classification, and methodologies.
  - Initiate regular consultations with users, disseminate revision policies, and publish revision studies.
  - Publicize contact persons for each dataset and refer to NIS law when requesting data.
- National Accounts (High priority)
  - Complete implementation of the 1993 SNA and adopt new base year without delay.
  - Use inventories and investment information to improve accounts and procure source data on construction, services, informal sector, and household consumption.
- Consumer Price Index (High priority)
  - Establish and disseminate calendar for regular (at least every five to seven years) revisions of CPI market basket weights; use upcoming survey of living conditions for new weights.
- Producer Price Index (High priority)
  - Transfer PPI compilation responsibility to an entity independent of national accounts (consider NIS); implement plans to expand PPI coverage to mining, manufacturing, electricity and water, fishing, and agriculture.
- Government Finance Statistics (High priority)
  - Compile and disseminate GFS for the central government and general government with sufficient detail; disseminate nonfinancial public sector operations.
- Balance of Payments (High priority)
  - Complete conversion to BPM5 as soon as possible; prepare draft metadata and an improved BOP summary table.
  - Conduct routine reconciliation of foreign trade data from NIS and CBH; use customs information to compile maquila foreign trade on a gross basis.
  - Increase staffing by “3–4 professionals” for BOP survey design, collection, processing, and validation.
  - Conduct quarterly sample surveys to improve quarterly BOP estimates and begin dissemination (a three-month lag suggested).
  - Move from due date-based recording of interest on external debt to accrual basis.
- Monetary Statistics (High priority)
  - Establish plan for adopting MFSM principles and definitions, particularly sectorization and instrument classification.
  - Sectorize claims/deposits of public sector units to permit identification of bank financing of consolidated central and general governments.
  - Include credit and savings cooperatives in the ODC survey; classify repurchase agreements as collateralized loans; compile and publish a fully sectorized central bank survey with publication scheduled 10 days after the reference month.

### Selected exact quantitative findings (preserved)
- Net errors and omissions averaged about 50 percent of the external current account deficit and nearly 2 percent of GDP in 1997–2002.
- BPS survey response rate (2001): 46 percent (or 24 percent if only questionnaires with relevant data are considered).
- PPI current coverage: manufacturing only, covering 31 products from 55 enterprises (76 enterprises and 31 products cited elsewhere for monthly pricing).
- NAS staff mix (national accounts):
  - Total: 57 employees: 19 permanent and 38 contractual.
  - Permanent Professionals: 15; Contractual Professionals: 37; Total Professionals: 52.
- NAS computing resources: 38 computers, 1 server, and 2 printers; only three computers have internet access.
- BPS staffing: BPS currently comprises five staff (mid-1995: eight staff).
- Monetary Section staffing: ten staff members.
- Remesas familiares recorded in BOP (2002): US$ 711 million (10 percent larger than foreign exchange recorded in CBH’s balanza cambiaria for that period).
- Maquila recent CBH survey example: goods exports exceed US$ 2.4 billion; imports of inputs and intermediate goods about US$ 1.8 billion.
- Revision cycle for annual national accounts estimates:
  - Preliminary estimate: 2 months
  - First revised estimate: 5–6 months
  - Second revised estimate: 8–9 months
  - Final estimate: 14 months

*Source: Executive Summary and Data Quality Assessment Framework findings from the IMF ROSC data module prepared by an IMF mission that visited Tegucigalpa during July 8–24, 2003, and authorities’ responses and updates (mid-2004–2005) as presented in the source content.*

### Executive Summary ......................................................................................................

### _cr05230 - Executive Summary

### Executive summary — main findings
- GDDS: Dissemination practices are broadly consistent with GDDS recommendations, though surveyed users expressed an interest in improved periodicity and timeliness. A major exception is coverage of central government operations, which exclude the operations of social security funds and central government agencies with their own budgets. To participate in the GDDS, the authorities would need to appoint a GDDS coordinator and commit to adopting the GDDS framework to improve the statistical system.
- Prerequisites of quality: Further improvement requires attaching higher priority to the statistical system and improving inter-agency cooperation. While an extensive legal framework supports statistical activity, stricter application of the law and judicious imposition of penalties for nonresponse could help increase the survey response rate. Agencies need increased permanent staff, training, and computer resources.
- Integrity: Agencies demonstrate professionalism and staff are provided with appropriate ethical guidelines. Selection of data sources and methods is governed exclusively by statistical considerations. Transparency could be enhanced by public information on occasional pre-release access (following approval at the technical level) to certain data by selected government officials and multilateral organizations.
- Methodological soundness: There is scope to follow international guidelines more closely. Shortcomings regarding scope, classification, sectorization, and/or basis of recording affect all datasets, with more serious deviations in fiscal, national accounts, and producer price statistics. The national accounts use the 1953 SNA framework and base year 1978. The producer price index has very limited coverage.
- Accuracy and reliability: Fiscal source data availability is inadequate; there are deficiencies in source data for national accounts, balance of payments, and the producer price index. Revision studies are not prepared regularly, and statistical analysis of data sources is insufficient.
- Serviceability: Greater intersectoral reconciliation and consistency across macroeconomic datasets are needed. Revision studies are not disseminated and formal consultations with users are not conducted regularly.
- Accessibility: The CBH makes a variety of data available in print and through its website, but more detail and analysis of published data, more metadata (methodology and data sources), and advance release calendars are needed. Adequate assistance is typically offered to users, but no information is disseminated on the availability of nonpublished (and nonconfidential) data.

### Assessment of dissemination practices and GDDS
- Framework and institutional roles:
  - Three institutions produce GDDS-related statistics: CBH (national accounts, price, BOP, monetary statistics), SF (government finance and public debt statistics), and NIS (sociodemographic indicators).
  - To participate in the GDDS, authorities would need to appoint a GDDS coordinator and commit to follow GDDS recommendations for selected data.
- Coverage, periodicity, timeliness (summary):
  - Periodicity and timeliness are consistent with or exceed GDDS recommendations for a majority of core frameworks and indicators, but notable gaps exist:
    - Production indices are not disseminated to the public.
    - Quarterly external debt estimates are unavailable.
    - There is a long delay in dissemination of official reserves.
  - Table 1 highlights specific items (selected examples preserved from source):
    - Real sector: National Accounts — GDDS periodicity A; Honduras periodicity A; GDDS timeliness 10–14 months; Honduras timeliness 6–9 months.
    - Fiscal sector: Central govt. operations — Coverage: No (estimates exclude social security funds and certain decentralized units); GDDS periodicity Q; Honduras periodicity A, B, M; GDDS timeliness 6–9 months; Honduras timeliness A: 7–9 months; B: 2–3 months; M: 2–3 months.
    - Producer price index — Coverage: No (The PPI covers manufacturing only and the coverage is very limited.); GDDS periodicity M; Honduras periodicity M; GDDS timeliness 1–2 months; Honduras timeliness 2 weeks (PPI is not published but is available upon request).
    - External Sector: Gross official reserves denominated in U.S. dollars — GDDS periodicity M; Honduras periodicity M; GDDS timeliness 1–4 weeks; Honduras timeliness 8–10 weeks.
  - Users expressed interest in quarterly BOP and GDP estimates, more timely production indicators, and more information on methodologies, advance release calendars, and data revisions.
- GDDS dimensions:
  - Data (coverage): Key gaps include lack of dissemination of data on general government operations, national saving, the producer price index, and quarterly BOP. Coverage problems affect operations of general government; periodicity/timeliness deficiencies affect financial survey data.
  - Quality (metadata and component detail): Documentation on methodology, data sources, and component detail is disseminated only for the CPI; national accounts documentation is available only upon request. Agencies generally do not disseminate component detail and additional series needed for crosschecks.
  - Integrity (legal framework and pre-release access): Gaps exist in public provision of terms and conditions for collection, compilation, and dissemination. Compilation is supported by statutes of CBH and SF; dissemination is weakly contemplated for certain basic monetary and fiscal data. The mandate to disseminate statistics has been reinforced by recent NIS law. Pre-release access to GDP and BOP estimates by selected officials and organizations is not publicized, though it follows technical approval.
  - Access (release practices): Advance release calendars are not disseminated; internal release schedules at CBH, SF, and NIS are not well known to users. Simultaneous release to all parties is not practiced via public calendars.

### Plans for improvement (as described by authorities)
- National accounts and real sector:
  - Implement the 1993 System of National Accounts (1993 SNA).
  - Change the base year from 1978 to 2000.
  - CBH plans to expand coverage, update statistical techniques, and prepare quarterly national accounts over the medium term.
- Prices:
  - Plans to publish a new PPI with expanded coverage and new weights based on the Economic Survey of 2000.
- Fiscal statistics:
  - SF operative plan for 2004: prepare statistics on the consolidated central government and the nonfinancial public sector applying GFSM 2001; expand institutional coverage of central administration statistics to include all deconcentrated units.
- External sector:
  - Medium-term: complete compilation of the BOP on the basis of BPM5 and improve quarterly BOP estimates.
  - Short-term: increase resources for compiling external sector data, foster survey-related activities, and adopt international standards for recording foreign trade of the maquila sector on a gross basis rather than recording related value added under services.
- Monetary statistics:
  - Improve sectorization of key stocks in the balance sheet of depositary corporations to permit proper identification of net credit to the central and general governments and nonfinancial public enterprises.
  - Improve coverage of depository corporation data by including balance sheet information of credit and savings cooperatives.
  - Apply market valuation and accrual accounting.

### Summary data quality assessment (DQAF highlights)
- Prerequisites of quality:
  - An extensive legal framework supports statistical activity, but stricter application and penalties for nonresponse could improve survey response rates.
  - Agencies are aware of quality importance; however, increased permanent staff, training, and computer resources are needed to improve macroeconomic statistics.
- Integrity:
  - Staff professionalism and ethical guidelines are in place; selection of data sources and methods is guided by statistical considerations.
  - Transparency could be improved by publicizing pre-release access arrangements.
- Methodological soundness:
  - Shortcomings exist regarding scope, classification, sectorization, and basis of recording across datasets.
  - More serious deviations affect fiscal statistics, national accounts (1953 SNA framework, base year 1978), and the producer price index (very limited coverage).
- Accuracy and reliability:
  - Inadequate fiscal source data; deficiencies in source data for national accounts, BOP, and PPI.
  - Revision studies are not prepared regularly; insufficient statistical analysis of data sources.
- Serviceability:
  - Need for greater intersectoral reconciliation and dataset consistency.
  - Revision studies are not disseminated; formal consultations with users are not regularly conducted.
- Accessibility:
  - CBH disseminates a variety of data in print and on its website, but needs to disseminate more detail, metadata, and advance release calendars.
  - Most users receive adequate assistance, but there is no information about availability of nonpublished (nonconfidential) data.

### Users’ views (summary)
- Most users are satisfied with official macroeconomic statistics but see scope for improvement in:
  - More detail, better periodicity and timeliness—especially national accounts and balance of payments.
  - Concern about insufficient coverage of national accounts.
  - Interest in quarterly BOP and GDP estimates and more timely production indicators.
  - Lack of information on methodologies, advance release calendars, and data revisions.
  - Need for strengthened coordination among statistical agencies and improved agency websites.
  - Some users reported that access to data depended on personal contact.

*Source: Executive Summary of the IMF ROSC data module prepared by an IMF mission that visited Tegucigalpa during July 8–24, 2003.*

### 16. ROSC data modules assess the quality of statistics using the Data Quality Assessment

### 16. ROSC data modules assess the quality of statistics using the Data Quality Assessment Framework (DQAF)

### Summary assessment and general finding
- In general, Honduras’ macroeconomic statistics satisfy minimum requirements for facilitating surveillance of economic and financial conditions, but there is ample scope to improve the methodological foundation of most macroeconomic statistics, and to enhance their accuracy and reliability.
- The summary assessment presented is supported by the accompanying Detailed Assessments volume and standardized summary tables using a four-part qualitative scale.

### Prerequisites of quality (legal, organizational, and resource aspects)
- The law of the NIS (effective in 2000) provides an overarching framework, confers the NIS broad authority to compile statistics, and created a National Statistical System (NSS).
- The law envisaged a National Statistics Commission (NSC) headed by the director of the NIS and including heads of all statistical units in public institutions; the director is appointed by the president and the NIS is placed organizationally under the Secretary of the Presidency.
- The law reinforced support for data collection by:
  - Introducing additional safeguards to guarantee confidentiality of individual responses.
  - Establishing the obligation to provide data at the request of any member of the NSS.
  - Contemplating penalties for noncompliance (US$ 400–US$ 2,800) and disclosure of confidential information (US$ 2,800–US$ 3,000), indexed to the minimum wage.
- Practical issues and gaps:
  - The NIS law is seldom invoked by agencies (other than the NIS) when circulating data requests; requests often lack reference to legal basis and terms.
  - Low response rate to certain BOP surveys is a matter of concern; close contact between the CBH and respondents has helped preempt and resolve noncompliance for monetary and price statistics.
  - The law and by-laws do not specify timetables for transfers of price statistics and selected surveys from CBH to NIS; transfer is agreed to be desirable prior to a move to inflation targeting but should occur only after durable budgetary resources are provided to NIS.
  - Disproportionate reliance on temporary donor funds largely earmarked for social statistics has created a perception that the NIS’s comparative advantage lies outside macroeconomic statistics.
- Dissemination mandates and coordination:
  - CBH law requires dissemination of financial statements of the CBH rather than broader monetary aggregates; it envisages publication of a bulletin without specified content.
  - By-laws of the Public Administration Law require the SF to publish government financial statements with discretionary periodicity rather than periodic, timely statistics.
  - The NIS law requires the NIS to ensure publication of statistics needed for policymaking and members of the NSS to publish statistics in line with standards to be set by the NSS; standards and remedies for noncompliance have not been outlined.
  - Insufficient inter-agency coordination hinders improvements in external and real sector statistics; no formal arrangements guarantee timely receipt of basic statistics prepared by the NIS and the Executive Directorate of Revenue (EDR).
- Resources and capacity:
  - CBH: Resource constraints evident, particularly in the preparation of the BOP where staffing falls substantially short of needs; computer resources are somewhat insufficient; high internal turnover and retirements have eroded human capital. CBH is revising methodologies and data collection and has a five-year strategic plan; CBH does not audit statistics regularly, conduct user surveys, or have an internal/external advisory body to review quality.
  - SF: Law supports compilation of fiscal statistics; robust cooperation with CBH on government financing data has addressed acute deficiencies. SF is introducing a new financial management system financed by the World Bank. SF has adequate computer resources but needs more staff and training and lacks formal data quality assessment procedures.

### Integrity
- CBH:
  - Committed to professionalism, transparency, and ethical conduct.
  - The Constitution establishes administrative and technical autonomy; internal rules emphasize professionalism in hiring and promotion.
  - Staff participation in internal and international meetings encouraged; selection of data sources is based exclusively on statistical considerations.
  - CBH reacts to erroneous media interpretations and provides press explanations.
  - Areas for improvement: better publicizing of terms and conditions of data dissemination (access to GDP and BOP estimates prior to release by selected officials is not publicized); advance notice of major changes in methodology is limited to national accounts and price statistics; PPI data are not disseminated; terms and conditions under which data are produced are not available to the public.
  - Both permanent and temporary employees are subject to ethical and professional guidelines.
- SF:
  - Promotes high professionalism and ethical conduct; choice of data sources and methods is free from political influence and changes are based on technical criteria.
  - Shortcomings: insufficient emphasis on transparency; no policy for disseminating terms and conditions for data production; only limited related information on its website; no advance notice of major methodological changes; SF disseminates explanatory material when fiscal data are improperly interpreted by the press.

### Methodological soundness (coverage, classifications, and recording bases)
- National accounts:
  - Compilation follows concepts and definitions of the 1953 SNA Rev. 2 (outdated).
  - Main methodological shortcomings: inclusion in value added of property income, land rental, and some current transfers; treatment of operating balances of public enterprises as a tax.
  - Scope is incomplete; not all accounts compiled. CBH is implementing the 1993 SNA and changing base year from 1978 to 2000.
  - Disseminated annual national accounts are limited to GDP by production and expenditure approaches at current and constant prices. Estimates of annual national disposable income, national savings, and the monthly index of economic activity (MIEA) are not published.
  - Implementation of production and assets boundaries is hampered by source data constraints—e.g., production of goods for own final consumption and own capital formation are not covered; mineral exploration, valuables, and patented entities are not included in assets boundary; informal and hidden activities coverage is indirect and incomplete.
  - Classification/sectorization issues: ISIC Rev. 2 used instead of ISIC Rev. 3; government final consumption expenditures not classified by function; final consumption expenditures not classified by purpose.
  - Basis for recording: output and value added valued at factor costs instead of basic/producer prices; government revenue and some external government transactions recorded on a cash basis rather than accrual; work in progress recorded only for permanent crops.
- CPI and PPI:
  - CPI: Compiled following internationally accepted concepts, practices, and standards; index covers all types of urban households, all monetary consumption expenditure, own-produced food, and imputed rents on owner-occupied dwellings. Extended COICOP used for classification and coding.
  - PPI: Broadly follows international guidelines for concepts and definitions but is unpublished and limited to the manufacturing sector; excludes mining, electricity and water production, agriculture, fishing, and maquila; classification uses ISIC revision 2 (outdated).
- Government Finance Statistics (GFS):
  - Concepts, definitions, and classification broadly in line with GFS Manual 1986; no migration plan to GFSM 2001.
  - Coverage incomplete—only central administration data compiled and disseminated.
  - Deviations and methodological issues include:
    - Interest and commissions recorded jointly.
    - Tax refunds included as expenditure.
    - Amortization of domestic and external debt included above-the-line.
    - Expenditure misclassified due to lack of detailed information on use of central administration transfers.
    - Grants only partly covered; HIPC debt relief from international organizations other than the World Bank, the IDB and the IMF excluded.
    - Grants-in-kind included in revenue.
  - Data compiled on a cash basis (revenue and financing) and on an accrual basis/payment order basis (expenditure). Refunds are not netted out of tax revenue.
- Balance of payments (BOP):
  - Compiled in broad conformity with BPM4. Considerable progress toward BPM5 adoption; preliminary annual BPM5 estimates available for 1993–2002 (not yet published).
  - Present departures from residency criterion affect treatment of maquila sector and some financial sector transactions in foreign currency.
  - Net exports of maquila recorded as net services rather than as exports and imports of goods for processing.
  - Non-recording of profits of foreign enterprises in maquila likely understates the external current account deficit; direct investment in maquila excluded from the financial account.
  - Coverage of other financial transactions of the nonfinancial private sector is incomplete.
  - Classification largely in line with BPM4 (outdated); institutional breakdown of portfolio and other investment does not conform to international standards.
  - Basis for recording broadly in line with recommendations to use market prices and accrual basis, but interest on external debt recorded on a due date basis.
- Monetary statistics:
  - CBH broadly follows IMF’s Guide to Money and Banking Statistics (1986) for monetary statistics.
  - Monetary survey consolidates balance sheet of the CBH and those of 22 commercial banks, three development banks, three savings and loan institutions, and eight finance companies; credit cooperatives not included.
  - Shortcomings: sectorization of units of central government and rest of public sector impedes identification of transactions of local governments, social security funds, and nonfinancial public corporations.
  - Planned revisions to conform to the Monetary and Financial Statistics Manual (MFSM, September 2000) require improving sectorization and classification of financial instruments.
  - Commercial banks classify residents/nonresidents mainly by currency denomination rather than “center of economic interest.” Repurchase agreements incorrectly classified as contingent assets/liabilities.
  - Market price valuation of financial assets/liabilities applied only partially; assets/liabilities recorded on both accrual and gross basis; interest accrued is not sectorized with underlying asset.

### Accuracy and reliability (source data, techniques, and validation)
- National accounts source data shortcomings:
  - Inadequate coverage of quarrying, construction, services, and informal activities.
  - Untimely availability of certain annual data.
  - Lack of sufficient data on wages, final consumption expenditure, and inventories.
  - Base year outdated (1978), making relative prices and sectoral structure likely misaligned with current economy; CBH project to change base year to 2000 underway.
  - Techniques rely largely on extrapolation/direct deflation rather than recommended double deflation; single indicator method used to estimate GDP at constant prices.
  - No good estimates for informal, hidden, and uncovered activities.
  - Changes in inventories and private final consumption expenditure calculated as residuals; deficient techniques have led to capital formation estimates that include imports of machine parts and vehicles for final consumption and persistently large positive changes in inventories.
  - No supply and use framework exists for investigating discrepancies; while magnitude of revisions is investigated, no formal studies of such revisions are published.
- CPI source data and quality assurance:
  - Sampling frame for the CPI is adequate and includes expenditure data and monthly surveys.
  - Source data for CPI weights and the monthly price survey are thoroughly reviewed.
  - A well functioning quality assurance program is established to reduce errors in data collection and processing.
  - Limitation: lack of imputation for missing prices.
  - Extensive revision studies were carried out on the 1998–99 NSHIE focusing on error size and consistency of expenditure data.

### Policy implications and priorities (inferred from assessments and stated plans)
- Priorities identified in the text for improving data quality and methodological soundness:
  - Implement the 1993 SNA fully and change the national accounts base year from 1978 to 2000.
  - Strengthen inter-agency coordination and formal arrangements to ensure timely exchange of basic statistics among CBH, NIS, EDR, and other NSS members.
  - Formalize and publicize terms and conditions for access to statistics and provide advance notice for major methodological changes across institutions (CBH, SF, NIS).
  - Address resource constraints: increase staffing (particularly for BOP compilation), reduce turnover, and upgrade computer resources.
  - Improve sectorization and classification in monetary statistics to align with MFSM recommendations; revise classification of residents/nonresidents by “center of economic interest.”
  - Extend coverage and methodological conformity of PPI, GFS, and BOP to relevant updated international manuals (including migration plans where absent).
  - Establish formal data quality assessment procedures and advisory/review bodies, and conduct regular audits and user surveys.

*Source: _cr05230 - 16. ROSC data modules assess the quality of statistics using the Data Quality Assessment Framework (DQAF).*

### 38. Although the unpublished PPI is calculated using adequate statistical techniques, the

### _cr05230 - 38. Although the unpublished PPI is calculated using adequate statistical techniques, the

### Data quality and compilation weaknesses
- PPI
  - Calculated using adequate statistical techniques but coverage limited to only the manufacturing sector.
  - Sample of enterprises is very limited and only a small number of products are priced.
  - Indices compiled only by economic activity; no meaningful indices for product aggregates can be calculated.
  - Weights for the PPI have not been updated since the index was first published in 1992.
  - CBH plans to expand coverage of the PPI and update the weights to the year 2000 as part of the project to update the base year of the national accounts; current plans envisage eventual publication of the new PPI.

- Government Finance Statistics (GFS)
  - Source data generally adequate except for certain central administration units.
  - Timely monthly central administration revenue and expenditure, and nonfinancial public sector debt, available from ISFM and ISFMED.
  - Financing data provided by the CBH monthly.
  - SF collects data from decentralized institutions, a sample of local governments, and nonfinancial public enterprises.
  - Despite source-data availability, above-the-line annual operations of consolidated central and general governments are not compiled; nonfinancial public sector statistics compiled but not disseminated.
  - Intermediate data validated against accounting records, but no revision studies are prepared.
  - Key items presented overly aggregated (e.g., central administration transfers to the Congress, Judiciary, and National Electoral Court; global provisions not distinguishing wages, salaries, and goods and services).
  - ISFM modules for payroll, treasury and accounting, and the GFS are not yet available; shortcomings impede adequate economic classification and measurement of total wage obligations and overall fiscal performance.
  - Large unexplained discrepancy between the overall balance and its financing (reasons include recording revenues on a cash basis and expenditures on a payment order basis).
  - Bank financing data prepared by the CBH are not sectorized to identify components of the nonfinancial public sector.
  - Difficulties obtaining accurate data on expenditure financed through project loans and grants.
  - No formal reconciliation procedure between BOP and GFS debt data drawn from ISFMED.
  - GFS dissemination does not meet detail necessary for comprehensive analysis; Honduras has not reported GFS data for Government Finance Statistics Yearbook since 1981.

- Balance of Payments (BOP)
  - Source data comprise administrative records and enterprise surveys (about 19), based on a well-established business register; surveys conducted annually by the CBH to obtain mainly nonfinancial private sector data.
  - Major administrative sources (foreign trade, external debt, financial sector transactions) available on a timely basis.
  - Source data on direct investment, several services, and certain foreign transactions of private enterprises are relatively weak.
  - Most annual surveys have low response rates and long delays due in part to insufficient staff and computer resources.
  - No quarterly or monthly surveys, except a pilot monthly survey on the maquila sector that began in 2003.
  - Statistical techniques used to improve coverage, classification, and valuation of foreign trade data and survey data (such as worker’s remittances); some adjustments have shortcomings.
  - Foreign direct investment surveys request insufficient data (no position data requested).
  - Validation of foreign trade data is comprehensive; surveys lack built-in quality control and automatized error-minimizing processes.
  - Documentation on validation procedures is not available; surveys lack instructions.
  - Revisions are made as needed but no revision studies are conducted.
  - Quarterly BOP estimates are prepared but not disseminated.
  - Net errors and omissions are relatively large but stable (averaging about 50 percent of the external current account deficit and nearly 2 percent of GDP in 1997–2002).
  - Revision policy is not made public; preliminary data are clearly identified but no public studies/analysis of revisions.

- Monetary statistics
  - Generally accurate and reliable with accounting records of the CBH and other depository corporations available with good timeliness.
  - Current data do not permit a good approximation to the new MFSM definitions; plans to implement the MFSM include redesign of the data-reporting framework.
  - Accounting sources are not fully exploited to obtain a sectorized central bank survey.
  - Statistical discrepancies are investigated when they arise; data revisions are infrequent and made only as more accurate data become available.
  - No policy of regular consultation with users on relevance of monetary statistics.
  - Changes in methodology are not explained in notes/footnotes to tables in the CBH’s Semi Annual Statistical Bulletin.
  - GFS and MFS need reconciliation; consistency checks are not conducted regularly.
  - Preliminary and revised data identified; results of revision studies and analyses are not publicized.
  - Monetary statistics disseminated in the CBH’s Semiannual Statistical Bulletin and website; CBH follows an internal publication schedule releasing data simultaneously to all users between the sixth and eighth week after the reference month.
  - Insufficient documentation on concepts, scope, classification, basis of recording, data sources, and statistical techniques.
  - No contact person for monetary statistics listed in CBH website or Bulletin.

### Serviceability and relevance
- National accounts
  - CBH evaluates suitability of statistics for government needs; no systematic procedures to assess relevance to private user needs and no regular user feedback solicited.
  - Timeliness and periodicity of provisional estimates meet GDDS recommendations.
  - Consistent time series according to the 1953 SNA available from 1950 onward, albeit with limited detail.
  - Quarterly national accounts estimates are not prepared.
  - National accounts reconcilable with the BOP except for maquila activities: maquila output and value added exclude profits and depreciation even though surveys contain relevant information.
  - Government operations data reconcilable with fiscal statistics since source data are the same, but institutional classification and treatment of profits/losses of public enterprises differ across frameworks.
  - Annual GDP estimates have a predetermined revision cycle, but change of base year does not follow a predetermined schedule.
  - Publications identify provisional data and revisions include same level of detail; only analyses of major revisions are published.

- CPI and PPI usability
  - No user surveys or functioning advisory groups for CPI and PPI; consultative meetings on an irregular basis for CPI.
  - Periodicity monthly for both series; CPI published within two weeks following the reference month.
  - PPI not published and only available upon request.
  - Coherent and consistent time series available for both indices at acceptable detail, but PPI aggregated only by economic activity not by product due to limited coverage.
  - No well-established schedule for weight revisions for CPI or PPI.
  - CBH plans to update PPI weights to year 2000 and expand coverage as part of national accounts base-year update.

- Accessibility
  - National accounts accessible through CBH website but available detail limited; statistics not released on a pre-announced schedule and not simultaneously to all users.
  - Non-published (but non-confidential) data available upon request but option not publicized.
  - Information on concepts and methods does not fully meet user needs; a contact person listed on CBH website but not in other publications.
  - CPI released simultaneously to all users via press release and CBH website but no published list of release dates; level of detail and length of time series could be improved; detailed indices available upon request for longer periods but availability unclear; contact person for CPI only on CBH website and not all CPI publications include website address.
  - PPI data accessibility very limited; two-digit and four-digit ISIC (revision 2) indices for manufacturing sector, with limited documentation, available upon request.
  - GFS dissemination in periodic hardcopy publications and SF website; no pre-announced release calendar; concepts, scope, classification, basis of recording, data sources and statistical methods are not documented; no contact person identified in hardcopy or electronic publications.
  - BOP data provided through CBH website and hard copy publications but not presented to facilitate interpretation; detailed internal tables available only for internal use and selected outside users; no metadata prepared; assistance to users is prompt and knowledgeable; contacts provided on CBH website via e-mail addresses.
  - Monetary statistics: nonpublished but nonconfidential data available upon request (not publicized); list of products on website and CBH library.

### Fund staff recommendations (actions to align with best practice)
- General (High priority)
  - Improve coordination within the National Statistical System (NSS) to facilitate information sharing and avoid duplication in collection and compilation.
  - Intensify efforts to improve intersectoral data consistency and reconciliation by addressing shortcomings in sectorization.
- General (Other recommendations)
  - At highest political level (possibly the Secretary of the Presidency), attach greater priority to promoting judicious implementation of the statistical legislation, including adopting an agreed national statistical policy and national statistical plan.
  - Ensure agencies/units compiling macroeconomic statistics have adequate staff and training; increase retention of qualified staff.
  - Disseminate macroeconomic statistics simultaneously to all users as soon as available, publicizing any prior access granted to selected users.
  - Disseminate documentation on concepts, scope, classification, and methodologies used.
  - Initiate regular consultations with public and private sector users (including advisory committees), inform public ahead of planned major methodological changes, disseminate revision policies, and prepare and publish revision studies.
  - Disseminate names of contact persons responsible for each dataset.
  - Refer to the law of the NIS in requesting data.

- National Accounts (High priority)
  - Complete implementation of the 1993 SNA and adopt a new base year without delay.
  - Use information available on inventories and investment to improve published national accounts and procure source data on construction, services, informal sector, and household consumption expenditures.
- National Accounts (Other recommendations)
  - Include income/expenditure module in semi-annual household survey and a national accounts module in survey on living conditions (to be conducted quarterly during a selected year, then every two to five years).
  - Implement double deflation method to calculate GDP using cost information from annual surveys and price indices.
  - Improve estimates of informal, hidden, and unrecorded activities using household survey employment and income data.
  - Update business register regularly.
  - Conduct economic censuses or censuses by economic activity as envisaged in law of the NIS.
  - Compile quarterly national accounts estimates over the medium-term.

- Consumer Price Index (High priority)
  - Establish and disseminate calendar for regular (at least every five to seven years) revisions of CPI market basket weights.
  - Use data from upcoming survey of living conditions to estimate new market basket weights as part of CPI revision/process.
- Consumer Price Index (Other recommendations)
  - Impute missing prices for temporarily and/or seasonally unavailable items.
  - Increase level of detail and length of historical series in CPI press release; include both index levels and percent changes.
  - Make non-confidential detailed historical series available on the CBH website.

- Producer Price Index (High priority)
  - Transfer responsibility for compiling the PPI to an entity independent of the national accounts section of the CBH; consider moving PPI to the NIS in the near future.
  - Implement plans to expand PPI coverage to include mining, manufacturing, electricity and water production, fishing, and agriculture.
- Producer Price Index (Other recommendations)
  - Include goods for processing (maquila) in the PPI.
  - Update classification system for PPI to ISIC, revision 3.
  - Implement plans to update PPI weights.
  - Select a new expanded enterprise sample based on new business register, tax lists, and results of the new economic survey for the year 2000.
  - Select a representative sample of products (primary and secondary) for monthly price collection in each selected enterprise.
  - Tabulate the new PPI both by economic activity and by product.
  - Disseminate the new PPI on a monthly basis through press releases, the Internet, and other appropriate means.

- Government Finance Statistics (High priority)
  - Compile and disseminate GFS for the central government and the general government with sufficient detail, using classification, sectorization, and presentation of the GFSM 1986, and disseminate estimates of nonfinancial public sector operations.
  - Ensure more timely and detailed reporting to the SF by local governments, the Congress, the Judiciary, and the National Electoral Court.
- Government Finance Statistics (Other recommendations)
  - Ensure ISFM produces all data and detail required to compile fiscal statistics, preferably in spreadsheet form.
  - Develop ISFM modules for payroll and GFS and complete those for treasury and accounting subsystems; align ISFM revenue and expenditure classifications with GFSM 1986.
  - Establish plan and timetable for adopting GFSM 2001; commence relevant training; start recording government transactions on both cash and accrual basis.

- Balance of Payments Statistics (High priority)
  - Complete conversion to BPM5 as soon as possible, including preparation of draft metadata and presentation of an improved BOP summary table.
  - Conduct routine reconciliation of foreign trade data produced by the NIS and CBH, and use customs information to compile and disseminate foreign trade data of the maquila sector to validate enterprise survey-derived data.
- Balance of Payments Statistics (Other recommendations)
  - Increase staffing (3–4 professionals) to ensure adequate design, collection, processing, and validation of BOP survey data (annual and quarterly).
  - Continue improving statistical techniques for estimating workers remittances, profits of maquila firms, freight and insurance on imports of goods, and undercoverage of exports and imports.
  - Widely disseminate detailed BOP data currently prepared for selected users.
  - Conduct quarterly sample surveys to improve coverage of quarterly BOP estimates and begin dissemination of quarterly BOP as soon as possible; a three-month lag would seem adequate.
  - Record maquila exports and imports as goods for processing (on a gross basis) rather than treating maquila value added as services.
  - Conduct benchmark surveys to identify maquila enterprises with direct investment and other financial transactions, and other nonfinancial private enterprises with external debt and other financial transactions.
  - Move from due date-based recording of interest on external debt to accrual basis.

- Monetary Statistics (High priority)
  - Establish a plan for adopting principles and definitions of the MFSM, particularly sectorization of institutional units and classification of financial instruments.
  - Sectorize claims on/deposits of public sector units to permit identification of bank financing of the consolidated central and general governments.
- Monetary Statistics (Other recommendations)
  - Include data on credit and savings cooperatives in the other depository corporations’ survey.
  - Classify repurchase agreements as collateralized loans rather than contingent assets and liabilities.
  - Impute realized unpaid losses as profits/losses rather than Activos diferidos.
  - Compile and publish a fully sectorized central bank survey as recommended by the MFSM, with publication scheduled 10 days after the end of the reference month.
  - Include explanatory notes on procedures for compiling monetary statistics in relevant CBH publications.

*IMF staff data quality assessment and recommendations as presented in the source content.*

### 0. Prerequisites

### 0. Prerequisites

### 01. Legal and institutional environment
- 0.2 Resources
- 0.3 Quality awareness
- Ratings matrix (in source order):
  - LO
  - LO
  - O
  - LO
  - LO
  - O
  - LNO
  - LNO
  - O
  - LNO
  - LO
  - LO
  - LNO
  - LO
  - O
  - O
  - LO
- See paragraphs 18–26

### 1. Integrity
- 1.1 Professionalism
- 1.2 Transparency
- 1.3 Ethical Standards
- Ratings matrix (in source order):
  - O
  - LO
  - O
  - O
  - O
  - O
  - O
  - NA
  - O
  - O
  - LO
  - O
  - O
  - LO
  - O
  - O
  - LO
  - O
- See paragraphs 27–28

### 2. Methodological Soundness
- 2.1 Concepts and definitions
- 2.2 Scope
- 2.3 Classification/sectorization
- 2.4 Basis for recording
- Ratings matrix (in source order):
  - LNO
  - LO
  - LNO
  - LO
  - O
  - O
  - O
  - O
  - O
  - LNO
  - LNO
  - O
  - LO
  - LNO
  - LNO
  - LNO
  - LO
  - LO
  - LNO
  - LO
  - O
  - O
  - LNO
  - LO
- See paragraphs 29, 31–35 (for 2.1 and 2.2)
- See paragraphs 29, 31–35 (for 2.3)
- See paragraphs 30–35 (for 2.4)

### 3. Accuracy and reliability
- 3.1 Source data
- 3.2 Statistical techniques
- 3.3 Assessment and validation of source data
- 3.4 Assessment and validation of intermediate data
- 3.5 Revision studies
- Ratings matrix (in source order):
  - LO
  - LNO
  - LO
  - LO
  - LNO
  - O
  - LO
  - O
  - O
  - O
  - O
  - LNO
  - LO
  - LNO
  - LO
  - LNO
  - LO
  - O
  - LO
  - O
  - NO
  - LO
  - LO
  - LO
  - LO
  - LNO
  - O
  - O
  - O
  - O
  - LO
- See paragraphs 36–42

### 4. Serviceability
- 4.1 Relevance
- 4.2 Timeliness and periodicity
- 4.3 Consistency
- 4.4 Revision policy and practice
- Ratings matrix (in source order):
  - LO
  - O
  - LO
  - LO
  - LO
  - O
  - O
  - LO
  - LO
  - NO
  - LO
  - LO
  - LO
  - O
  - LNO
  - LO
  - LO
  - O
  - LO
  - LO
  - LO
  - O
  - O
  - LO
- See paragraphs 43–47

### 5. Accessibility
- (No specific indicator ratings listed in the provided content)

*Source: _cr05230 - 0. Prerequisites*

### 5.1 Data accessibility 5.2 Metadata accessibility 5.3 Assistance to users

### _cr05230 - 5.1 Data accessibility 5.2 Metadata accessibility 5.3 Assistance to users

### Data accessibility — actions taken and planned
- CBH enhanced its website; the enhancement was completed in mid-2004.  
- The SF published the 2003 Annual Report in December 2004 with more explanatory notes and fiscal statistics with greater coverage and component detail.  
- The SF is disseminating improved estimates of the nonfinancial public sector operations by level of government via its website.  
- GDDS metadata drafting was completed in early 2005 with IMF Statistics Department review; Honduras is expected to attain GDDS participation status by end-July 2005.  
- Balance of payments dissemination:
  - Dissemination of quarterly estimates of the balance of payments was expected to commence in late 2004.  
  - Compilation of BPM5-based quarterly estimates for 2004 and 2005 is expected to be disseminated by end-2005, with a one-quarter lag.  
- National accounts dissemination:
  - An annual series for 2000–02 based on the 1993 SNA with 2000 as the new base year was prepared and presented to the CBH Board in February 2005.  
  - The new annual series for 2000–04 is to be finalized by end-March 2006.  
  - Quarterly estimates consistent with the new annual series are planned to be published by end-2006.  
  - Supply-side estimates will be available by end-2005.  
- Monetary statistics dissemination and reporting changes:
  - Starting in June 2005 depository institutions will move from reporting through the NCBI to direct electronic reporting to CBH to reduce reporting lag.  
  - A consolidated sheet for 2003 covering the 28 credit unions (which account for 80 percent of assets and liabilities) has been completed; plans call for publication of the quarterly balance sheet of these credit unions by end-June 2006.  
- Government finance statistics dissemination:
  - Full implementation of the Integrated System of Financial Management (ISFM) is expected for 2007; upon completion, fiscal statistics will be produced on both a cash basis and an accrual basis.  
  - Estimates of spending to reduce poverty were completed in December 2004 for the period 2000–04.  
- Strategic objective:
  - Honduras is expected to be able to transit from GDDS-consistent dissemination practices to the Special Data Dissemination Standard (SDDS) by end-2007.

### Metadata accessibility — preparation and publication
- GDDS metadata:
  - Drafting of GDDS metadata was completed in early 2005 with IMF assistance.  
  - Review by the IMF Statistics Department is expected to lead to GDDS participation by end-July 2005.  
- Methodological notes and contact information:
  - More methodological notes and contact information have been published by CBH and SF pending completion of new macroeconomic series.  
  - The communications strategy will emphasize publication of explanatory information on the nature of each series and availability of assistance to users.

### Assistance to users — capacity-building and outreach
- Communications strategy:
  - CBH and SF are designing a communications strategy to explain the nature of statistical improvements, differences between new and previously published series, and the continued publication of certain alternative definitions (for example, international reserves and the fiscal deficit).  
  - The strategy will stress cross-sectoral consistency among datasets and the publication of explanatory information and user assistance.  
- Technical assistance and training:
  - Statistical improvement efforts are supported by financial support from the Inter-American Development Bank and technical assistance from the IMF and official producers of statistics in Bolivia, Colombia, and Mexico.  
  - CBH staff received training on BPM5 methodology in 2004 and on sampling techniques in 2005.  
  - Arrangements were made with the Center of Latin American Studies (CEMLA) and Debt Relief International for CBH staff to receive training on compilation of external debt during an internship in May 2005 at the Central Bank of Bolivia and at the International Debt Management office in Washington DC.  
- Resource and staffing increases to support improved user services:
  - The number of economists in the BOP unit has been doubled (to eight) since mid-2003, and six data entry staff were also added.  
  - CBH launched quarterly surveys starting early 2004 covering services and foreign investment; semi-annual airport surveys have been conducted since 2004; a pilot border survey to improve remittance and border worker remuneration estimates is under way.  
  - CIF estimates from customs data were first derived in March 2005 corresponding to 2003 and the first two quarters of 2004.  
- Producer–user interaction and reporting timetables:
  - New reporting requirements for financial intermediaries were finalized in consultation with the supervisory authority (NCBI); authorities requested reporting under new guidelines to be initiated in February 2005 with data for end-2004.  
  - Banks requested an extension; the current deadline was set to end-June 2005 for reporting data for January–May 2005.

### Key implementation milestones and dates (preserved exactly)
- mid-2004: CBH website enhancement completed.  
- December 2004: SF 2003 Annual Report published.  
- early 2005: GDDS metadata drafting completed.  
- end-July 2005: Honduras expected to attain GDDS participation status.  
- late 2004: Dissemination of quarterly BOP estimates expected to commence.  
- end-2005: Dissemination of BPM5-based quarterly estimates for 2004 and 2005 (with a one-quarter lag) expected.  
- end-March 2006: New annual series for 2000–04 to be finalized.  
- end-2006: Quarterly national accounts estimates to be published.  
- end-2005: Supply-side estimates will be available.  
- June 2004: Preliminary CBH balance sheet prepared according to MFSM guidelines (preparation since June 2004).  
- February 2005: Authorities requested reporting under new guidelines be initiated with data for end-2004.  
- end-June 2005: Deadline set for reporting data for January–May 2005.  
- June 2005: Depository institutions to move to direct reporting to CBH through electronic means starting in June 2005.  
- end-June 2006: Planned publication of quarterly balance sheet of 28 credit unions.  
- 2007: Full implementation of the ISFM is expected for 2007.  
- December 2004: Estimates of spending to reduce poverty completed for 2000–04.  
- end-2007: Expected capability to transit to the SDDS by end-2007.

*Source: INTERNATIONAL MONETARY FUND — HONDURAS, Report on the Observance of Standards and Codes (ROSC) — Response of the Authorities (July 6, 2004) and Report on the Observance of Standards and Codes (ROSC) — Response by the Authorities — Update (June 27, 2005).*

### Appendix II), was used to prepare the summary assessment of data quality elements, based

### I. NATIONAL ACCOUNTS

### 0. Prerequisites of quality

- Assessment framework:
  - Summary assessment prepared using a four-part scale of observance from the Report on the Observance of Standards and Codes (ROSC)—Data Module.

### 0.1 Legal and institutional environment

#### 0.1.1 The responsibility for collecting, processing, and disseminating statistics is clearly specified
- Legal framework and responsibilities:
  - Central Bank of Honduras (CBH) has compiled and disseminated national accounts since 1954, according to Article 25 of the CBH law (Decree No. 53, 2/3/1950).
  - Article 25 states the Economic Studies Department (ESD) is in charge of obtaining data and carrying out research pertinent for monetary and exchange rate policies, but it does not clearly specify CBH responsibility for national accounts collection, processing, and dissemination.
  - CBH law amended in 1996 (Decree No. 228–96, 12/17/1996) and in 2002 (Decree No. 248–2002, 1/17/2002); Article 25 was not modified.
  - Operational responsibility lies with the National Accounts Section (NAS) within the Unit of Economic Aggregates (UEA) of the ESD.
  - General Directorate of Statistics and Census (GDSC) started in 1957 (Decree No. 50, 2/20/1957); Law of Statistics and Censuses of 1960 (Legislative Decree No. 299, 5/10/1960).
  - National Institute of Statistics (NIS) created by law (Decree No. 86–2000, 7/8/2000); Articles 1 and 2 establish NIS as autonomous technical entity coordinating the National Statistical System (NSS); Article 5 assigns execution and coordination of production of basic data for national accounts.
  - Transitory provision Article 120 of NIS regulations (Executive Agreement No. 042–2001, 11/6/2001) envisages CBH and NIS coordinating a gradual transfer program of statistical activities; program not operational due to infrequent communication and NIS resource constraints.
- Institutional features and issues:
  - Highly decentralized statistical system with statistical offices in ministries, public entities, public enterprises, and regions.
  - Some duplication exists despite limited budget for statistical function.

#### 0.1.2 Data sharing and coordination among data producing agencies are adequate
- Data sharing arrangements:
  - CBH collects basic data from public and private institutions; formal arrangement exists between the Executive Directorate of Revenues (EDR) of the Secretary of Finance (SF) and the CBH to exchange statistical information.
  - Informal sectoral committees established to ensure source data timeliness and requirements.
  - NIS regulations (Article 5) mandate NIS coordination role; Article 9 defines NSS composition and requirements for integrated, coordinated, and rational statistical activities under NIS scientific-normative procedures.
  - Articles 25 and 26 of the NIS law require NSS members to provide databases and products to NIS when required.
- Coordination weaknesses:
  - Commission of the National Statistical System (CNSS) envisaged in Articles 11 and 12 of NIS regulations is not operational.
  - Only two meetings among NSS institutions have been held; no consultation occurred in preparing the first National Statistical Plan (NSP) and operative annual plans despite Article 15 of Decree No. 86–2000 mandate.
  - NSS has not held a meeting since 2001.
  - Inter-institutional committees on agriculture, tourism, external trade, health, and education do not meet regularly; no committees for manufacturing, mining, and services.
  - Insufficient communication between CBH and NIS; risk of duplication (e.g., price and industrial production surveys, trade statistics compilation by both CBH and NIS).

#### 0.1.3 Respondents’ data are to be kept confidential and used for statistical purposes only
- Confidentiality legal provisions and practice:
  - CBH personnel with access to individual source information are aware of confidentiality and penalties under CBH internal regulations.
  - CBH Internal Labor Regulation (11/29/1994): Articles No. 44-i, 44-o, and 45-m establish obligations, prohibitions, sanctions, and layoff authority for revealing confidential data.
  - NIS law Article 31 and regulations Article 100 guarantee confidentiality of individual respondents’ data; data collected to be strictly confidential and published only as aggregated figures; individual data provided only to public institutions for statistical purposes.
  - NIS law does not explicitly prohibit use for tax administration purposes or police investigations.
- Questionnaires and data handling:
  - Questionnaires for censuses, surveys, and special investigations by NIS and CBH included confidentiality reference: “Confidentiality of the information: The data required are strictly confidential and to be used for statistical purposes only, publication will be done at aggregate level. Decree Law No. 86–2000 of creation of the NIS. Art. 4, 5, and 31.” This reference was recently removed from questionnaires due to communication shortcomings between NIS and CBH.
  - NIS plans to post selected individual responses to the Census 2000 on its website; mission expressed concern about potential identification of individual responses.
- Data security and retention:
  - National accounts databases administered by NAS of CBH.
  - Data security supported by internal security of operating system (Windows NT) and an external barrier/firewall.
  - Questionnaires, once processed, are sent to the CBH library; after five years they are archived and eventually destroyed in coordination with the UEA.

#### 0.1.4 Statistical reporting is ensured through legal mandate and/or measures to encourage response
- Legal mandates and practical measures:
  - Article 25 of CBH law empowers ESD to gather statistical information from public sector agencies; no legal obligation for non-financial private sector to provide information to CBH and no sanctions for noncompliance in CBH law.
  - CBH collects most basic data needed for national accounts; private non-financial sector reporting is voluntary; CBH maintains good relations and provides aggregate statistics to respondents.
  - Some enterprises, particularly foreign enterprises, refuse to respond; EDR staff often accompanies CBH personnel on visits to maquila firms because EDR is legally authorized to collect enterprise data, with CBH covering salaries and travel costs of EDR staff.
  - CBH can refer to Article 25 of NIS law in requesting data from nonfinancial private sector.
  - NIS law Article 28 requires entities receiving NIS data requests to be informed of: (i) obligatory character of responses; (ii) consequences of false responses; (iii) right of rectification; (iv) confidentiality; (v) manner of dissemination; (vi) timeframe for providing information. Respondents exempt if information classified for national security reasons.
  - Chapter VII of NIS law establishes sanctions for noncompliance (fines for nonresponse, malicious falsification, unjustified delay), but authorities prefer voluntary reporting by explaining uses, confidentiality, and importance.

### 0.2 Resources

#### 0.2.1 Staff, financial, and computing resources are commensurate with statistical programs
- NAS responsibilities and staffing:
  - NAS responsibilities include conducting most surveys, compiling the Monthly Index of Economic Activity (MIEA), and developing applications, computer programs and databases for national accounts.
  - NAS has 57 employees: 19 permanent and 38 contractual. Temporary employees will work at NAS until December 2003.
  - Current resource allocation described as adequate; staff insufficiency was a past problem affecting quality.
  - New resource allocation results from program to implement the System of National Accounts 1993 (1993 SNA) and change base year, funded by international donors. NAS plans to develop quarterly national accounts and a new producer price index once activities complete.
- Staff mix (as presented):
  - National Accounts Section
    - Permanent Professionals: 15
    - Contractual Professionals: 37
    - Total Professionals: 52
    - Permanent Assistants: 4
    - Contractual Assistants: 1
    - Total Assistants: 5
    - Total Permanent: 19
    - Total Contractual: 38
    - Total: 57
- Staff training and experience:
  - Training program on national accounts methodology exists.
  - Only one university offers social accounting courses; local universities do not have a study program in statistics.
  - Training mainly via courses, seminars, workshops, and international conferences offered by international organizations.
  - Working groups on national accounts hold sessions for methodological improvements and restructuring work procedures.
  - Average seniority of NAS staff is 10 years due to transfers of experienced staff to other CBH units.
- Years of service distribution:
  - Years in service — Staff (Permanent / Contractual / Total)
    - 0 – 1: 1 / 11 / 12
    - 1 – 3: 4 / 27 / 31
    - 3 – 7: 6 / 0 / 6
    - 7 – 14: 1 / 0 / 1
    - 14 – 21: 5 / 0 / 5
    - 21 – 28: 2 / 0 / 2
    - Total: 19 / 38 / 57
  - Percentage of staff by years in service
    - 0–1: 5.3 / 28.9 / 19.3
    - 1–3: 21.1 / 71.1 / 56.1
    - 3–7: 31.5 / 0.0 / 10.5
    - 7–14: 5.3 / 0.0 / 1.8
    - 14–21: 26.3 / 0.0 / 8.8
    - 21–28: 10.5 / 0.0 / 3.5
    - Total: 100.0 / 100.0 / 100.0
- Computing resources and software:
  - NAS has 38 computers, 1 server and 2 printers.
    - 25 of the computers were provided by CBH; the remainder were donations from USAID.
    - Processing capacity of half of the computers is very limited.
    - Only three computers have access to Internet.
  - NAS and Department of Informatics and Technology (DIT) developed applications and databases in Progress, Visual Basic, Fox Pro, SQL Server, and Oracle.
  - Available software: Excel, Word, PowerPoint, Acrobat Reader, E-Views, Tramo Seats, X-11 Arima, SPSS, and an application of the Chow Lin Method.
  - NAS has developed computer programs to process the complete sequence of accounts for the new base year (2000).
- Financial resources:
  - Domestic financial resources assigned to NAS are limited relative to heavy data collection and processing tasks.
  - CBH received funding from USAID for the first phase of implementing 1993 SNA and changing base year, and is receiving funding from Inter-American Development Bank (IDB) to complete the second phase.

#### 0.2.2 Measures to ensure efficient use of resources are implemented
- Planning, monitoring, and efficiency measures:
  - NAS tasks and projects included in Strategic Plan of CBH prepared every 5 years; plan includes goals, actions, work program, and deliverables.
  - UEA and Department of Planning (DOP) evaluate implementation progress every four months.
  - Section chiefs within UEA meet weekly to measure progress, define work, and propose methodological improvements.
  - ESD prepares an annual program with objectives and plans for each unit including statistical projects and related studies.
  - Innovations in computer processing introduced to reduce time and cost of collection, coding, editing, and tabulation.
  - Errors and inconsistencies followed up with respondents; data subjected to additional consistency checks.
  - Excel application developed to elaborate accounts of units, institutional sub-sectors, supply and use tables, and matrices of the 1993 SNA.
  - UEA controls number of questionnaires processed per employee per day and by survey type on a weekly basis.
  - NAS receiving technical assistance from an independent consultant to review methodologies and systematize compilation of complete sequence of accounts per 1993 SNA.
  - Clear responsibilities assigned among different areas; manual lists duties of every ESD position.
  - Processes exist to measure resource use and productivity; budget reviewed periodically to ensure scarce resources address major data problems and priorities.

*Source: _cr05230 - Appendix II), was used to prepare the summary assessment of data quality elements, based on a four-part scale of observance, shown in the Report on the Observance of Standards and Codes (ROSC)—Data Module.*

### 0.3       Quality       awareness

### 0.3       Quality       awareness

### 0.3.1 Processes are in place to focus on quality
- No official program of quality awareness (e.g., total quality management, ISO 9000) has been established by the CBH, but many elements exist for monitoring data collection, processing and compiling national accounts.
- The Strategic Plan of the CBH includes goals, tasks, and actions to be accomplished every five years; annual plans are prepared to measure progress every four months.
- One Strategic Plan goal: improvement in the efficiency of the process for designing, elaborating, and presenting CBH publications; use of improved methodologies to compile economic indicators; improvement in technology used in different processes.
- Productivity indicators by area and task are calculated; the NAS keeps daily records and monitors number of enterprises visited, number of surveys processed, and response to surveys.
- The CBH is audited by a commission constituted by the DOP, Internal Auditing, and the Department of Security.
- The CBH mission statement emphasizes quality of service.

### 0.3.2 Processes are in place to monitor the quality of the collection, processing, and dissemination of statistics
- Tests identify problems related to aggregation, compilation and dissemination stages.
- During the period 2000–2002, NAS staff revised methodologies and cross-checked source data to validate them and improve work procedures.
- Cross-check examples:
  - Exports statistics compared to enterprise-provided data for agriculture and mining.
  - Imports of gasoline and oil cross-checked with data from wholesale trading enterprises.
- No formal mechanisms exist for assessing the quality of national accounts statistics.
- CBH implemented programs to improve national accounts estimates since 1993.
  - Technical assistance by the Fund in January 1999 for assessing coverage and methods.
  - At beginning of 2000 CBH started a project to implement the 1993 SNA in two phases with technical assistance from an independent consultant.
    - First phase (pilot): identify weaknesses in source data, prepare a business register, provide training on the 1993 SNA, implement UN compilation software for 1997. This phase concluded at the end of 2001 and was funded by USAID.
    - Second phase (currently in execution with financial support from the IDB): complete implementation of the 1993 SNA and change the base year of the national accounts to 2000.
- Legal/statutory arrangements:
  - A Commission of the National Statistical System (CNSS) is envisaged in Articles 11 and 12 of NIS regulations.
  - Article 11 states that the CNSS ... “is a technical organism of assistance character presided by the Director of the NIS.” It is integrated by the responsible units, dependencies and statistical offices cited in Articles 9 and 10.
  - Article 12 declares that the CNSS could establish working groups denominated Technical Committees of Statistical Coordination; these committees could be permanent or temporal by sector or region.
  - The CNSS is not currently functioning; these Technical Committees do not meet regularly.
- Periodic surveys to obtain feedback from users on data quality are not conducted.

### 0.3.3 Processes are in place to deal with quality considerations, including tradeoffs within quality, and to guide planning for existing and emerging needs
- Management recognizes tradeoffs among data quality dimensions (e.g., between timeliness and accuracy/reliability).
- Quality of national accounts data is a function of the timeliness of source data; NAS informs users of data character: forecast (very preliminary), estimates (preliminary), and definitive data.
- NIS and CBH do not have regular meetings with CNSS participant entities to examine statistical development and establish new data requirements.
- Although quality awareness is high (National Plan of Statistics and Strategic Plan), regular procedures to obtain user feedback need implementation.

### 1 Integrity

#### 1.1 Professionalism
- The CBH recognizes professional independence of staff; hiring requisites in CBH Internal Labor Regulation:
  - Article 3: applicants must “Have approved the exams on professional knowledge, aptitude, and personality that the Bank will apply...under the procedures that it determines.”
  - Article 4-f: public employees elected by the population or compensated by the government cannot be hired as Bank’s employees, except those of teaching character.
- CBH mission statement includes: “The activity [of the Bank] is supported by the respect to the law, leadership and institutional autonomy, ethics, professionalism, creative effort, quality of the service, and pursuit of excellence.”
- Collection and compilation procedures are governed by technical considerations; professionalism promoted by methodological papers and meetings of professional groups.
  - Examples of special studies: Maquila Activity, Production and Industrialization of Shrimp Farming in Honduras, Survey on Production of Selected Vegetables and Fruits, Production Accounts of Manufacturing.
- Staff training: attendees at domestic and international courses/conferences present content internally; conversation groups of ESD units meet regularly; internal staff evaluation every four months.
- Standards govern professional behavior, courtesy toward respondents, integrity, impartiality in hiring, execution of official duties, and avoidance of third-party influence.
- Staff promotion: interim promotion for outstanding performance, made permanent after appraisal.
- The president of the CBH is selected by the President of Honduras and does not remain in position beyond the governance period of the President.
- National accounts publications are revised and validated by all hierarchical levels within the institution.

#### 1.1.2 Sources and techniques
- Choices of sources and statistical techniques are made on statistical considerations and international standards.
- Source data gathered from public and private sectors, including households; selection criteria: coverage needs, proper treatments, statistical quality, timeliness, cost, respondent workload.
- Respondents’ information used for statistical purposes only.

#### 1.1.3 Comment on misuse
- CBH discloses statistical information and explanatory reports via press notes, interviews, or website to avoid erroneous interpretation or misuse.
- The president of the CBH is entitled to comment on misuse and has done so publicly.
- ESD and UEA provide clarifications and presentations to journalists, universities, and labor organizations.
- Unit of Communications and Internal Relations (UCIR) monitors press daily and updates press information on the CBH Intranet.

#### 1.2 Transparency
- The CBH does not disseminate its law and labor regulations on its website; publications do not include main legal provisions.
- The CBH mission statement (published) does not include compilation and dissemination of statistics as a CBH function.
- Public is unaware that supplementary information is available at the CBH library.
- CBH publications and website do not contain terms and conditions for collection, compilation, and dissemination; they do not state definition of confidentiality or staff obligations on confidential information.
- Internal governmental access:
  - Public is not aware of approval process for publishing national accounts series.
  - After CBH authorities approve the annual GDP estimate, a copy is available to governmental officials, international organizations, and private users upon request; estimates are not released to the public immediately.
  - The list of individuals receiving advanced access is not published.
- Products are clearly identified:
  - All CBH publications identified with its logo; statistics compiled by other institutions and sources are identified in CBH publications.
  - CBH statistics identified as such in other institutions’ publications.
  - Bulletins and press notes carry CBH logo and are available on the CBH website.
  - CBH policy: release national accounts publications in a standard format (titles, colors, typography, etc.).
- Advance notice of major methodological changes:
  - Changes are announced in advance in the case of changes to the base year.
  - Annual Report of 2001 includes briefing on Improvements of Macroeconomic Statistics under program for implementing the 1993 SNA and changing base year from 1978 to 2000.
  - Users informed in seminars and publications when new data are released; press conferences, meetings with public/private institutions and university conferences planned when the new base year is published.

#### 1.3 Ethical standards
- Guidelines on ethical standards and conflict of interest are in internal regulations and labor contract; provided to staff on joining.
- Relevant regulation articles:
  - Article 44-c: employees “shall have good customs and exemplar conduct during service.”
  - Article 44-t: staff to “conduct under the good customs and urbanity of the society...acting in such a way that their norms of conduct give prestigious to the name of the Institution.”
  - Article 45-o: Employees “shall not ask or receive direct or indirect gratifications for their services to the Bank.”
  - Article 45-q: Bank’s employees “shall not participate in business that their nature is incompatible with Bank’s operations or with the ethic condition required for being Bank’s employee.”
- CBH applies the Labor Code (Decree No. 189, 5/11/1959) for situations not covered by CBH regulations.
- Regulations do not cover interference by parties outside the Bank concerning compilation of statistical data.

### 2 Methodological Soundness

#### 2.1 Concepts and definitions
- The national accounts follow the concepts and definitions of the 1953 United Nations' report A System of National Accounts and Supporting Tables (1953 SNA) Rev. 2 as general framework.
- The 1953 SNA framework is described as extremely outdated; the 1993 SNA Rev. 4 is the current internationally recommended standard.
- The definition of value added used is inappropriate owing to inclusion of property income, land rentals, and some current transfers.
- Profits of all public enterprises are considered taxes.

#### 2.2 Scope
- National accounts do not cover all tables and accounts determined as minimum requirement by ISWGNA since implementation of the 1993 SNA is in progress.
- The set of tables and accounts covered by the national accounts are limited to:
  - annual value added and gross domestic product (GDP) at current and constant prices by activity;
  - annual expenditures of GDP at current and constant prices;
  - annual gross/net national product and national income; and
  - global supply and use at current and constant prices.
- The full sequence of accounts for the total economy is not compiled.
- The set of accounts compiled but not disseminated (available upon request) include:
  - national disposable income and the use of disposable income account for the total economy; capital formation financing separated by gross national savings (public and private savings), and external savings (net lending/borrowing);
  - monthly index of economic activity (IMAE).
- Delimitation of constituent units generally follows the 1953 SNA.
  - Included as part of the economy: territorial enclaves in the rest of the world; free zones, manufacturing processing zones (maquila), and bonded warehouses.
  - Due to data constraints, workers who work part of the year in a foreign country are not fully included (example: Honduran workers who work in forestry during 7 months in the United States are not included).
  - Compensations of foreign workers who work part of the year in Honduras are not completely recorded as imports of factor services (example: compensations of Nicaraguan employees in Honduran coffee plantations are not adjusted as imports of factor services to calculate gross national product owing to the lack of data).
- Production and assets boundaries follow the 1953 SNA.
  - Excluded items that 1993 SNA recommends: own account production of all goods for own final consumption, output of goods for own-account fixed capital formation, computer software, intellectual production, and illegal output sold (last three deemed not important in Honduras).
  - Mineral exploration, valuables and historical monuments, patented entities, applications and data bases are not included in the assets boundary.
  - Coverage of informal and hidden activities is limited.

#### 2.3 Classification/sectorization
- Classification systems used are not consistent with current internationally accepted standards:
  - The 1953 SNA is followed for classifying institutional units, transactions, and other flows.
  - ISIC Rev. 2 instead of ISIC Rev. 3 is used to classify economic activity of enterprises, except agricultural production which is separated by major products.
  - COFOG is not used to classify functions of government.
  - COICOP is not used to classify household final consumption expenditure.
  - COPNI is not used to classify final consumption expenditures of NPISH.
- Preparations for 1993 SNA implementation:
  - Honduran Nomenclature of Economic Activities (HNEA) prepared based on ISIC Rev. 3.
  - Honduran Product Nomenclature (HPN) prepared based on the Central Product Classification (CPC).
  - HNEA and HPN are adaptations of international standards to Honduran supply; some HNEA categories include a mixture of economic branches.
  - COICOP, COFOG, and COPNI will be applied to estimates of the new base year 2000.
  - Unique Classification of Economic Use (UCEU) applied to exports and imports of goods.
  - Some misclassifications of imports of inputs, capital goods, and final consumption goods exist.

#### 2.4 Basis for recording
- 2.4.1 Market prices:
  - Value added is valued at factor costs.
  - GDP is valued at market prices.
  - Output for own-use is not included in production estimates.
  - Deductible sales tax (value added tax) is excluded from valuation of final uses.
  - Selective taxes on consumption and non-deductible sales taxes are included in final uses.
  - Imports and exports are valued on an f.o.b. basis; data on insurance and freight costs are available.
  - Transactions in foreign currency (for foreign trade data) are converted to Lempiras using the annual average exchange rate of purchases of foreign currency.
  - Corrections are made when transfer prices are detected (exports of banana, shrimp, and minerals).
- 2.4.2 Recording on accrual basis:
  - Transactions and flows are recorded on an accrual basis except government’s revenues, taxes and subsidies, and some external transactions other than goods which are recorded on a cash basis.
  - Work in progress is recorded only for permanent crops; work in progress for growing crops is not recorded in the period when it is produced.
- 2.4.3 Grossing/netting procedures:
  - Grossing and netting procedures are adhered to insofar as source data permit.
  - Most transactions between establishments within the same enterprise are recorded on a net basis since data is collected at enterprise level.
  - Production of some important enterprises is separated by establishment (examples: enterprises producing banana, shrimp, African palm, sugar cane, and beverages), with production separated into detailed components (banana, coconut, other fruits, boxes, education services, wholesale, health services, transport services, sugar cane, sugar, alcoholic beverages, non-alcoholic beverages, African palm, cooking oil, and soap).

*cr05230 - 0.3       Quality       awareness*

### 3. Accuracy and Reliability

### 3. Accuracy and Reliability

### 3.1 Source data — collection programs and scope
- Source data are collected through: (i) annual and monthly surveys to enterprises; (ii) household surveys; (iii) censuses, non-regular surveys or ad-hoc surveys; and (iv) administrative data sources.
- Source data are collected from comprehensive data collection programs that take into account country-specific conditions.

### Surveys to enterprises — frame, stratification, and recent actions
- Sample frame: National Taxpayer Register of the EDR based on the administrative register of taxpayers covering all registered legal units and physical persons subject to the income tax; EDR currently maintains this list.
- The type of economic activity and status (active or inactive) of the units is reviewed once a year.
- The classification of economic activity used is ISIC Rev. 2 and needs to be updated to ISIC Rev. 3; there are economic classification problems in this register.
- Stratification into three revenue strata (varying by total revenues of each economic activity at 4 digit level of ISIC Rev. 2):
  - Main stratum: Large-sized units (universe)
  - Medium stratum: Medium-sized units (sample)
  - Small stratum: Small-sized units (sample)
- The EDR register was complemented with the obligatory register of establishments maintained by local governments to include the rest of small-sized units; this register includes the level of sales by establishments.
- NAS lacked personnel hampering preparation of an updated business register until 1999.
- Because there was no updated sample frame that included all economic units, the CBH decided in early 2000 to prepare an updated directory of enterprises and establishments as part of the project for the implementation of the 1993 SNA funded by USAID.
- The directory was concluded in May of 2001 and is being used to design samples and conduct the surveys needed to compile the full sequence of accounts by institutional sector.

### Annual and monthly enterprise surveys — list of surveys and collectors
- Annual surveys (collector indicated):
  1. Statistical Questionnaire — EDR/Banks/CBH
  2. Forecast and Validation of First and Last Cycles of Basic Grains — NIS
  3. Agricultural Survey (every 2 years) — NIS
  4. Sugar Cane — CBH
  5. Banana Activity — CBH
  6. African Palm Production — CBH
  7. Processor Enterprises of African Palm — CBH
  8. Forecast of Coffee Output by Crop — HICOFFEE/CBH
  9. Special Investigation to Salt Producers (every 2 years) — CBH
  10. Agricultural Survey on Costs Structures (new base year) — CBH
  11. Economic Survey, Questionnaire of Small Producers of Ground Transport Services — CBH
  12. Financial statements of private non-financial enterprises — CBH
  13. Economic Information of maquila Enterprises — CBH
  14. Economic Multipurpose Survey (new base year and subsequent years) — CBH
- NIS conducts a quarterly survey on Enterprise Opinion.
- Monthly surveys (collector indicated):
  1. Economic Information of maquila enterprises — CBH
  2. Reports of Mining Production — CBH
  3. Permanent Survey of Multiple Purposes of Households (Only collected on May and September) — NIS
  4. Output Volume and Prices of Large Private Enterprises (IMAE) — CBH

### Survey practice, sampling, imputation, and coverage issues
- Large units are surveyed exhaustively every year; medium and small units are surveyed by a sample.
- The sample is stratified by economic activity.
- Scientific random sampling techniques are not used for the medium and small-sized units.
- NAS does not use proper imputation methods to handle nonresponse (such as using respondents from the same economic activity, size class, and region as the missing firm).
- Grossing up factors are not derived scientifically.
- Total revenues for the medium units are taken from the EDR records.
- Costs structures of enterprises that responded to surveys are applied to total revenues by economic activity to calculate the production account, except for agriculture, quarrying, handicraft, own account production of housing, and some personal services where cost structures are referred to 1978.
- Coverage of total economic activities (in terms of value added) in the annual surveys is satisfactory except in the case of quarrying, private construction, services, and informal activities.

### Coverage assessments by activity (production approach) — main sources and assessments
- Agriculture, hunting, forestry, and fishing
  - Main data sources: Business surveys (NIS and CBH); Establishment surveys on costs; Honduran Corporation of Forestry Development (COHDEFOR); IV Agricultural Census of 1993; Ministry of Agriculture and Livestock; Inversion plans of the National Bank of Agricultural Development; Local Governments’ Meat Processors; Prices of inputs; Prices of agricultural products
  - Assessment of coverage: Good
- Mining and quarrying
  - Main data source: Business surveys
  - Assessment of coverage: Unsatisfactory
- Manufacturing
  - Main data sources: Business surveys and statements; Manufacturing Producer Price Index (PPI); Small establishments and own account workers (employment data: source not used)
  - Assessment of coverage: Satisfactory; Unavailable (note: both words appear in the source under manufacturing)
- Goods for processing (maquila)
  - Main data source: Business surveys
  - Assessment of coverage: Good
- Electricity, gas, and water supply
  - Main data source: Statements of electric and water companies
  - Assessment of coverage: Good
- Construction
  - Main data sources: Construction Permits of local governments; Investment of Public Sector; Price index on construction materials
  - Assessment of coverage: Unsatisfactory / Good (both assessments appear in the source under construction)
- Wholesale and retail trade, and hotels and restaurants
  - Main data sources: Business surveys; Small establishments and own account workers (employment data: source not used); Consumer Price Index (CPI); Wholesale Price index (WPI)
  - Assessment of coverage: Unsatisfactory
- Transport, storage, and communications
  - Main data sources: Business surveys; Secretary of Public Woks, Transport and Housing; General Directorate of Transport; Small establishments and own account workers (employment data: source not used); Taxis’ surveys; Fare prices
  - Assessment of coverage: Satisfactory
- Financial intermediation
  - Main data source: Data from supervisory bodies
  - Assessment of coverage: Good
- Real estate, renting, and business activities
  - Main data sources: Business surveys; Small establishments and own account workers (employment data: source not used)
  - Assessment of coverage: Satisfactory
- Public administration and defense; compulsory social security
  - Main data sources: Budget data from central, state, and some local authorities, as well as from decentralized, non-concentrated and autonomous entities; CPI (inappropriate use)
  - Assessment of coverage: Good
- Public education/Health and social work
  - Main data sources: Health and education census; Budget data (government); Social Security Institute and budget; Ministries of Health and Education; Business surveys to private schools and universities
  - Assessment of coverage: Good
- Other community, social, and personal services
  - Main data sources: Business surveys; Small establishments and own account workers (employment data: source not used); Household surveys (NIS); Population
  - Assessment of coverage: Unsatisfactory
- Net taxes less subsidies on products
  - Main data source: Budget data (government)
  - Assessment of coverage: Good

### Coverage assessments by category (expenditure approach) — main sources and assessments
- Household final consumption expenditure
  - Main data sources: Residual; Population; CPI
  - Assessment of coverage: Poor
- Final consumption expenditure of nonprofit institutions serving households
  - Main data sources: Fixed ratios; CPI
  - Assessment of coverage: Poor
- Government final consumption expenditure
  - Main data sources: Budget records; CPI (inappropriate use)
  - Assessment of coverage: Good
- Acquisitions less disposals of tangible fixed assets
  - Main data sources: Machinery and equipment (commodity flow total); Transport equipment (commodity flow total); Financial statements and records of public sector; Financial statements of private sector (source not used); Investment private sector (construction permits and rest of component on a residual basis); Foreign unit value of machinery; Combine index of minimum salary in construction and construction materials index
  - Assessment of coverage: Satisfactory / Unsatisfactory / Good / Satisfactory / Unsatisfactory / Satisfactory / Satisfactory (multiple assessments appear in the source for different components)
- Changes in inventories
  - Main data sources: Business surveys (source not used); Residual
  - Assessment of coverage: Poor
- Exports and imports of goods
  - Main data sources: Foreign trade statistics; Foreign unit value indices
  - Assessment of coverage: Good
- Exports and imports of services
  - Main data sources: Balance of payments; Foreign unit value indices (inappropriate use)
  - Assessment of coverage: Unsatisfactory

### Household surveys
- Permanent Household Survey of Multiple Purposes conducted during May and September to collect data on employment, income, and salaries; covers all geographic areas and socio-economic groups.
- Sampling: two-stage stratified random sampling technique is applied.
- Proper imputation methods are used to deal with nonresponse.
- Grossing-up factors are derived scientifically.
- Data not collected: purchases of consumption goods, production for own-consumption, purchases of valuables, and own-account fixed-capital formation.

### Censuses and non-regular/ad hoc surveys
- Agriculture estimates based on IV Agricultural Census conducted in 1993 by the GDSC (cultivation areas, output, livestock).
- National Agricultural Survey collected by the NIS during 2000 and 2001 used for annual cultivations, permanent cultivations, livestock and other animal species, land use and farming, and technical assistance.
- National Survey of Household Incomes and Expenditures (NSHIE) last conducted during 1998–1999; Hurricane Mitch affected results during November, 1998 and the first months of 1999; household substitution method was applied.
- NSHIE sampling done by geographic strata; sample constituted by 3,746 households.
- Last Industrial Census conducted in 1975.
- NIS conducted a Population Census in 2001, but preliminary results do not include information on housing and employment by economic activity.

### Administrative data sources
- Secretariat of Finance (SF) compiles statistics on revenues and expenditures of the central government, some local governments, and some decentralized institutions; data available monthly and annually.
- SF information includes defense-related expenditure and is sufficiently detailed to measure output, intermediate consumption, fixed-capital formation, and final consumption of government services.
- Major local governments provide monthly reports on construction permits, construction area, value, number of dwellings, constructions for wholesale, manufacturing, services, and lineal constructions, improvements, and amplifications; they also provide annual reports on their revenues and expenditures.
- A unit of the SF compiles the register of taxpayers, the declarations of income taxes, and the customs declarations.
- Other administrative sources include records of: the Honduran Institute of Cooperatives (IHC), the National Directorate of Population and Migration Policy (NDPMP), the Secretary of Public Work, Transport and Housing (SPWTH), the Secretary of Public Health (SPH), the Secretary of Education (SE), the universities, the National Fund for the Production and Housing (FNPH), and the financial statements and records of public enterprises.
- NAS receives from the National Commission of Banks and Insurance Companies (NCBI) monthly and annual data on statements of commercial banks and other financial intermediaries; NCBI provides quarterly statements of insurance companies to the CBH.
- NAS receives monthly and annual data on imports and exports of goods based on the Automation System of Customs Data (ASYCUDA) and on imports and exports of services from the Balance of Payments Section (BOPS) of the CBH.

### 3.1.2 Source data — conformity with national accounts definitions and classifications
- Source data reasonably approximate the definitions, scope, classifications, valuation, and time of recording required for compiling national accounts statistics.
- Compilers are aware of differences in concepts and definitions used in source data versus national accounts requirements.
- Maquila output might be understated since exports are recorded as the national component (domestic costs) or value added and do not include enterprises’ profits.
- There is a mixture of valuations in the value of maquila exports (gross/net) in the surveys.
- Annual data requested to establishments and non-financial enterprises are recorded on an accrual basis and disaggregated according to business accounting of the private sector; increased detail on other revenues and expenditures is needed to correctly classify these transactions.
- Financial enterprises’ information is recorded on accrual basis according to the chart of accounts of financial institutions and insurance companies; government has its own charts of accounts.
- Government expenditures are recorded on accrual basis and revenues on cash basis; available information can be reclassified according to the 1993 SNA.
- Work in progress is only estimated for permanent crops since information on growing crops’ calendar was not available for the base year.
- The Ministry of Agriculture is planning a survey on production, cultivation areas, costs, and investment to improve coverage and methods.
- In general, source data are consistent with national accounts definitions, scope, and classifications.

### 3.1.3 Source data — timeliness
- No major problems with timeliness for data on financial and insurance companies, prices, and the general government.
- Foreign trade statistics and balance of payments data are not timely.
- Response to surveys of non-financial private enterprises is voluntary (not enforced by sanctions in the NIS law); therefore, some responses are not timely.
- NAS’ permanent resources to regularly visit establishments are insufficient.

*Source: _cr05230 - 3. Accuracy and Reliability*

### 3.2       Statistical       techniques

### 3.2       Statistical       techniques

### 3.2.1 Data compilation and implementation of 1993 SNA
- Base year of national accounts estimates: 1978.
- 1993 SNA implementation project launched by CBH in two phases:
  - Phase 1: identify weaknesses in source data, prepare a business register, train staff in the 1993 SNA; concluded at the end of 2001.
  - Phase 2: currently underway to complete implementation of the 1993 SNA and change the base year to 2000.
- General practice: current output estimates made at the four-digit level of ISIC, Rev. 2; agriculture at product level.
- Value added definition includes: compensation of employees, social security contributions, consumption of fixed capital, and operating surplus (profits, rentals on land and buildings, net interest payments, and some current transfers).

### Production approach — methods and limitations
- Main data sources and procedures:
  - Revenues (sales) declared by enterprises to the EDR are aggregated by activity; adjustments for establishments declaring sale volumes to local governments.
  - Manufacturing adjusted to cover handicraft production.
  - Production account estimated by applying production and costs coefficients from CBH statistical questionnaire included in EDR income tax declarations.
  - Procedure used for: manufacturing, wholesale, hotels and restaurants, transport, personal and business services.
- Identified biases and omissions:
  - Revenue data declared to the EDR assumed to have systematic understatement bias.
  - Informal activity output not covered; significant especially in wholesale and personal services.
  - Maquila enterprises: operating surplus set to zero in value added estimates; profits and consumption of fixed capital not included despite survey collection of profits/losses and depreciation.
  - Private construction estimated from construction permits — may overestimate because not all permits executed; illegal constructions not recorded.
  - Transport estimates based on number of vehicles with operation license and special investigations.
  - Owner-occupied dwellings: number from Population and Housing Census of 1988 valued at average rentals from CPI.
  - Work in progress only calculated for permanent cultivations.
  - Inventories: no adjustments for holding gains/losses; perpetual inventory method not used for consumption of fixed capital.
  - Depreciation deflated by the CPI (identified as inappropriate).
  - Cash government revenue data not converted to accrual by period allocation.
- Deflation and constant-price methods:
  - Primary method for constant price estimates: single indicator method.
  - Main deflators: producer price indices, consumer price indices, wholesale price indices.
  - Specific deviations from best practice:
    - Wholesale trade value added deflated by wholesale price indices by product category.
    - Retail trade value added deflated by CPI.
    - Restaurant services deflated by CPI of hotel breakfasts.
    - Hotel services deflated by CPI of housing.
    - General government and financial services deflated by index of average compensations of employees or by CPI depending on availability.
    - Taxes/subsidies at constant prices derived by deflating current price figures by CPI (incorrect); correct method: multiply real value of output of goods and services subject to taxes/subsidies by base-year ratio of taxes/subsidies to output.
    - Profits/losses of public enterprises incorrectly treated as taxes/subsidies.

### Expenditure approach — methods and limitations
- GDP by expenditure components not derived independently; only government final consumption expenditures and exports compiled independently.
- Government final consumption expenditure excludes incidental sales; estimate based on central government, local governments, decentralized public institutions.
- Government final consumption expenditures at constant prices obtained by deflating current price estimates by CPI (departs from best practices).
- Inconsistency: government value added at constant prices is not consistent with government final consumption expenditures; government value added includes net interest payments and some current transfers (deviation from best practices).
- Gross-fixed capital formation compiled by four asset types: machinery, transport equipment, buildings and other constructions.
  - Buildings/structures estimates based on construction output.
  - Machinery and equipment based on imports and domestic output.
  - Recording imports of capital goods as capital formation may overestimate (customs data may include spare parts).
  - Lag between import date and installation not accounted for; on average, at least two or three months of inventories should be estimated for these goods.
  - Total imports of vehicles recorded as capital formation though many imported vehicles are for household final consumption.
  - Domestic machinery deflated by import unit value indices (inappropriate).
- Private final consumption expenditures and changes in inventories:
  - Sum of total changes in inventories and total private final consumption expenditures estimated as residual between production GDP and sum of other domestic expenditure components plus trade balance.
  - Separation of private final consumption expenditures and changes in inventories made using population data and CPI developments (departs from best practices).
  - Published figures show total changes in inventories positive for more than 10 years.
  - Consecutive positive annual changes in inventories representing between 5 to 10 percent to GDP are judged not realistic.
  - Information on inventories exists from questionnaires, business surveys, financial statements, and enterprise opinion survey but not used to improve inventory estimates.
- Private final consumption expenditure:
  - Compiled at aggregate level.
  - Could be improved using output developments of consumption goods, imports of consumption goods, and periodic household survey information.
  - Expenses of residents abroad not included in household final consumption expenditure.
  - Expenditures of nonresidents in domestic economy not excluded from private final consumption expenditure, though included as exports in balance of payments as far as basic data permit.
- Trade in goods and services:
  - Exports and imports at constant prices obtained by deflating current values by unit value indices of exports and imports.
  - Services should have own price indices (indices calculated with developments of the CPI, percentage change of exchange rates, and price indices of trade partners).
- GNP estimates:
  - Include imports and exports of factor services deflated by implicit price index of imports and exports of goods.

### 3.2.3 Specific quarterly compilation techniques and MIEA
- Quarterly:
  - Seasonally adjusted quarterly GDP estimates at constant 1978 prices being developed experimentally.
  - NAS to request technical assistance for quarterly national accounts compilation.
  - Benchmarking done using prorate technique and Chow Lin method, resulting in a step problem between quarterly and annual estimates.
- Monthly Index of Economic Activity (MIEA):
  - MIEA is a Laspeyres volume index integrating monthly production indices of relevant industries by structure of value added for 1986 (base year of index).
  - Indices calculated for: agriculture, mining, manufacturing, electricity and water, private construction, transport and communication services, wholesale, governmental services, financial and insurance services, and some personal services.
  - Index covers 74 percent of GDP for the base year.
  - Deficiencies in coverage, especially for production of services.
  - CBH does not publish trends of the MIEA.
  - Seasonally adjusted data calculated using X-11 ARIMA.

### 3.2.2 Other statistical procedures and informal activities
- Output estimates at constant prices for small establishments and own-account workers are not made using employment statistics and base-year output per capita.
- Suggestion: include module in household survey to obtain output and costs of own-account workers.
- Handicraft and informal activities not estimated or analyzed separately; these activities are important in Honduras.
- Hidden and illegal activities not included in national accounts estimates.

### 3.3 Assessment and validation of source data
- Source data are not routinely assessed for accuracy; sampling and nonsampling errors not available for all surveys.
- NAS archives internal problems (misclassification, measurement) for internal use.
- Imputation information in basic statistics not available.
- Outliers evident in provisional figures, mostly removed in final results; high-value transactions confirmed with respondents.
- Household surveys audited to verify accuracy of individual survey data.
- Source data not routinely validated for temporal consistency.
- Establishments not selected from probabilistic samples due to lack of up-to-date business register until 2001; coverage cannot be accurately assessed.
- Sample errors, nonsample errors, and response errors not available; survey response voluntary.
- Some accuracy assessment processes exist for large enterprises, external trade, financial institutions, insurance companies, and government.

### 3.4 Assessment and validation of intermediate data and outputs
- Cross-checking and reconciliation:
  - Enterprise survey data cross-checked against administrative output and merchandise trade statistics.
  - Basic data cross-checked with other sources when available.
  - External trade validated with data from agriculture and mining corporations.
  - Ad hoc assessments of discrepancies performed, but checks occur only after discrepancies are identified.
- Discrepancy investigation:
  - Discrepancies evaluated and investigated; specialists contact enterprise accountants when survey data unclear or irregular.
  - When conflicting enterprise sources exist (business surveys vs. financial statements), information is validated and reconciled.
- Limitations:
  - Supply-use framework not used to reconcile GDP by activity and expenditure components.
  - Net operating surplus obtained as a residual.
  - Discrepancies between production and expenditure approaches exist and cannot be fully addressed because some expenditure components are not derived independently.
  - Explanatory notes about discrepancies not included in publications.
  - NAS does not use unofficial estimates to validate national accounts nor carry out studies to ensure bias in GDP estimate is negligible and stable over time.

### 3.5 Revision practices
- Direction and magnitude of revisions between preliminary and final data are analyzed and investigated.
- When final GDP figures change due to coverage improvements, internal explanations provided, but analyses are not published.

### 4 Serviceability — relevance, timeliness, and consistency

- Relevance and user consultation:
  - CNSS established by NIS law to meet regularly on statistical issues, including relevance and utility; only two CNSS meetings occurred and none since 2001.
  - Relevance assessed to some extent via user requests; no formal consultation process with users.
  - CBH staff participate in international statistical meetings and seminars.
- Timeliness and periodicity:
  - National accounts meet GDDS timeliness requirement.
  - Annual GDP estimates disseminated between 6 to 9 months after the end of the reference year.
  - National accounts compiled annually meeting GDDS periodicity requirements.
- Internal consistency:
  - Discrepancies between supply and expenditure sides adjusted as part of final household consumption expenditures and changes in inventories since supply sources considered more reliable.
  - Estimates on gross capital formation and inventories might be overestimated due to source/methods.
  - Total final consumption expenditure might be underestimated as it is calculated as a residual.
  - Maquila production/value added exclude profits and consumption of fixed capital while exports include them; resulting discrepancies included in residual variables.
  - Discrepancies between government value added and government final consumption expenditure also included in residual variables.
  - Final consumption expenditures do not directly adjust for nonresident household expenditures in the domestic economy nor resident households’ expenditures abroad, though these are included in travel services of balance of payments.
  - Consistency established via balancing procedures.
  - Estimates at current prices, volume measures, and implicit deflators are consistent within the "value = volume × price" framework.
- Temporal consistency and documentation:
  - National accounts series available from 1950 to 2002.
  - Latest major revision adopted base year 1978, permitting coherent time series for 1978–2001.
  - Prior years interpolated to prepare comparable series with 1978 base year.
  - Detailed methodological notes identifying and explaining breaks/discontinuities, causes, and adjustments to maintain consistency over time are not available.
  - Unusual changes in economic trends explained generally in CBH annual report (Memoria Annual).
- Cross-framework consistency:
  - National accounts statistics generally consistent with balance of payments statistics, except for maquila estimates (national accounts exclude maquila profits included in balance of payments).
  - Monetary and government finance statistics generally consistent with national accounts since they use common data sources.
  - Institutional classification of public sector differs among government finance statistics, national accounts, and monetary statistics.
  - Coverage of local governments higher in national accounts than in government finance statistics.
  - All profits/losses of public enterprises treated as taxes/subsidies in national accounts.

*Content derived from: _cr05230 - 3.2       Statistical       techniques*

### 4.4       Revision       policy and practice

### 4.4       Revision       policy and practice

### 4.4.1 Revisions follow a regular, well-established, and transparent schedule
- A preliminary GDP estimate is followed by two routine revisions. A final estimate is published 14 months after the first estimate.
- Timing described:
  - The preliminary estimate of GDP for the previous year is published in February of the following year.
  - A first revised estimate of the reference period is published in May/June of the following year.
  - A second revised estimate is disseminated in August/September of the following year.
  - A final estimate is published in February of the second following year.
- Base years are not changed following a predetermined schedule; therefore, the general public is not informed of any predetermined revision policy.
- Adequate documentation on revisions is not included in the publication of statistical series and in the database (website) accessible to users.
- Revisions cycle for annual estimates (Estimates Timetable for annual estimates):
  - Preliminary estimate: 2 months
  - First revised estimate: 5–6 months
  - Second revised estimate: 8–9 months
  - Final estimate: 14 months

### 4.4.2 Preliminary data are clearly identified
- The forecast of the percentage change of GDP at constant prices for the current year is presented in the monetary program posted on the CBH website.
- The first estimate of GDP is disseminated with much more level of detail at current and at constant prices.
- Users are informed in a footnote included in each table of the publication that the initially published data are preliminary and subject to revision, and preliminary data are labeled.
- The revised data are disseminated with the same level of detail as previously published for the data being revised.

### 4.4.3 Studies and analyses of revisions are made public
- Only analyses and causes of major revisions (e.g. change in the base year) are made public.
- Analyses on the extent and causes of current revisions are elaborated, but not publicized.

---

### 5. Accessibility

### 5.1 Data accessibility

- Presentation and detail
  - The national accounts are readily accessible on the CBH website.
  - Annual national accounts estimates are presented in a clear manner, and charts, tables and analysis of recent developments are disseminated with the data.
  - Household and government final consumption expenditures are disseminated at a high level of aggregation.
  - Datasets are not published with sufficient detail to facilitate meaningful comparisons.
- Dissemination media and formats
  - The primary dissemination media is a release that is posted on the CBH website.
  - Data are also published in hard copy for the period 1993–2000.
  - CBH publications are free.
  - Electronic versions are also available in diskette at the NAS or by e-mail at cnacionales@mail.bch.hn.
  - Annual national accounts data are released through the following hard copy publications:
    - Statistical Bulletin — Preliminary, first and second revised estimates of GDP
    - Annual Report — Second and final revised estimates of GDP
    - Honduras in Figures — Second and final revised estimates of GDP
  - The web page of the CBH reproduces the data from the monthly Statistical Bulletin and the Annual Report. Longer time series cannot be accessed electronically.
- Release schedule and equal access
  - The schedule for the release of annual estimates of national accounts is not formally pre-announced.
  - The data of national accounts series are not made available to all users at the same time. Data is available to some government users and other users upon request before being disseminated.
- Nonpublished subaggregates
  - Nonpublished, but nonconfidential sub-aggregates of the statistics are available to users upon request, but the availability of this information is not publicized.

### 5.2 Metadata accessibility

- Documentation availability
  - Limited metadata for national accounts are available in three publications:
    - National Accounts of Honduras 1970–1980 published in 1982
    - National Accounts of Honduras 1975–1984 published in 1986
    - National Accounts of Honduras 1978–1990 published in 1992
  - Only concepts and definitions are included; sources and statistical techniques used to compile the estimates are not published.
- Levels of detail
  - Documentation is available to inform general users about the statistical series. However, specialized users might find some explanations very general.

### 5.3 Assistance to users

- Contact information
  - The name of the contact person (the Chief of the NAS) and her email address (ehernandez@mail.bch.hn) are publicized on the CBH website www.bch.hn.
  - There is also a general email address for the NAS (cnacionales@)mail.bch.hn), and an institutional email address (webmaster@mail.bch.hn) for users’ comments and suggestions.
  - Addresses of the different offices of the Bank are posted on the CBH website.
  - A contact person is not publicized in the publications.
  - The Library of the CBH gives information to users about the contact person, phone number, and email to facilitate requests for clarification/elaboration.
  - The CBH gives presentations to college students to explain the contents of their publications.
- Catalogs and charges
  - The CBH disseminates a list of publications on the Internet.
  - It does not charge for documents that are in print. A copying fee may be charged for other documents.

---

### Assessment highlights from the Data Quality Assessment Framework—summary points relevant to revisions and accessibility

- Revision policy and practice:
  - Assessment: Practice Observed (symbol X under assessment matrix heading "4.4 Revision policy and practice" shows deficiencies noted).
  - Comments: No predetermined revision policy. Revision studies are not published. Analysis and causes of major revisions (change in the base year) are made public.
- Data accessibility:
  - Household final consumption and government final consumption are published at aggregate level.
  - Disposable national income and savings are not published.
  - Statistics are too aggregate. No formal-preannounced publication schedule exists. Some data are made available to some users prior to official release. The availability of non-published sub-aggregated data is not publicized.
- Metadata accessibility:
  - Metadata are outdated and only include concepts and definitions. Information on sources and statistical techniques is not included. Explanations are too broad.
- Assistance to users:
  - Contact person is published on the Internet, but not in CBH publications. Requests and queries are made in person or by email to the NAS.

*Compiling Agency: CBH — extracted findings on revision policy, data accessibility, metadata, and user assistance from the source content.*

### 0.2       Resources

### 0.2       Resources

### 0.2.1 Staff, financial, and computing resources are commensurate with statistical programs
- Staffing and organization
  - 9 staff members within the ESD working directly on the CPI.
  - 12 field agents and/or supervisors assigned to price collection in the 7 geographic regions covered by the index.
  - CPI staff receive on-the-job training and formal training through courses and seminars both in and outside the country (examples cited: National Institute of Statistics of Spain).
  - A number of CPI staff are contract personnel, but “there is no significant problem with the loss of trained employees.”
- Computing and software
  - Current computing capacity is sufficient for monthly CPI preparation, but “a number of these computers, servers and their operating systems are becoming obsolete and need to be updated.”
  - CPI is computed using the database software PROGRESS version 9.1.x and configured to perform all calculations for the CPI in an automated fashion.
- Finance
  - Financial resources for compiling the CPI are adequate.
  - Funding is provided under the standard budgetary process of the CBH; requests for special projects (e.g., changing the reference base) are included in the normal budget process as needed.

### 0.2.2 Measures to ensure efficient use of resources are implemented
- Strategic planning and management
  - CBH has a four-year (2003–2006) strategic plan, broken down into individual yearly plans.
  - Plans are administered by each organizational unit in coordination with the Department of Organization and Planning (DOP).
  - The DOP meets with each organizational unit every four months to review progress on the four-year plan and the yearly plan; allocation of financial and human resources is discussed.
  - Each unit formally reviews progress on a monthly basis.
- Technology and dissemination
  - CBH has an active program to take advantage of new computing technology, including the internet, for data processing and dissemination.
  - The CBH internet website is described as well designed and an important part of data dissemination for the bank and index users.

### 0.3       Quality awareness

#### 0.3.1 Processes are in place to focus on quality
- The four-year strategic plan, administered under the DOP, is characterized as possessing essential characteristics of a total quality management program.
- The plan provides a framework for continuous structured review of allocation of resources and data quality dimensions: accuracy, methodological soundness, reliability, serviceability, and accessibility.

#### 0.3.2 Processes are in place to monitor the quality of the collection, processing, and dissemination of statistics
- Quality control across production stages
  - Established practices and procedures cover data collection, data processing, index tabulation, and dissemination.
  - Weekly and monthly price collection phases are reviewed at both regional and national levels; detected problems are referred to supervisors at section and unit levels.
  - Data entry and screening are handled at the CBH central office; computer listings are generated to allow review and validation at each compilation level.
  - Index aggregates are reviewed and analyzed by CBH staff at various administrative levels before publication.
- Field oversight and error correction
  - CBH instituted a program of monthly visits to oversee price collection in different regions; visits also verify abnormalities detected during central office reviews.
  - Errors detected are corrected after consultation with regional staff when necessary.
- User feedback and advisory input
  - No official mechanisms (e.g., user surveys or official advisory groups) exist for obtaining user feedback or methodological guidance for the CPI.
  - Ad hoc advisory groups are formed when needed, drawing from academia, other government agencies, the press, private consulting firms, local business firms, and international organizations providing technical assistance.

#### 0.3.3 Processes are in place to deal with quality considerations, including tradeoffs within quality, and to guide planning for existing and emerging needs
- The four-year strategic planning system is cited as evidence of CBH’s commitment to quality assurance and analysis of tradeoffs among quality dimensions.
- Ongoing program to identify changes in specifications for CPI market basket items, especially motor vehicles and high-technology items; new item specifications introduced as needed.
- Ad hoc advisory groups are convened when changes are considered; these groups tend to concentrate on methodological soundness rather than user needs and other quality aspects.

*Source: _cr05230 - 0.2       Resources*

### 3.2       Statistical       techniques

### 3.2       Statistical       techniques

### 3.2.1 Data compilation and index calculation
- Expenditure data source: 1998–99 NSHIE.
- Classification:
  - Data are classified into an eight-digit extended version of the internationally recommended four-digit version of COICOP.
  - Two additional digits were added for classification into strata for item selection and weight estimation for the CPI market basket.
  - CPI indices are available at the item and strata level as well as at all levels of aggregation above the item level for the national extended COICOP classification system.
  - A detailed concordance is available for conversion of item-level data from the national COICOP classification system to the CPC.
- Valuation and coverage:
  - Expenditure data from the 1998–99 NSHIE were compatible with market basket weight estimation in terms of detail, concept and market valuation, except that market rental value for owner-occupied housing had to be estimated (no imputed rent available from the survey).
  - It was necessary to separate expenditures for additions and improvements to housing from expenditures for maintenance and repairs.
  - The survey accommodated valuation of own production for goods and services (other than owner-occupied housing) at market prices.
  - All expenditures were reported on an accrual basis.
- Index formulae and aggregation:
  - Elementary indices at the item level are calculated using the geometric mean formula.
  - For higher levels of aggregation, the current-period-to-base-period (long-term relative) formulation of the Laspeyres index calculation formulas is used.
- Weights and base linking:
  - Updated weights for the CPI, based on the 1998–99 NSHIE, were introduced in April 2000.
  - These weights were updated to the index reference period of December 1999.
  - The old CPI was linked to the new CPI in March 2000, and detailed historical indices, with the December 1999 reference base, were calculated and are available to users.
- Treatment of missing and unavailable prices:
  - Temporarily unavailable and seasonally unavailable prices are held constant.
  - When prices for substitution items/varieties for permanently unavailable items/varieties are available, the price change for the substitution item/variety is imputed to the permanently unavailable item/variety.
  - The methodology of holding temporarily and seasonally unavailable prices constant is recognized as self-correcting but can cause large jumps when prices become available again; it is noted that it would be preferable to impute all missing prices.
  - A concern is noted that holding old prices constant for items later determined to be permanently unavailable may produce a permanent uncorrected bias, particularly during periods with large price changes.
- Quality change and product replacement:
  - In general, only repackaging quality adjustments (adjustments for the volume, weight, or count) for CPI items/varieties are made.
  - New products are introduced into the index only when a major revision of the index is carried out.

### 3.2.2 Other statistical procedures and coverage
- Supplementary price change measures:
  - Estimates of price change for parts of the economy not covered by regular CPI compilation are available in the implicit deflator for the national accounts, the producer price index and the wholesale price index.
  - Indices of price change could also be estimated based on available agricultural prices.
- CPI coverage specifics:
  - The CPI covers more than 90 percent of final household consumption for urban households.
  - The entire housing stock owned and/or rented by urban consumers is included in the CPI as rent or imputed rent.
  - Consumption for rural households is not included in the CPI; price changes for urban households could be imputed to rural households to obtain more complete coverage of price change for all personal consumption.
  - The implicit deflator for the national accounts covers both urban and rural households.

### 3.3 Assessment and validation of source data
- Survey data adjustments and error estimation:
  - For the 1998–99 NSHIE adjustments were made for non-response, the effects of hurricane Mitch, atypical values (outliers), and missing data.
  - Variances were also estimated for expenditure estimates.
- Price data scrutiny:
  - Prices collected for the CPI are heavily scrutinized; any atypical prices are verified with respondents before use in index calculations.
  - A constant program for review of the price collection process is carried out by the Economic Indicators unit of the CBH.
  - An annual review is made of item specifications, particularly regarding high technology items.
  - A study comparing prices in small in-the-home shops to markets and supermarkets found price levels higher in small shops but price movements very similar.
- Compatibility adjustments:
  - Where necessary, adjustments were made to the 1998–99 NSHIE data to make them compatible with CPI needs (e.g., imputed rent for owner-occupied housing; separation of maintenance/repair from improvements).

### 3.4 Assessment and validation of intermediate data and outputs
- Cross-validation:
  - Detailed and intermediate-level price indices are compared with comparable indices from the WPI, the PPI and price data from other sources such as the Ministry of Agriculture.
- Monitoring and investigation of discrepancies:
  - The CBH has a program for constant monitoring of price data used in the CPI; atypical prices are reviewed with price collectors and respondents before inclusion.
  - Price data are checked for consistency with similar products in the same geographic area and for the same products in other geographic areas.
  - Investigations are made into the source of detected errors and steps are taken to eliminate their source.

### 3.5 Revision studies
- Studies and documentation:
  - Extensive studies were carried out on the 1998–99 NSHIE regarding level of error and consistency in expenditure data; detailed documentation for the survey and these studies is available for future NSHIE surveys.
  - A research project on estimating imputed rents for owner-occupants was carried out by the CBH; a summary and results are included as an appendix of the CPI manual.
  - Based on this study, imputed rents were estimated for owner-occupant households and for households that did not pay rent; these data were used for estimating CPI weights.

### Serviceability highlights (selected)
- Relevance and user consultation:
  - No formal system (user surveys or advisory groups) established for obtaining opinions and advice concerning the PPI; views are obtained informally through occasional meetings.
  - Lack of a formal functioning advisory group for the CPI is identified as a serious problem for preparations for a new NSHIE and for assisting transfer of compilation to the NIS.
  - CBH personnel participate regularly in domestic and international seminars and training courses on household surveys, poverty measurement, and price index methodology.
- Timeliness and periodicity:
  - The monthly CPI is published within two weeks of the reference month (exceeds GDDS standards).
  - The periodicity for the compilation of the CPI is monthly (meets GDDS standards).
- Consistency and historical series:
  - All-items index tabulations are consistent by expenditure category or geographic area.
  - The revised CPI began publication in April 2000 with a reference base of December 1999; the link month was March 2000.
  - Continuous historical series for the CPI, with the December 1999 reference base, are available for the period January 1979 to the present.
  - Monthly publication includes a brief analysis and explanation of unusual price behavior.
- Revision policy and practice:
  - Although the CPI was last revised in the year 2000, there has not been a historically consistent pattern for index revision.
  - Household income and expenditure surveys needed for updating the CPI market basket have been held every 10 to 20 years, which is not adequate.
  - The NIS has indicated a plan to carry out the NSHIE every five years; however, the NIS is currently planning a household survey of living conditions rather than a new NSHIE.
  - Detailed documentation of the latest CPI revision is available in the methodological manual for the CPI and in the manual describing the 1998–99 NSHIE.
- Preliminary data and corrections:
  - The index is published in its final form and no corrections are published; if errors are discovered after publication, corrections are incorporated into the following month’s index.
  - Studies and analyses of revisions related to the last CPI revision are available in the CPI methodological manual and the 1998–99 NSHIE documentation (made available to the public).

### Accessibility and metadata
- Data presentation and dissemination:
  - The monthly CBH publication, Indices de Precios al Consumidor, presents the monthly national-level CPI for the last three years and available months for the current year, tables for percent changes for the current month by major group by region, and selected items and lower-level aggregates at the national level; a chart of percent change for the current month to corresponding months of previous years and a brief analysis are included.
  - Publication format meets minimum standards but contains insufficient detail regarding index levels and time series.
  - More detailed CPI data are not formally published but are available from the CBH library or from the Economic Indicators Section of the CBH.
  - There is no published schedule for dissemination of the index.
  - After approval by the President of the CBH, the CPI is released simultaneously to all index users.
  - Historical, unpublished, non-confidential CPI data are available for national and regional indices at the item level and at higher-level COICOP aggregations upon request from the Economic Indicators Section of the CBH.
- Metadata and documentation:
  - Metadata on the CPI available to the public in written form and on the CBH website are quite comprehensive (geographic coverage, CPI market basket characteristics, price collection process, index calculation formula, other methodological issues).
  - The metadata do not mention the lack of self-correcting imputations for missing prices and the policy of not introducing new goods between major revisions.
  - A number of CPI publications are available in hard copy and/or on the CBH website designed for different types of users.
- User assistance and publications access:
  - Prompt and knowledgeable service on the CPI is available via key personnel listed on the CBH website; the website contains names and e-mail addresses of departmental, unit, and section chiefs responsible for published statistical indicators, but this contact list is in a separate location from economic indicator sections.
  - A contact person for CPI information is not listed on any CBH publication mediums other than the CBH website.
  - A list of CPI publications is available from the CBH librarian.
  - The CBH does not charge for documents that are in print; a copying fee may be charged for out-of-print documents.

*Source: 3.2 Statistical techniques, Price Statistics (Consumer Price Index), extracted from the provided IMF document.*

### 0.2       Resources

### _cr05230 - 0.2       Resources

### 0.2 Resources and capacity
- The PPI is compiled using the resources of the national accounts program.
- Current PPI coverage: manufacturing only, covering 31 products from 55 enterprises.
- CBH plans to expand PPI coverage to include fishing, agriculture, mining, electricity and water production in 2004 with the introduction of the new base year 2000.
- CBH plans to formally publish the new index; it will also serve as an input to the preparation of quarterly national accounts.
- Current resources are adequate for the present PPI (31 products, 55 enterprises) but there will be a shortage of human and financial resources for compiling and disseminating an expanded PPI that meets international standards.

### 0.2.2 Measures for efficient use of resources
- New PPI procedures implemented source-data measures for weights to ensure efficient resource use.
- An exhaustive concordance of classification and coding systems links the national classification system with internationally recommended systems.
- All economic survey data are automated on a Visual Basic platform on the CBH website to allow easy conversion to other platforms.
- Current PPI production is a virtual by-product of national accounts tabulation and is produced efficiently, though minimal effort is dedicated to quality issues.

### 0.3 Quality awareness
- The five-year strategic plan administered under the DOP has characteristics of a total quality management program covering accuracy, methodological soundness, reliability, serviceability, and accessibility.
- The current PPI program receives little scrutiny under the strategic plan.
- Bulk of PPI data quality review is based on comparisons with the CPI and the WPI.
- Planning for the new PPI is mainly within the context of revising the national accounts base year to 2000; there is little user feedback through meetings specifically about the PPI.
- Planned publication of a new PPI with expanded coverage in 2004.

### 1. Integrity — professionalism, transparency, ethics
- CBH law provides autonomy, enabling PPI production without outside influence.
- Hiring and promotion carried out by the Department of Human Resources under CBH regulations and based on professional merit.
- CBH staff encouraged to conduct research and participate in conferences; methodological studies circulated internally and, where appropriate, externally; papers for publication require CBH administration approval.
- Selection of sources and statistical techniques is based solely on statistical considerations and internal decisions informed by international methodological recommendations.
- Because the PPI is not published, documentation of source data and methodologies for its compilation has not been prepared and is not available to the public.
- CBH website and publications do not directly refer to standards of confidentiality and professionalism required for CBH staff, though these standards are covered in the CBH law and/or the NIS law available in the CBH library and on several websites.
- CBH publications include a directory of key personnel for each organizational unit.
- CBH plans to provide advance notice of official publication of the new PPI as part of national accounts publication with base year 2000.
- Internal Labor CBH regulations were published on November 29, 1994; norms of conduct and regulations regarding confidentiality, improper use of statistical data, and conflict of interest are given to each new employee.
- CBH regulations do not specifically cover interference and/or influence with official statistics by parties outside the CBH.

### 2. Methodological soundness — concepts, scope, classification, recording
- Concepts and definitions of the current PPI are consistent with international standards.
- Weights are determined on a value-added basis at the four-digit ISIC, revision 2 level.
- Monthly price survey: factory gate prices for narrowly specified products; specifications include product description, brand, quantity and/or unit of measurement.
- Current (unpublished) PPI coverage: manufacturing sector only; excludes mineral extraction, water and electricity production, fishing, agriculture, and goods for processing (maquila).
- Planned new PPI (as part of national accounts update to base year 2000) to cover mining, manufacturing, electricity and water production, fishing and agriculture; expected publication during calendar year 2004.
- Current classification: ISIC version 2; will be updated to ISIC, version 3 with concordances to the Central Product Classification (CPC) and the Honduran Product Nomenclature (HPN).
- Weights use production values based on factory gate producer prices that exclude taxes, transportation costs and commercial margins.
- Recording for weights and monthly price collection is on an accrual basis; for monthly price collection the market price at the moment of the transaction during the survey period is recorded.
- For enterprises producing dissimilar outputs, production is separated and treated as if there were two separate establishments; transactions between these “establishments” are recorded on a gross basis.

### 3. Accuracy and reliability — source data, techniques, validation, revisions
- Business register: new register includes number of employees but lacks data on value of production and/or sales needed for sampling frames.
- Other sampling-frame sources: Economic Census of 1975 and lists of enterprises that have paid income taxes.
- Unpublished PPI available internally since 1992 has a 1989 reference base.
- Coverage problems: only manufacturing covered; 76 enterprises included in monthly pricing survey account for only 42 percent of manufacturing (excluding goods for processing).
- Only one product priced in each enterprise; 76 monthly prices collected correspond to only 31 products; no secondary products are priced.
- Weight calculations selected enterprises with the largest value added at the four-digit ISIC, revision 2 level; no scientific sampling procedures employed.
- Serious problems with estimating value added for goods for processing: gross value of production/export sales available only for domestic enterprises involved in goods for processing; no attempt to estimate gross value of production that includes profit (factory gate value for exports) for international firms, resulting in undervaluation of value added.
- Only data available on unincorporated household businesses are from the 1998–99 NSHIE; these data are less than adequate for measuring output of home-based businesses.
- CBH and NIS embarked on a continuous annual economic survey; data available for the year 2000 and to be used in updating national accounts base year; data for 2001 and 2002 are presently being collected.
- NIS participated in 2000 survey; CBH is conducting 2001 and 2002 surveys independently with Inter-American Development Bank (IDB) money from a previous project; funding for continuing the survey in the future has not been secured.
- Source data for PPI weights and prices are consistent with PPI needs except for goods for processing.
- Monthly price collection is handled by national accounts personnel using telephone and fax; since the index is not published, the process is not always timely.
- PPI compiled by economic activity only; most detailed indices at four-digit ISIC, revision 2 level; no meaningful product aggregations available.
- Value added weights use the same statistical procedures as national accounts.
- PPI calculation: current-period-to-previous-period (short-term price change) formulation of the Laspeyres index; primary index relatives calculated using a ratio of equally weighted (un-weighted) arithmetic means.
- Reference periods for weights and the index: calendar year 1989; weights have not been updated.
- Temporarily unavailable prices are held constant; new specifications are linked into the index as needed; no attempt is made to include new products.
- Very little analysis of PPI data beyond consistency checks with other sources; suspicious data are usually verified by contacting the respondent a second time.
- PPI price and index data are compared to corresponding data from the CPI, the WPI, and other price data from government ministries and trade associations where possible.
- Unusual price behavior is investigated and corrections are made, but no documentation is prepared.
- No formal studies are conducted to investigate errors, omissions, and fluctuations in the data; with only 76 prices collected monthly, such studies would likely be of limited use.
- Since the PPI is not published, there are no revisions of published data and no revisions of base year weights; CBH is updating the national accounts base year to 2000 and plans to expand and update the PPI weights at the same time.
- Documentation of the process for estimating weights and the methodology for index calculation are available upon request but not published.

### 4. Serviceability — relevance, timeliness, consistency, revision practice
- No formal advisory groups or user surveys for the unpublished PPI; national accounts personnel producing the PPI participate regularly in local and international training seminars oriented toward national accounts.
- Timeliness: PPI is not published and does not meet GDDS standards for timeliness; with some delays the index is generally produced in a timely manner.
- Periodicity: PPI meets GDDS standards for periodicity since it is prepared on a monthly basis.
- Internal consistency: PPI calculated only by economic activity; cannot evaluate internal consistency with product-based aggregations.
- Time consistency: Monthly index series available since 1992.
- PPI is consistent with other government statistics given its limited industrial coverage.
- Revision policy: No well-established schedule for revising PPI weights; weights have not been updated since first published in 1992.
- As part of national accounts base year update to 2000, PPI will be expanded and updated; new index will be formally published, a step toward achieving GDDS status.
- Documentation of methodology is prepared and available upon request; no other analysis of the index or its potential revision has been documented.

*Source: _cr05230 - 0.2       Resources*

### 5.         Accessibility

### 5.         Accessibility

### 5.1 Data accessibility

- The Producer Price Index (PPI) is not published; it is available upon request.
- Historical index series are provided upon request at the two-digit and/or four-digit ISIC (revision 2) level.
- A methodological document is provided upon request.
- Initial monthly publication (format similar to CPI: monthly index, charts, historical series and a short note) was discontinued.
- Assessment elements not met because the PPI is not published:
  - Dissemination media and formats are adequate: Not met.
  - Statistics are released on a preannounced schedule: Not met.
  - Statistics are made available to all users at the same time: Not met.
- Nonpublished (but nonconfidential) subaggregates:
  - The PPI is provided only upon request.
  - Complete detailed data for the PPI are provided when requested.
  - Availability is not widely known among potential users.

### 5.2 Metadata accessibility

- A methodological document on the PPI describing the weight estimation process and the index calculation methodology is available upon request; this is the only document provided to the public.
- Only one level of detail on metadata is provided.

### 5.3 Assistance to users

- Contact person for the PPI is not evident to potential users on the CBH website because the PPI is not published.
- A list of statistical publications is available from the CBH librarian; documents on the PPI are not listed because it is not published.
- The CBH does not charge for documents that are in print; a copying fee may be charged for documents that are out of print.
- It is very difficult to find the contact person (in the national accounts section) for the PPI since the index is not published.

### Key findings from Data Quality Assessment Framework (Price Statistics — PPI)

- Prerequisites of quality
  - 0.2 Resources: LNO — "The PPI is a by-product of the national accounts program. Very few resources available for its compilation."
  - 0.3 Quality awareness: LNO — "Very little attention given to the PPI."
- Integrity
  - 1.2 Transparency: NO — "Index not published."
- Methodological soundness
  - 2.2 Scope: LNO — "Index covers only the manufacturing sector."
  - 2.3 Classification/sectorization: LNO — "The outdated ISIC, version 2 is being used."
- Accuracy and reliability
  - 3.1 Source data: LNO — "The price survey has very little coverage, both in terms of scope and the number of economic activities and commodities included. The maquila which represents a significant part of national production (especially for the PPI) is not measured in a way that is useful for the PPI. The Maquila is completely excluded from the PPI. Price survey data are not always received in a timely manner."
  - 3.2 Statistical techniques: LNO — "Little commodity detail. No secondary goods included in the price survey. No aggregations by product. The measure of price change in the manufacturing sector, the only sector covered by the PPI is based on very thin data."
  - 3.3 Assessment and validation of source data: LNO — "Little statistical analysis is carried out on PPI data."
  - 3.4 Assessment and validation of intermediate data and statistical outputs: LNO — "No documentation on unusual changes is prepared and disseminated. Since aggregations by product are not carried out, there can be no consistency checks with aggregations by economic activity."
  - 3.5 Revision studies: LNO — "The PPI has not yet been revised. However, the weight estimation process for the current index is well documented and will be. This documentation will assist with tabulation for the new weights for the index."
- Serviceability
  - 4.1 Relevance: LNO — "No formal advisory groups and no user surveys."
  - 4.2 Timeliness and periodicity: NO — "Index is not published."
  - 4.3 Consistency: LNO — "There are no tabulations by product, only by activity. There is only one way to tabulate the index."
  - 4.4 Revision policy and practice: LNO — "No revisions so far. The first revision is scheduled as part of the update of the base year for the national accounts to 2000. The PPI is not published. There are no preliminary tabulations. The documentation of the PPI was never made public but is available upon request."
- Accessibility (summary)
  - 5.1 Data accessibility: LNO — "No real layout and no charts. Loose tables and methodology are provided upon request. The PPI is not published. Two-digit and four-digit tables available upon request. Availability not made known to public."
  - 5.2 Metadata accessibility: LNO — "Methodological document on the PPI is available, but it is only made available upon request. Only one level of detail available."
  - 5.3 Assistance to users: LNO — "It is very difficult to find the contact person (in the national accounts section) for the PPI since the index is not published."

*Source: _cr05230 - 5.         Accessibility*

### 1.         Integrity

### _cr05230 - 1.         Integrity

### 1. Integrity — Professionalism
- Efforts to promote professionalism:
  - Sending staff to training courses domestically and abroad.
  - Contracting foreign experts for on-the-job training.
  - Analytical work and lectures.
  - Professionalism is a key factor in evaluation and promotion of staff, as envisaged in the Law of the Civil Service.
- Methodology and standards:
  - Accounting and GFS compilation methodology broadly follows international standards.
  - No legal provisions require analytical frameworks to be in place.
- Source and technique selection:
  - No evidence of political interference in choice of data sources and statistical methods.
  - Data sources are selected based on usefulness and availability for compiling sound GFS.
  - Changes to the analytical framework are made solely for statistical reasons.
  - Implementation of the GFSM 2001 would require participation by different SF directorates and units within the context of clear political support.
- Commenting on misuse:
  - GFS compilers provide expert technical advice.
  - The SF is empowered to respond to misinterpretation/misuse of GFS.
  - The SF disseminates explanatory notes and provides accounts of recent developments in annual and biannual reports.

### 1. Integrity — Transparency
- Legal access and public documentation:
  - The public has access to the PAL, the Budget Act and the General Accounting Unit Act containing the broad legal framework for collection, compilation and dissemination.
  - Comprehensive terms and conditions under which the SF collects, compiles, and disseminates GFS are not available to the public.
- Pre-release governmental access:
  - In principle, no official agency outside SF has access to data prior to publication.
  - The CBH, as financial agent of the government, receives the central administration deficit/surplus from SF prior to publication; this information is not disseminated.
  - Procedures for authorizing dissemination of GFS are made public only in a limited manner.
  - The minister of the SF authorizes the release of GFS.
- Product identification and change notification:
  - All disseminated GFS products identify the producing agencies and the data sources.
  - No advance notice is given to the public about major methodological or other relevant changes that materially affect the GFS; explanatory notes are provided when changes are introduced in publications.

### 1. Integrity — Ethical standards
- Ethical frameworks and awareness:
  - Ethical standards include:
    - The Law of the Civil Service, Decree No. 126 dated October 1967, its by-laws (Executive Decree No. 175 dated February 1976) and Decree No. 156 which modified some articles of the Law of the Civil Service.
    - Internal regulations of the SF staff of 1997.
  - The law requires civil servants to maintain reserve about work activities and to honor the public administration and the institution where they work, including by observing “good conduct” inside and outside the civil service.
  - Staff are generally aware of ethical provisions that regulate their work.
  - Art. 37 of the law contemplates penalties (including dismissal) for nonobservance of ethical standards.

### 2. Methodological Soundness — Concepts and definitions
- Conformity with standards:
  - Concepts and definitions are generally consistent with the recommendations of the GFSM 1986.
  - Authorities have not prepared a plan to migrate from GSFM 1986 to GFSM 2001.
  - Authorities have formally requested Fund assistance for migration and have started assessing needed changes for implementing the new analytical framework.

### 2. Methodological Soundness — Scope
- Current scope of disseminated GFS:
  - Monthly, biannual and annual GFS cover solely the central administration (budgetary central government), not in line with GFSM 1986 and GFSM 2001 recommendations for general government coverage.
- MPEU internal/WHD coverage breakdown for nonfinancial public sector:
  - I. Coverage of the central administration:
    - Executive Branch
    - Legislative Branch
    - Judicial Branch
    - Deconcentrated units
  - II. Social Security and Pension Schemes:
    - Honduran Social Security Institute
    - NIRPEBE and NISPTE
  - III. Rest of the Decentralized Institutions
  - IV. Non Financial Public Enterprises
  - V. Local Governments (municipalities)
- Deconcentrated units and reporting:
  - Only 17 of a total of 25 deconcentrated units report detailed financial information for recording in the ISFM; the other eight units’ operations are recorded as transfers of the central administration.
- Social security schemes:
  - Three social security schemes reviewed: Honduran Social Security Institute, NIRPEBE, NISPTE.
  - A fourth pension scheme, Institute of Social Protection of Military Personnel, was not reviewed due to lack of data.
- Local governments:
  - There are 298 municipalities.
  - Only the 18 largest municipalities report detailed financial information to the SF, accounting for about 80 percent of central administration transfers; the rest are included under central administration transfers.
- CBH institutional classification and internal data:
  - CBH classification: (a) central government; (b) decentralized entities; (c) local governments.
  - CBH prepares data on central government and nonfinancial public sector for internal use.
  - CBH includes detailed financial information of 44 municipalities; the rest recorded indirectly through central administration transfers.
- Presentation and missing tables:
  - MPEU presentation follows Summary Table of Major Components in GFSM 1986; disseminated tables follow format of table A (government revenue and grants) and table C (economic classification of expenditures and lending minus repayment).
  - No tables for functional classification of expenditures, financing by type of debt holder, and financing by type of debt instrument (tables B, D and E).
  - Tables on debt cover external and domestic debt; domestic debt by security and holder; external debt by creditor.
  - Tables on external and domestic debt service are included in the annual report.

### 2. Methodological Soundness — Classification/sectorization
- Consolidation and coverage deviations:
  - Statistics on consolidated central and general governments are not prepared by the SF, contrary to GFS manuals’ recommendations for consolidated central government, consolidated general government, and consolidated nonfinancial public sector.
- Revenue and expenditure classification deviations:
  - Revenue excludes HIPC grants from international organizations other than the World Bank, the Inter-American Development Bank and IMF.
  - Revenue includes grants-in-kind, which should be recorded as memorandum item.
  - Other deviations:
    - Interest and commissions are recorded together.
    - Tax refunds are included as expenditure.
    - Amortization of domestic and external debt are included above-the-line.
    - Misclassification arising from lack of detailed information on uses of central administration transfers.
  - International standards recommend:
    - Commissions recorded separately as goods and services.
    - Tax refunds recorded in corresponding tax categories as negative revenue.
    - Amortization presented below-the-line in domestic and external financing.
- Published classifications:
  - Central administration revenue: (a) current revenue, (b) capital revenue, (c) external transfers (grants); current revenue split into tax and nontax, with tax divided into indirect and indirect (text retains source wording).
  - Central administration expenditure: (a) current expenditure, (b) capital expenditure and net lending, (c) debt amortization; capital expenditure divided into investment, financial investment (lending minus repayment), and transfers; current transfers disaggregated by recipient.
  - Financing of central administration classified as: (a) domestic credit; (b) external credit; (c) external transfers; (d) utilization of Monetary Absorption Letter (MAL); (e) other financing sources; (f) decrease in external assets; (g) change in arrears; (h) special accounts; (i) HONDUTEL transfers; (j) change in holdings of external bonds; (k) change in cash.
    - Notes on these items as given in source (e.g., MAL description, change in holdings of external bonds).
- CBH financing classification:
  - External, domestic, and external deposits.
  - External financing refers to drawings and amortization, exceptional financing (principal, interest and HIPC debt relief) and changes in arrears.
  - Domestic financing classified as central bank, rest of financial sector, bonds held by private sector, and floating debt.
  - CBH prepares annexes with detailed information.
- Domestic debt holder breakdown:
  - Disaggregated into public sector and private sector; public sector creditors divided into central bank, development banks, decentralized institutions, central government, and deconcentrated entities.

### 2. Methodological Soundness — Basis for recording
- Valuation:
  - All cash transactions reflect actual prices.
  - Where transactions recorded on accrual basis, market valuation or nearest proxy is used.
  - Debt recorded at face value in accordance with GFSM 1986.
  - Amounts denominated in foreign currency converted to Lempiras using monthly and daily average exchange rates provided by the CBH.
- Recording basis:
  - Revenue recorded on cash basis.
  - Most expenditure recorded on a payment order basis (proxy for accrual basis).
  - Interest presented on a cash basis.
  - All financing data, except arrears, recorded on a cash basis, in line with GFSM 1986.
  - Statistical discrepancy exists between overall deficit/surplus and total financing estimates due to above/below-the-line recording differences.
  - SF intends to use CBH financing data (on an accrual basis) starting with the next GFS publication.
  - ISFM recording bases: revenue and expenditure using the bases indicated above; will not be extended to record revenue on accrual basis and expenditure on cash basis.
- Grossing/netting:
  - Most transactions shown on a gross basis in line with GFSM 1986, including tax revenue and financing.
  - Tax refunds should be deducted from tax revenue, and financing should be presented on a net basis.

### 3. Accuracy and Reliability — Source data
- Main data sources:
  - Administrative systems: ISFM (controlled by the General Budget Directorate) and ISFMED (controlled by the General Public Credit Directorate).
  - ISFM covers detailed financial information for all budgetary units except eight deconcentrated units and some project management units.
  - ISFMED covers domestic and external debt information and is shared by SF and CBH; CBH only has access to information on IMF-provided financial resources recorded in ISFMED.
- Coverage and reporting:
  - SF collects annual budget financial information from decentralized institutions, local governments, and nonfinancial public enterprises; provided in hardcopy and processed by MPEU.
  - Coverage complete for decentralized institutions and nonfinancial public enterprises; local governments: only 18 of 298 municipalities report to MPEU, aggregated information for the rest is obtained from central administration transfers.
  - MPEU staff sometimes visit selected municipalities to obtain financial information; no data are collected by surveys.
- Approximation to required definitions and classifications:
  - Legal framework provides various definitions/structures of nonfinancial public sector, impeding a common institutional coverage.
  - PAL definitions: public administration comprised of (a) centralized public administration and (b) decentralized public administration; centralized public administration comprises executive branch and does not include legislative and judicial branches; centralized administration should control deconcentrated units.
  - Municipalities Law (Decree No. 134 of November 1990) Art. 97 requires delivery of approved budget and execution data to Secretariat of Planning, Coordination and Budget no later than January 10 of every year; Secretariat was dissolved by Decree No. 218 and functions transferred to SF in practice.
  - Accounting law establishes basic structure: (a) central government; (b) autonomous institutions; (c) public sector; (d) national public sector. Definitions provided in source text.
  - ISFM manual of classifications lists public entities comprising nonfinancial public sector; this list does not include local governments.
- Classification and system issues:
  - ISFM improvements: revamping treasury and accounting units; decentralizing recording process; secretariats now record directly in ISFM; centralization permitted multi-annual budget (IDB financing).
  - ISFM currently includes detailed financial information on 17 deconcentrated units.
  - Remaining shortcomings affecting GFS compilation:
    - Many items overly aggregated (e.g., central administration transfers to Congress, Judiciary, National Electoral Court).
    - ISFM payroll module not yet developed.
    - Several misclassifications.
    - No GFS module.
    - Treasury and accounting subsystems not finished.
- Payroll recording problems:
  - PAL does not include Judicial and Legislative branches as part of central administration; no ISFM payroll module.
  - Payroll recorded in older Budgetary Integrated System (BIS) and data transmitted to ISFM using a bridge table.
  - Premature phasing out of BIS caused serious problems; BIS re-introduced and currently both systems contain same updated information.
  - ISFM classifications for revenue and expenditure not revised to align with GFSM 2001.
  - Recommendation from source: develop GFS module in ISFM and give MPEU broad access to financial information in its database.
- Source alignment with GFSM:
  - General budget classification for revenue and expenditure is broadly aligned with GFSM 1986 valuation and time recording.
  - Source data for compiling financing (by CBH) mostly in accordance with GFSM 1986 definitions and classifications.
  - Recording of foreign loans is on a commitments basis, in line with GFSM 2001.

### 3. Accuracy and Reliability — Timeliness
- Reporting lags:
  - Decentralized institutions and public enterprises report monthly financial information to the SF two to three months after the reference month.
  - Municipalities report quarterly data two months after the reference quarter.
  - Monthly central administration data are processed directly by the ISFM.

*Source: _cr05230 - 1.         Integrity*

### 3.2       Statistical       techniques

### 3.2       Statistical       techniques

### Data compilation and statistical procedures
- Accepted statistical techniques, including extrapolation, are applied to preliminary data.
- When the SF does not receive detailed information (for example on the use of transfers by local governments), it uses the expenditure structure in the execution of previous budgets.
- Transfers from the central administration account for the bulk of local government revenue.
- Other statistical procedures (e.g., data adjustments and transformations, and statistical analysis) are not employed in compiling GFS.

### Assessment and validation of source data
- Informal verification procedures are being introduced to assess the accuracy of the GFS, with the exception of ISFM data.
- For ISFM, there is a control of the administrative process developed by budget staff (“preinterventores”); the MPEU is only a user of this information.
- The results of source-data reviews are not monitored and made available to guide planning.
- Balance between accuracy and timeliness is appropriate for central administration data; there are delays in local government data.
- The MPEU publishes preliminary data as soon as reasonably complete and accurate data become available, estimating missing data where necessary; preliminary estimates are replaced with final data after audited accounts have been produced.
- The status of the data used for each period is noted in the GFS publication.

### Assessment and validation of intermediate data and statistical outputs
- GFS for the central administration are based on budget data derived from the ISFM; intermediate data are validated against accounting data.
- Main statistical outputs of the GFS are validated against other economic statistics.
- The CBH compiles GFS data based on central administration records of SF; for the rest of the nonfinancial public sector, the CBH collects information directly from decentralized institutions and nonfinancial public enterprises; these two sets of information are reconciled.
- All discrepancies between GFS and intermediate data, and intermediate data and related accounting series, are investigated.
- Statistical discrepancies between the deficit/surplus and financing, and between financing and changes in gross debt, are investigated and resolved to the extent possible.
- Reconciliation with monetary and BOP data may involve occasional meetings with the CBH.

### Revision studies
- For annual data, revisions mainly result from routine replacement of preliminary data with final data.
- Revisions are not documented and no revision studies and analyses are prepared.

### Serviceability — Relevance
- The GFS timeframe is aligned with the budget cycle; the fiscal year is the calendar year.
- Budget preparation begins in April and includes consolidated reports of the financial statements and balance sheet of the entire public sector.
- Monthly GFS are used to monitor fiscal performance, including under the Fund program.
- Data used for budget preparation, monitoring, and projections for the multi-annual budget rely on GFS.
- Level of detail, coverage, and timeliness of the GFS could be improved to better assess government social and fiscal policy; there is limited information on donor financing of social expenditure.
- User feedback about relevance and practical utility of GFS is not obtained on a regular basis; no surveys are conducted, though some informal feedback occurs during SF presentations.
- Methodological changes have affected timeliness of annual and monthly publications but are expected to increase relevance; the SF will start using financing data compiled by the CBH.

### Timeliness and periodicity
- Dissemination of fiscal data follows GDDS recommendations, with exceptions (for instance, annual and monthly data on central and general government operations are not published).
- Biannual and monthly data on the central administration are published two to three months after the end of the reference month.
- Annual data on the central administration are currently published seven to nine months after the end of the reference year.
- Annual data of the public debt are published seven to nine months after the end of the reference year in the Annual Report of the SF.
- Complete and final accounts of the central administration are available in annual, biannual, and monthly publications.
- Honduras has not adopted the GDDS recommendation that quarterly central government aggregates should be disseminated within one quarter after the end of the reference period.
- Data on the central administration operations and debt are published with annual, biannual, and monthly periodicity; no data on consolidated central and general governments are published.

### Consistency
- The overall deficit/surplus and financing are not consistent owing to several factors:
  - Revenue is recorded on a cash basis and expenditure is recorded on a payment order basis.
  - Domestic financing reflects actual cash receipts and payments.
  - Difficulties exist in obtaining accurate information on expenditure financed through project loans and grants.
  - Coverage of the nonfinancial public sector differs between monetary and fiscal datasets, in part because of deficient sectorization of banking data.
- Transfers of the central administration to other levels of government are not fully reconciled due to incomplete data for some units of the other levels of government.
- GFS are consistent with expected trends and reflect discretionary changes, external shocks, and developments of economic activity.
- Historical data (five years) were revised to reflect methodological changes and modifications made to implement the ISFM; time breaks are not clearly identified and documented.
- Efforts are made to reconcile national accounts with GFS, but discrepancies arise due to differences in data sources and institutional coverage:
  - National accounts use accrual basis and include pension schemes as financial institutions; GFS include them as part of nonfinancial public sector.
  - National accounts establish levels of government including central government (all secretariats except Health and Education), Defense, public enterprises, and autonomous entities (including only four entities).
- Monetary accounts are not regularly reconciled with GFS regarding financing aspects for which the SF keeps records.
- Changes in nonfinancial public sector deposits are not currently cross-checked with deposits in depositary institutions.
- Domestic debt is produced by the General Directorate of Public Credit and is reconciled with the CBH.
- Although BOP and GFS use the same data source (ISFMED), no formal reconciliation is undertaken; key variables that should be reconciled include external transfers and capital and external financing.

### Revision policy and practice
- GFS published for the first time are preliminary; final data are published following revisions.
- Generally, revised data are published in the next publication.
- Revisions do not follow a schedule and are completed when all institutions provide revised data.
- Preliminary and final data are adequately noted in publications and are disseminated with the same detail and through the same media.
- No revision studies and analyses are undertaken.

### Accessibility — Data accessibility
- Formats permit identification and comparison of major aggregates and balancing items, but detailed underlying data are not well presented.
- Publications present coverage and detail set out in the GFSM 1986, though data are available for extensions in coverage and detail.
- Presentation of GFS is made in monthly, biannual, and annual reports in hardcopy and through the SF website.
- Data are presented in nominal terms; some annual report data (deficit/surplus) are presented in terms of GDP.
- National classifications are generally consistent with GFSM 1986, except for financing; the level of detail is significantly less than recommended.
- Monthly data are published for the 17 months up to the last month, and annual data include a set of five years.
- Honduras has not reported GFS data for publication in the Government Finance Statistics Yearbook (GFSY) since 1981.
- The main statistical publication of the SF is the Annual Report, which includes an important segment dedicated to GFS with annual GFS data and some graphs and tables.
- Through the SF website, monthly, biannual, and annual GFS data are disseminated.
- Presentation to Congress of the budget and accounting data follow pre-announced calendars, but the GFS are not disseminated according to a pre-announced calendar.
- Selected officials in the SF and the CBH obtain the GFS before other users.
- Nonpublished, non-confidential, disaggregated data are made available upon request; the availability and terms and conditions are not publicized in GFS publications.

### Accessibility — Metadata accessibility
- Concepts, scope, classifications, basis of recording, data sources, and statistical methods are not documented.
- No bridge tables show links between source data and GFS.
- Levels of detail are not adapted because metadata are not available.

### Accessibility — Assistance to users
- No contact person is identified in publications.
- The SF provides support in technical matters to users requesting assistance.
- The SF website presents a list of available publications.

* _cr05230 - 3.2       Statistical       techniques_*

### 0.1 Legal and institutional environment

### 0.1 Legal and institutional environment

### 0.1.1 The responsibility for collecting, processing, and disseminating statistics is clearly specified
- The CBH law, amended by Decree 228-96 of December 1996, assigns in its Article 25 primary responsibility to the Economic Studies Department (ESD) for the compilation of balance of payments (BOP) statistics.
- The CBH law does not refer to the responsibility for collecting and disseminating BOP statistics; nonetheless, the CBH has a long and well-known practice of disseminating BOP statistics.
- The NIS law approved by Decree 86-2000 of May 21, 2000:
  - Article 2: NIS primary responsibility is coordinating the NSS and establishes that the NSS comprises all government agencies and other public sector entities involved in collection, processing, and dissemination.
  - Article 5: NIS is responsible for elaborating and/or coordinating production of basic statistics for macroeconomic statistics, including BOP.
- Regulation of the NIS law (Executive Decree 0432-2001), Article 54: NIS's Public Sector and Foreign Trade Statistics Unit is responsible for collecting, assessing, and processing customs data on exports and imports and elaborating a database for dissemination of foreign trade data series.
- The Balance of Payments Section (BPS) collects source data from multiple public sector institutions and private entities, including: Executive Directorate of Revenues (EDR); Directorate of Public Credit (DPC) of the SF; Petroleum Technical Unit; National Port Enterprise; Ministry of Industry and Commerce; Honduran Tourism Institute; General Directorate of Migration Policy; foreign investment enterprises; large companies involved in foreign trade and/or production; commercial banks and other financial institutions; embassies; donors; and other CBH units such as the International Department.

### 0.1.2 Data sharing and coordination among data producing agencies are adequate
- Arrangements and working procedures between the CBH and other data producing agencies, and within CBH units, are in place to facilitate flow of source data for BOP compilation; periodic meetings and frequent telephone coordination support data flows.
- Three public sector institutions are involved in compiling foreign trade data: EDR, NIS, and CBH.
  - NIS has legal responsibility to compile and disseminate foreign trade statistics.
  - CBH has compiled and disseminated foreign trade data since the mid-1990s to provide timely data.
  - NIS and CBH compile foreign trade statistics based on customs data available at the EDR.
- Prior to 2001, foreign trade data disseminated by NIS and CBH were reconciled before release.
- Inadequate data sharing and inefficient coordination have adversely affected foreign trade statistics quality:
  - Different foreign trade data were disseminated by the institutions for 2002.
  - Severe deterioration in timeliness: the most recent monthly trade data on exports and imports published by the CBH correspond to November 2002.
- Arrangements exist between CBH and DPC for full on-line access to public sector external debt transactions recorded in UNCTAD’s DMFAS, but periodic coordination is needed to overcome inconsistencies in public external debt data disseminated by both institutions.

### 0.1.3 Respondents’ data are to be kept confidential and used for statistical purposes only
- Individual responses are treated as confidential and are not disclosed nor used for other than statistical purposes; respondents are informed of confidentiality and aggregated dissemination.
- Aggregation rules and outputs prepared by BPS prevent direct and indirect disclosure of individual data; access restricted to staff requiring information.
- Physical and IT security measures: steps to prevent unauthorized access to CBH premises; passwords required for accessing BPS computers.
- CBH Internal Work Regulation (approved November 29, 1994) Articles 44–46: provisions to avoid unauthorized disclosure, storage rules, strict reserve obligations, prohibitions on unauthorized use or movement of documents/equipment, penalties including termination, leave without pay up to eight days, written or verbal reprimands; temporary employees’ contracts include relevant provisions.
- NIS law Article 28: respondents informed of (a) voluntary or obligatory nature of responses; (b) consequences of misreporting; (c) right to correct previously reported data; (d) confidentiality; (e) ways of dissemination; (f) deadlines for providing data. Article 31: agencies shall treat data as strictly confidential and disseminate aggregate figures. Article 33 and Article 106 of NIS regulation identify staff behavior subject to penalties.
- CBH has not invoked NIS law articles when gathering data to compile BOP statistics; clarification of certain NIS regulations would facilitate implementation.

### 0.1.4 Statistical reporting is ensured through legal mandate and/or measures to encourage response
- CBH law Article 25: all government agencies, official and semi-official entities, shall furnish to the ESD information requested.
- CBH law Article 50: provides legal mandate for obtaining information on the financial sector directly or through the National Commission for Banks and Insurance.
- CBH law does not establish penalties for noncompliance with data reporting requirements nor provide legal authority to collect data from the nonfinancial private sector; nonfinancial private sector data have been provided on a voluntary basis.
- NIS law Article 25: all government offices, public and private sector enterprises, and individuals located in Honduras must furnish information requested by NSS entities.
- NIS law Article 32 and Article 105 of NIS regulations: identify respondents’ behavior subject to penalties; no penalties for noncompliance have yet been applied.
- CBH measures to secure cooperation: raising awareness of importance of statistics, providing respondents with data upon request, assistance completing forms, providing a point of contact, and visiting respondents when possible.

### 0.2 Resources

### 0.2.1 Staff, financial, and computing resources are commensurate with statistical programs
- BPS staffing and workload:
  - BPS currently comprises five staff, including the section chief.
  - BPS staff are responsible for collecting, processing, and disseminating balance of payments statistics10; responsibilities include survey-related activities for about 19 surveys conducted by the BPS and few other surveys jointly with CBH’s National Accounts Section.
  - Footnote: In mid-1995, the BPS comprised eight staff including the section chief.
- Staff retention and training:
  - In the past six months, two analysts reassigned from BPS to other CBH Departments, and two analysts resigned from CBH.
  - Currently, all BPS staff but one analyst are new; new staff assigned within the past five months.
  - All BPS staff required to be economists or to have concluded at least ¾ of university studies in economics.
  - Most staff lack formal training in BOP methodology and compilation techniques.
  - Unit Chief and only one of the BPS analysts have participated in Fund’s BOP statistics course and/or other formal courses.
  - New staff trained on BPM5 methodologies by more experienced staff via one-hour weekly workshops held outside official working hours; staff from other ESD sections participate.
  - At the beginning of each year, ESD develops a plan with internal and external training activities.
- Staffing needs:
  - Three or four additional permanent staff members are required for adequate compilation of BOP statistics, facilitating implementation of mission’s recommendations, expanding coverage (e.g., foreign direct investment in the maquila sector), and producing unpublished quarterly BOP estimates.
- Computing resources:
  - Each BPS staff has a computer, but only half of the equipment is adequate for efficient processing and database management; only one computer has internet access.
  - For compiling foreign trade statistics, CBH developed software to process data available at EDR’s SIDUNEA (UNCTAD database); CBH has access to EUROTRACE (EUROSTAT software provided to NIS).
  - Both software applications use the database available at the EDR; CBH staff indicate different results are obtained by these applications.

### 0.2.2 Measures to ensure efficient use of resources are implemented
- Management and planning:
  - CBH managers promote a shared vision; an Annual Operational Plan consolidated at departmental level is prepared and monitored/reviewed every four months; plan includes all ESD statistical products.
- Documentation and procedures:
  - Little documentation exists on processes to measure and compare efficiency in resource usage for BOP compilation versus other CBH statistical processes.
  - Procedures to improve efficiency in resources allocated to BOP surveys are not in place.
  - A manual stating duties/main responsibilities of every BPS analyst is being updated.
  - Insufficient documentation on procedures to minimize errors (coding, editing, tabulation).
  - Written instructions for survey respondents to reduce involuntary misreporting are not available.
  - No procedures to ensure staff who attended international BOP courses remain engaged with BOP statistics.
- Performance appraisal and standards:
  - CBH staff undergo annual performance appraisals, but performance indicators are not set at that time and performance is not reviewed against such criteria.
  - Insufficient effort made to complete conversion of BOP statistics from BPM4 to BPM5 (most countries have already moved).
- Technical assistance:
  - Most recent international technical assistance on BOP methodologies and compilation systems was provided by the IMF and the Central American Monetary Council in the mid-1990s.
  - An assessment of BOP methodology and compilation procedures was conducted by an international expert in early 2003 as part of a project to change the national accounts base year.

### 0.3 Quality awareness

### 0.3.1 Processes are in place to focus on quality
- CBH management and staff are aware that quality is essential and are sensitive to quality dimensions; however, no explicit measures are undertaken to focus on quality overall.

### 0.3.2 Processes are in place to monitor the quality of the collection, processing, and dissemination of statistics
- Existing procedures:
  - Some procedures established for examining quality of BOP statistics, but few are documented.
  - Basic reviews: new data compared with previously declared data; respondents contacted when inconsistencies detected.
  - Manual checks performed during data input for database loading.
  - Foreign trade source data manually reviewed to verify appropriate customs coding and detect inconsistencies between physical volumes and transaction values.
- Gaps:
  - No documentation to facilitate consistent quality review procedures across stages.
  - No defined procedures to consult users on data quality issues: no users’ surveys, no technical committees with user participation, and no special mechanisms on CBH website for user comments on quality.

### 0.3.3 Processes are in place to deal with quality considerations, including tradeoffs within quality, and to guide planning for existing and emerging needs
- Awareness and planning:
  - CBH management and staff are aware of tradeoffs among quality dimensions (e.g., timeliness vs. accuracy) and consider quality in work program planning.
  - Few formal processes exist to guide planning for emerging needs.
- Gaps in meeting user requirements:
  - No significant efforts to identify users’ needs for quarterly BOP estimates, quarterly external debt service and position data, or international investment position statistics; these data are either not elaborated or not disseminated by CBH.
  - No formal mechanisms (e.g., periodic meetings with policymakers and data users) to identify new BOP data requirements; users’ feedback is not requested or encouraged.
  - Participation of the President of the CBH in cabinet meetings might be a mechanism to identify other policymakers’ data needs.

### 1. Integrity

### 1.1 Professionalism

#### 1.1.1 Statistics are compiled on an impartial basis
- CBH law Article 12: CBH Board members act with total independence and under personal and joint responsibility according to legal framework.
- Professional competence emphasized in hiring, task assignment, and promotion.
- CBH tradition of promoting staff training through international courses and donor-financed postgraduate courses.
- No policy to encourage publication of methodological papers; internal workshops on BOP methodology are organized.

#### 1.1.2 Choices of sources and statistical techniques are informed solely by statistical considerations
- BPS staff choose data sources, methodologies, and techniques solely based on statistical considerations.
- Most available surveys were designed by CBH, including mid-1990s expert recommendations; some surveys do not request adequate or sufficient data.

#### 1.1.3 The appropriate statistical entity is entitled to comment on erroneous interpretation and misuse of statistics
- Staff monitor national press coverage and provide comments/clarifications when erroneous interpretations occur.
- CBH provides explanatory material when releasing BOP data and has organized occasional workshops for professional associations to promote adequate use of indicators.

### 1.2 Transparency

#### 1.2.1 The terms and conditions under which statistics are collected, processed, and disseminated are available to the public
- Terms and conditions are not readily available to the public despite established compilation and dissemination practices.
- Confidentiality is guaranteed by CBH Internal Work Regulation and NIS law articles, but this information is not readily available in CBH publications or website.
- The process of preparation, review, and approval of BOP statistics is not divulged to the public.
- CBH website provides an electronic mail address (webmaster@mail.bch.hn) for comments, suggestions, or questions on CBH statistics.

#### 1.2.2 Internal governmental access to statistics prior to their release is publicly identified
- With approval from CBH authorities, selected users (mainly government officials and staff from international organizations) obtain occasional access to BOP statistics before public release.
- Preparation and approval process: BPS prepares BOP statistics; reviewed by Chief of Financial Aggregates Unit; discussed with Deputy Manager of ESD; presented by Deputy Manager to CBH President; once approved, distributed to CBH Board members.
- The public is not informed that approval rests entirely with CBH and that there is occasional government access prior to public release.

#### 1.2.3 Products of statistical agencies/units are clearly identified as such
- BOP statistics are clearly identified as CBH products via CBH publications and website; all publications bear the institution’s logo and most tables include footnotes indicating the data source.
- Official government reports including BOP information acknowledge CBH as data source.
- Ministry of Finance’s Annual Report to Congress includes BOP and foreign trade tables; NIS also disseminates BOP data and references CBH as source.
- When NIS disseminates foreign trade data without CBH methodological adjustments, explanatory footnotes are included.

#### 1.2.4 Advance notice is given of major changes in methodology, source data, and statistical techniques
- CBH has not introduced major changes in BOP methodology, source data, or techniques in recent years; minor changes to components (e.g., travel, other services, foreign trade) were not announced in advance.
- CBH is working on conversion from BPM4 to BPM5 and informed the mission it would provide users with advance notice on this modification; internal BOP users are aware and have participated in technical discussions.

*Source: _cr05230 - 0.1 Legal and institutional environment*

### 1.3       Ethical       standards

### _cr05230 - 1.3       Ethical       standards

### Ethical standards and staff conduct
- The CBH Internal Work Regulations provide broad ethical guidelines for CBH staff.
- New staff members receive a copy of the regulation when they join the institution and participate in an orientation course that thoroughly covers these guidelines.
- All staff is periodically reminded that they must adhere to the regulation.
- Violation or nonobservance of the standards of conduct is penalized according to the provisions of articles 47 and 48 of the regulation.
- Work contracts for temporary employees include provisions to assure that contractual employees follow relevant work regulations applicable for permanent staff.

### Methodological soundness — Concepts and definitions (2.1)
- Concepts and definitions used to compile the BOP statistics are in broad conformity with the guidelines presented in BPM4.
- Progress has been made in the transition to the methodology of BPM5.
- Noted departures include:
  - the criterion of residency underlying the treatment of the maquila sector (enterprises operating under two special tax regimes: free trade zones and industrial transformation zones),
  - some foreign currency transactions among residents (misclassified in banks records).

### Methodological soundness — Scope (2.2)
- In principle, BOP statistics cover all resident-nonresident transactions.
- Resident institutional unit are defined in conformity with BPM5 concepts of economic territory, residency, and center of economic interest.
- The data cover the entire economic territory of Honduras, and also most maquila (free trade zones and industrial transformation zones) transactions.
- Key scope shortcomings:
  - Lack of recording of profits obtained by direct investment enterprises operating in the maquila sector underestimates the current account deficit.
  - The financial account excludes any direct investment transaction in the maquila sector (including reinvested earnings and undistributed profits).
  - Due to paucity of data sources, other transactions with nonresidents are not covered, including:
    - (a) several services, such as financial services, services between direct investment affiliates, etc.;
    - (b) foreign assets of the nonfinancial private sector, including direct investment enterprises and individuals;
    - (c) various foreign liabilities of the nonfinancial private sector; and
    - (d) financial transactions (assets and liabilities) of the maquila sector.
- These departures are kept under review.

### Methodological soundness — Classification/sectorization (2.3)
- The classification of BOP transactions conforms to BPM4 recommendations; deviations from BPM5 are kept under close review and most major differences are identified.
- Main deviations in national publications include:
  - Goods are not broken down in the five categories recommended by the BPM5 (general merchandise, goods for processing, repairs on goods, goods procured in port, and nonmonetary gold).
  - Goods for processing are not identified separately; these goods are recorded on a net basis (value added) under “services.”
  - Repair of goods are recorded under “services,” rather than identified separately within “goods.”
  - Various services items are not classified/disaggregated appropriately due to lack of breakdown in data sources (e.g., transportation not disaggregated by means; travel not shown by purpose).
  - Interest, dividends, and branch profits are classified as “services” instead of as “investment income.”
  - Remuneration of border and seasonal workers, local staff of foreign embassies located in Honduras, and Honduran embassies abroad are classified as “services” instead of as “labor income.”
  - Gross premiums and claims on insurance are included in “insurance services” rather than split into service charge and the remainder as BPM5 recommends.
  - Transfers are not disaggregated into current and capital transfers; only current transfers are registered under the current account.
- Presentation issues:
  - The presentation table used in national publications does not facilitate users’ analysis.
  - Short-term transactions involving bank assets and liabilities should be recorded “above the line” rather than “below the line.”
- Institutional sector breakdown differences:
  - BPM5 recommends four institutional sectors (monetary authorities, general government, banks, and other sectors).
  - BOP publications display three institutional sectors (private sector, official sector, and banking sector), which:
    - do not identify transactions of monetary authorities and banks separately (both included under banking sector),
    - do not identify transactions of the general government separately (included under official sector with other nonfinancial public sector transactions).
- CBH actions:
  - CBH has prepared a preliminary BOP statement in broad compliance with BPM5 classification/sectorization for the period 1993-2002.
  - CBH has provided these data to the IMF’s Statistics Department for publication in the International Financial Statistics and the Balance of Payment Statistics Yearbook.
  - CBH plans to release BOP data according to BPM5 for 1993-2002 in its publications and on the CBH website, once final review and approval is provided by CBH management.

### Basis for recording (2.4)
- Market prices and valuation (2.4.1):
  - BOP statistics are compiled in U.S. dollars.
  - Transactions reported in other currencies are converted into U.S. dollars at the exchange rate prevailing on the day of transaction; when actual date is not available, the average exchange rate for the reporting period is used.
  - Stocks in other currencies are converted into U.S. dollars at the end-month relevant exchange rate.
  - Where transaction estimates are derived from end-of-period position statements, transactions include exchange rate variations.
  - Transactions are generally valued at market prices as recommended by BPM5.
  - When transfer prices are identified for trade between direct investment affiliates, adjustments are made to value goods at market prices.
  - Services are valued at the price paid for services provided; goods are valued on an f.o.b. basis.
  - Example estimates for maquila based on recent CBH surveys: goods exports exceed US$ 2.4 billion, while imports of inputs and intermediate goods amount to about US$ 1.8 billion.
  - Historical note: During 2002, BOP statistics included US$ 1.4 billion of exports f.o.b. and US$ 2.8 billion of imports f.o.b.
- Recording basis (2.4.2):
  - Recording is done on an accrual basis in general, with change of ownership as guiding principle.
  - Merchandise trade statistics are recorded largely according to time of clearance by customs.
  - Most services are recorded on an accrual basis; government services are a major exception (recorded mainly on a cash basis).
  - Interest income is recorded on an accrual basis in balance sheets of CBH and commercial banks.
  - Interest on public sector external debt is recorded on a due date basis; no adjustments to convert interest to accrued values are made.
  - Other accounts are a mixture of cash basis and derived income/expenses using an implicit rate of interest.
- Grossing/netting procedures (2.4.3):
  - Procedures are broadly consistent with BPM5.
  - Most current account items are recorded on a gross basis.
  - Financial account items are mainly recorded on a net basis, separately for the individual asset and liability components.

### Accuracy and Reliability — Source data (3.1)
- Overview (3.1.1):
  - Data sources include an adequate mix of administrative records and surveys, supplemented by category-specific estimates.
  - The BPS has a business register identifying transactor units engaged in BOP transactions; the register is kept under review.
  - All surveys conducted by the BPS but one (the survey on workers’ remittances) are intended to cover relevant enterprises. All surveys are annual.
  - Currently, there are no surveys on direct investment and other financial transactions of enterprises located in free trade zones and industrial transformation zones, nor surveys on external debt and other financial transactions of other nonfinancial private sector enterprises.
  - Benchmark surveys are not conducted.
- Surveys and coverage:
  - Currently, 19 surveys are conducted by the BPS to obtain data on BOP transactions, as follows:
    - Seventeen annual surveys intended to cover relevant transactions of enterprises with nonresidents. One survey obtains financial data of foreign direct investment enterprises; four surveys obtain passenger and goods transportation services (by air, sea, and land); nine surveys obtain data on other services (courier, audiovisual, construction, royalties, insurance, information, tourism related services, professional services, and government services); and three surveys are designed to obtain data on grants, technical cooperation, and other transfers.
    - Currently, about 441 enterprises are being requested to provide data on their 2002 transactions. In 2002, 424 enterprises were requested to provide data on 2001.
    - One survey conducted in early January of each year estimates workers’ remittances; this is the only survey applied to a sample of respondents. Sampling techniques are not used. The survey is applied to Hondurans residing abroad that visit the country for Christmas and New Year’s holidays. More than 800 individuals were surveyed in 2003, and about 370 persons in 2002.
    - In coordination with the CBH’s National Account Section, the BPS conducts one annual survey intended to have full coverage of the goods for processing companies (“maquila sector”). About 230 enterprises provided data on their 2002 transactions.
    - Since early 2003, a pilot project to conduct a monthly survey to the maquila enterprises has been underway. More than 180 enterprises have provided monthly data for January–March 2003.
- Administrative and secondary sources:
  - The BPS obtains data from multiple institutions and CBH sections, including:
    - the EDR of the SF, and the NIS, for monthly foreign trade data on goods exports and imports;
    - full on-line access to public sector external debt daily data available in the UNCTAD’s DMFAS managed by the DPC of the SF;
    - the Ministry of Foreign Affairs for annual data on government services;
    - the Ministry of Technical Cooperation for information on official agreements with official donors;
    - the Honduran Institute of Tourism for data on nonresident’s travel expenditures (survey conducted twice yearly);
    - the General Directorate of Migration Policy for monthly number of travelers entering and exiting Honduras;
    - the National Commission of Banks and Insurance for quarterly data on insurance related services;
    - the National Ports Enterprise for annual data on port and related services;
    - the National Post Office for annual data on courier services;
    - the Honduran Telecommunication Enterprise for annual data on cable, television, internet, and telephone services;
    - the National Enterprise of Electricity for quarterly data on exports and imports of electricity and fuel consumption;
    - the Directorate of Civil Air Affairs of the Ministry of Transport for annual data on selected airline activities;
    - the Directorate of Mining Promotion for quarterly data on mineral exports (volume and value);
    - the Petroleum Technical Unit of the Ministry of Natural Resources for quarterly data on fuel imports (volume and value);
    - the Honduran Coffee Institute for monthly data on coffee exports (volume and value);
    - several private sector export enterprises provide monthly data on exports volumes for banana, pineapples, shrimps, "palma" oil, and mineral products;
    - some foreign government agencies and international organizations provide periodic information on grants to the Honduran public and private sector.
  - BPS also obtains information from other areas in CBH:
    - National Account Section for foreign direct investment transactions from a report form attached to the income tax statement, production of goods and services, and monthly indices of economic activity;
    - International Department for monthly data on nonfinancial private external debt transactions, foreign long-term liabilities of the financial sector, residents’ travel expense abroad, and other transactions included in the foreign exchange balance (“balanza cambiaria”);
    - Monetary Section for monthly data on CBH’s reserve assets, other financial assets and liabilities, monthly data on commercial banks’ positions on short-term foreign assets and liabilities, and CBH’s investment income data.
- Use of secondary information and market contacts:
  - Foreign trade data from primary sources are supplemented with information from numerous secondary data sources.
  - Local media and the internet are monitored for information on international transactions to update survey coverage and contact large transactors.
  - No meetings are held by the BPS with financial market participants and/or the business community to identify new developments for BOP compilation.
- First release content:
  - The first release of BOP statistics is based mainly on administrative data; data from surveys are only available for preparation of revised BOP data.
  - In Honduras, there is no international transactions reporting system in place.

### Accuracy and Reliability — Source data quality and adjustments (3.1.2)
- BPS staff are aware of differences in practices used in compiling source data and have developed procedures to adjust data, particularly foreign trade, to improve coverage, classification, and valuation according to BPM5.
- EDR foreign trade database adjustments and limitations:
  - No data on exports and imports of maquila enterprises have been included in the customs database or estimated for BOP statistics. BOP statistics include only value-added estimates of the maquila sector recorded under services according to BPM4.
  - CBH preliminary maquila estimates for 2002: goods exports exceed US$ 2.4 billion; imports of inputs and intermediate goods amount to about US$ 1.8 billion.
  - Several commodities exported by foreign direct enterprises to their affiliates are subject to major adjustments: replacing transfer prices with market price estimates and adjusting volumes based on data reported by large exporters.
  - Exports adjustments also include estimating unrecorded land exports to other Central American countries, including energy exported to neighboring countries, estimating goods returned to country of origin, and improving coverage of exports by enterprises under the Temporal Import Regime.
  - Imports f.o.b. adjustments include estimating freight and insurance components, estimating unrecorded land imports from other Central American countries, including energy imports from neighboring countries, estimating goods returned by trade partners, including estimates of unrecorded goods received as grants, and improving coverage of imports by enterprises under the Temporal Import Regime.
- Maquila data project and coordination issues:
  - The EDR is involved in a comprehensive maquila data project including exports, imports, and other macroeconomic data; software has been developed and initial data entry begun.
  - Project status is unclear due to lack of adequate coordination between the EDR, the NIS, and the CBH.
  - Pending issues include:
    - (a) identifying a mechanism for effective coordination among official institutions involved in foreign trade statistics;
    - (b) improving the design of the data entry form to include data needs for compiling BOP and national accounts statistics and specialized data requirements for international trade negotiations; and
    - (c) identifying resources and financing for personnel to enter relevant data from 2000, among others.
- External debt data limitations:
  - DMFAS is not currently used to obtain public external debt transactions and positions on an accrual basis as recommended by BPM5.
  - Data obtained from DMFAS on a due-for-payment basis are recorded in BOP statistics.
  - Misidentification of debtors and differences in debtor sectorization make data conciliation difficult.
  - External debt transactions are being classified by the sector of the executing agency rather than by sector of the debtor institution.

### Accuracy and Reliability — Timeliness (3.1.3)
- Administrative data:
  - Generally, administrative data are available on a monthly and/or quarterly basis and provided to the BPS with sufficient time for annual and quarterly BOP compilation.
  - Example: source data on foreign trade and public sector external debt are available within the following month of the reference period.
- Survey data delays and response rates:
  - Data from surveys are available with significant and irregular delays.
  - Distribution of questionnaires is timely, but response rate is low and quality of responses is poor.
  - For 2001, the average response rate for 17 enterprise-surveys conducted by the BPS was 46 percent (or 24 percent if only questionnaires with relevant data are considered).
  - Contributing factors: legal framework limitations, reduced number of staff, low priority assigned to surveys, no documentation on procedures to conduct surveys, lack of instructions for respondents, no clear definition of key concepts.
- Effect on releases:
  - Currently, data from surveys are still preliminary since 2000.
  - Generally, no data from surveys are available for BOP compilation earlier than 12 months after the end of the previous year.
  - Therefore, the first release of BOP statistics includes no data from surveys.
  - BOP revised data (prepared and disseminated during the second year after the end of the reference year) benefits from surveys data.
- Quarterly compilation:
  - After several years, compilation of quarterly BOP data for policy making decisions has been resumed in early 2003. Nevertheless, no quarterly BOP estimates have yet been disseminated to the public or to the IMF.

*Source: _cr05230 - 1.3       Ethical       standards*

### 3.2       Statistical       techniques

### 3.2       Statistical       techniques

### 3.2.1 Data compilation employs sound statistical techniques
- Overall assessment: Data obtained from most surveys conducted by the BPS are barely satisfactory.
- Survey collection and processing features:
  - All annual questionnaires are sent to enterprises by mail and fax, or, for some surveys, distributed by BPS staff through visits to each individual enterprise.
  - Currently, the only survey being conducted through electronic data delivery is the pilot monthly survey on the maquila sector.
  - Surveys are designed to be easily completed but lack of instructions for respondents to fill-out questionnaires seriously endangers the quality of data.
  - Surveys are not designed in a way consistent with computer processing.
  - No automatic controls to detect errors in processing administrative data or surveys data are available; nevertheless, intense and commended efforts are made by the BPS staff for identifying errors in data processing.
  - No questionnaires are available in the CBH website. Several respondents are sending their data replies using computer means.
  - No survey has adequate documentation of adjustment procedures applied to respondents’ data to improve the coverage, classification, valuation, and timing of the information received by the BPS.
  - Key data requested by the foreign direct investment survey are incomplete and misleading.
- Workers’ remittances survey:
  - The survey on workers’ remittances (“remesas familiares”) is the only survey applied to a sample of respondents and conducted at the airport by direct interviewers.16
  - Remesas familiares are currently the largest inflow of resources recorded in the balance of payments.
  - For 2002, “remesas familiares” recorded in the BOP statistics amounted to US$ 711 million (10 percent larger than foreign exchange recorded in the CBH’s balanza cambiaria for that period).
  - The number of Honduran nationals residing in the United States is obtained from the USA Embassy in Tegucigalpa. These data (adjusted by a factor) are multiplied by the average amount sent to relatives and friends in Honduras declared by respondents.
  - The statistical technique used for estimating “remesas familiares” does not consider the age structure of Honduran families residing abroad (estimates on remittances are sensitive to the age structure; minors should not be assumed to send remittances).
  - No estimates on the number of Honduran nationals residing in Europe (presumably a relevant number) are used for the estimation.
- Footnote:
  - 16 Beginning in 2003, the survey coverage includes two major airports (one in Tegucigalpa and the other in San Pedro de Sula).

### 3.2.2 Other statistical procedures (data adjustments, transformations, and analysis)
- Adjustments and techniques:
  - The BPS conducts adjustments to estimate goods exports and imports consistent with BPM5, but some statistical techniques used for adjusting foreign trade data are not sound.
  - Example: The BPS converts imports from c.i.f. to f.o.b. values using a fixed factor for freight and insurance (equivalent to 10.5 percent of c.i.f. value), despite available customs data including both c.i.f. and f.o.b. import values in the Unified Declaration Document.
  - The Unified Declaration Document does not disaggregate freight and insurance by single products, but compilers prepare estimates.
  - Foreign trade data reconciliation with major Central American trade partners are not conducted, but undercoverage of exports and undervaluation of imports are identified by official trade data reported by those countries.
  - Trade credits related to exports are estimated on the basis of partial information contained in banks documents.
- Transactions not fully covered or disaggregated that could be estimated with standard techniques:
  - Financial services related to banking activity.
  - Commissions on external debt operations.
  - Several transport services.
  - Some foreign direct investment transactions.
  - Other financial transactions made by private sector enterprises and individuals with nonresidents.

### 3.3 Assessment and validation of source data
- 3.3.1 Source data assessment practices:
  - Accuracy of survey data is not routinely assessed owing to severe BPS understaffing.
  - No documentation on sampling and nonsampling errors, undercoverage, underreporting, or misclassification is available or regularly reviewed.
  - Non-response is monitored, but documentation refers only to overall number of questionnaires received; there is no information on number of questionnaires with complete and relevant responses or identification of specific components with low response.
  - The BPS regularly assesses foreign trade data for coverage, misclassification, and coding errors; the results are monitored, documented, and used to guide planning. High-value transactions are confirmed with respondents.
  - In early 2003, the NIS disseminated foreign trade data for 2002 obtained by using EUROSTAT’s EUROTRACE to access the EDR’s database (SIDUNEA). These data differ from data disseminated by the CBH based on source data also provided by the EDR. The CBH decided in March 2003 to suspend the publication of monthly foreign trade data; the last CBH monthly data published correspond to November 2002.

### 3.4 Assessment and validation of intermediate data and statistical outputs
- 3.4.1 Validation of intermediate data:
  - Some survey data are validated against independent sources, including local media for high-value direct investment and comparisons with the CBH’s monthly foreign exchange balance (balanza cambiaria).
- 3.4.2 Assessment and investigation of statistical discrepancies:
  - Selected series behavior is cross-checked with related series and indicators.
  - Data on interest payments on external debt and receipts on reserve assets are regularly assessed in relation to corresponding position data.
- 3.4.3 Investigation of statistical discrepancies and indicators of problems:
  - Errors and omissions are closely monitored; staff seek to understand them by cross-checks between current, capital, and financial account entries.
  - Bilateral comparisons are conducted with foreign trade data of other Central American countries and with the United States for selected commodities and maquila exports.
  - Public sector external debt data are compared with creditors’ data and information from international organizations.
  - Some selected external debt transactions are not compared with data produced by international institutions, such as the Joint BIS-IMF-OECD-World Bank table on external debt statistics, or the BIS locational international banking statistics.

### 3.5 Revision studies
- 3.5.1 Revisions analysis:
  - No studies are conducted to evaluate revisions to BOP statistics.
  - BPS staff is committed to improving the compilation process of BOP statistics.

### 4. Serviceability — Relevance, Timeliness, Consistency, Revision policy
- 4.1 Relevance
  - No specific actions by the CBH to ensure BOP data addresses users’ concerns; no established process of regular consultation with users (ministries, private sector, academia).
  - CBH takes into account concerns and suggestions gathered verbally through participation of CBH president and senior management with other senior public sector officials.
  - BPS staff regularly participate in international statistical meetings and seminars organized by IMF, LACME, and CAMC.
- 4.2 Timeliness and periodicity
  - 4.2.1 The CBH disseminates annual BOP data within six months after the end of the reference period; this timeliness is consistent with GDDS recommendations. Quarterly BOP estimates are prepared but not disseminated to the public.
  - 4.2.2 The CBH compiles annual BOP statistics; periodicity is consistent with GDDS recommendations. The CBH is compiling preliminary quarterly BOP estimates.
- 4.3 Consistency
  - 4.3.1 Internal consistency:
    - Over the long run, annual net errors and omissions in the BOP have been large, but relatively stable.
    - During 1997-2002, net errors and omissions have been equivalent to 49.5 percent of the current account deficit of the BOP.
    - Over the same period, net errors and omissions averaged about 1.9 percent of total goods’ exports and imports, ranging between 2.7 percent in 1997 to 1.0 percent in 1997.
  - 4.3.2 Reconcilability over time:
    - When CBH introduced changes in source data, methodology, or techniques, historical BOP data were not reconstructed.
    - Example: A new methodology for estimating workers’ remittances was recently introduced, but data were not adjusted for previous years.
    - There are no methodological notes identifying or explaining main breaks and discontinuities in BOP component time series.
  - 4.3.3 Consistency with other data sources:
    - BOP data can be broadly reconciled with foreign trade, national accounts, and monetary statistics produced by the CBH.
    - Some inconsistencies related to the treatment of the maquila sector were identified: profits of the maquila sector are included in the BOP (although substantially understated), but excluded from value added in the national accounts.
    - Balance of payments data are consistent with public sector external debt statistics produced by the CBH, generally based on UNCTAD’s DMFAS data.
    - Some inconsistencies exist between BOP data and government finance statistics due to classification/sectorization and recording differences.
    - Some relatively large differences exist in public sector external debt position and debt service data prepared/published by the CBH and the SF, mainly on coverage, classification/sectorization, and basis for recording practices.
    - Honduras is not compiling nor disseminating the international investment position data.
- 4.4 Revision policy and practice
  - 4.4.1 Revisions schedule:
    - The revision cycle for BOP statistics follows a regular procedure, but is not made known to the public.
    - Data published for 2000-2002 are considered preliminary. No documentation of revisions is accessible to users.
    - New source data are incorporated in BOP statistics as early as possible, but a regular, well-established, and transparent schedule is not made available to the public.
    - The revision process takes into account the timing for discussion and approval of the monetary program by the CBH board.
  - 4.4.2 Identification of preliminary data:
    - Initially published BOP data are preliminary and subject to revisions; preliminary data are clearly identified in a footnote.
    - Revised data are disseminated with the same level of detail and the same format as previously published data.
  - 4.4.3 Public studies of revisions:
    - Data revisions are not subject to a formal assessment, and written explanations are not regularly included when disseminating BOP data.
    - No analysis of preliminary versus revised data is published for major aggregates; there are no studies or analyses of revisions made and therefore no publication in this regard.

### 5. Accessibility — Presentation, media, release practices
- 5.1 Data accessibility
  - 5.1.1 Presentation and interpretation:
    - The presentation of BOP data disseminated by the CBH does not facilitate proper interpretation; CBH disseminates BOP data through one official summary table, accompanied by a few tables with data on foreign trade and external debt.
    - Interpretation is hampered by inadequate classification of major BOP transactions (maquila sector, investment income, exceptional financing).
    - CBH provides detailed tables on BOP components (not included in publications or on the website) to internal and selected external users; these tables provide detailed breakdowns and adjustments useful for interpretation.
    - BOP data in most CBH publications are not accompanied by charts, explanatory texts, nor key concepts and definitions. BOP statistics are not seasonally adjusted.
  - 5.1.2 Dissemination media and formats:
    - BOP data are disseminated in several CBH publications, all available at the CBH website.
    - Publications including BOP statistics:
      - The monthly Statistics Bulletin: summary table with BOP aggregates (annual data for the past five years), two tables on exports f.o.b. by main product (annual data for the past five years and monthly data for the past two years) and imports c.i.f. by main group products (same periods). No explanatory text nor charts on BOP statistics.
      - The Annual Report: brief economic analysis and four tables on related BOP data (annual data for the past three years) and a chart on net international reserves of the banking system.
      - The Monetary Program: brief economic analysis and specific indicators (exports of goods and services, value added of the maquila sector, current transfers and other financial inflows, etc). No tables with BOP data are included.
      - Honduras in Figures: ten tables on BOP related data (annual data for the past three years); no explanatory text nor charts.
    - On the CBH website three tables are provided in an Excel file: the official BOP summary (annual data for the past 13 years); exports f.o.b. by product (annual data for the past 13 years); imports c.i.f. by category (annual data for the past 13 years).
    - No separate BOP statistical publication has been prepared by the CBH in recent years.
  - 5.1.3 Release schedule:
    - BOP data are not released according to a preannounced schedule; there is no specific date and/or time when BOP statistics are released to the public.
  - 5.1.4 Simultaneous availability:
    - BOP data are not released simultaneously to all users. Once approved, data are occasionally provided to selected users (mainly government officials and staff of international financial institutions).
  - 5.1.5 Availability of nonpublished subaggregates:
    - Nonpublished but nonconfidential BOP subaggregates are made available upon request; special tabulations (bilateral foreign trade data, subaggregates of minor export products, etc.) are usually provided to some users on demand.
    - No specific reference is made in BOP publications about the availability of nonpublished subaggregates and the terms and conditions on which they are made available.

*Source: _cr05230 - 3.2       Statistical       techniques (PDF).*

### 5.2       Metadata       accessibility

### 5.2 Metadata accessibility

### Documentation on concepts, scope, classifications, basis of recording, data sources, and statistical techniques
- Metadata, including documentation on concepts, scope, classifications, basis of recording, data sources, and statistical techniques are not available for BOP statistics.
- Departures from internationally accepted standards are not documented.

### Levels of detail adapted to users
- No brochure is available to inform general users about BOP and other external sector statistics.
- No document on sources and methods has been produced to inform analysts and other users of BOP compilation methods and techniques.

### 5.3 Assistance to users

### Contact persons and responsiveness
- The CBH website identifies specific individuals who may be contacted by users (email addresses) for consultation on BOP statistics.
- Prompt and knowledgeable service is available to users on BOP statistics.
- Assistance to users is not monitored through periodic users’ surveys or equivalent mechanism.

### Catalogs and charges
- A catalog of all CBH publications and documents is listed on the CBH website and is kept under review.
- The CBH does not charge for any statistical products and services.

*Table 5. Honduras: Data Quality Assessment Framework—Summary of Results for Balance of Payments Statistics (Compiling Agency: Central Bank of Honduras)*
- Key to symbols: NA = Not Applicable; O = Practice Observed; LO = Practice Largely Observed; LNO = Practice Largely Not Observed; NO = Practice Not Observed; SDDS = Complies with SDDS Criteria
- Assessment categories and selected findings (comments preserved):
  - 0. Prerequisites of quality
    - 0.1 Legal and institutional environment: X — Insufficient foreign trade inter-institutional coordination. Unclear reference to legal framework in surveys.
    - 0.2 Resources: X — Understaffing, inadequate computer equipment
    - 0.3 Quality awareness: X — Few and undocumented processes for monitoring data quality, and guiding planning for users’ needs
  - 1. Integrity
    - 1.1 Professionalism: X
    - 1.2 Transparency: X — Terms and conditions under which data are collected and disseminated are not made public.
    - 1.3 Ethical standards: X
  - 2. Methodological soundness
    - 2.1 Concepts and definitions: X — BOP data are compiled in broad conformity with BPM4 and progress is being made to adopt BPM5. Residency criteria are not totally consistent with international standards
    - 2.2 Scope: X — Incomplete data coverage in some balance of payments components
    - 2.3 Classification/sectorization: LNO — Classification of transactions and sectorization depart from BPM5 in a number of ways
    - 2.4 Basis for recording: X — Interest and several services are not recorded on an accrual basis
  - 3. Accuracy and reliability
    - 3.1 Source data: X — Weak source data on direct investment, some services, and nonfinancial private sector, including the maquila sector. Delays in data from surveys
    - 3.2 Statistical techniques: X — Insufficient quality control in data compilation. Some estimations do not employ sound techniques
    - 3.3 Assessment and validation of source data: X — Data from most surveys are not regularly assessed
    - 3.4 Assessment and validation of intermediate data and statistical outputs: X — Survey data are not widely checked against other data sources
    - 3.5 Revision studies: LNO — No revision studies are conducted, but revisions are carried out routinely
  - 4. Serviceability
    - 4.1 Relevance: X — User needs are not monitored through a regular consultation process with users
    - 4.2 Timeliness and periodicity: O — Quarterly data are currently produced but not disseminated
    - 4.3 Consistency: X — Large errors and omissions. Data series are not reconstructed when changes in data sources or statistical techniques are introduced.
    - 4.4 Revision policy and practice: X — Revision processes are not made public.
  - 5. Accessibility
    - 5.1 Data accessibility: LNO — Data are not published in a clear manner, and users need more detailed tables. Users are not informed of availability of balance of payments detailed data
    - 5.2 Metadata accessibility: NO — No metadata are prepared.
    - 5.3 Assistance to users: X — Insufficient information in contact person for assistance to users

### VI. Monetary Statistics

### 0. Prerequisites of quality — Legal and institutional environment
- The CBH law, the National Commission of Banks and Insurance Law, and the Law of Financial Institutions govern the banking system; CBH is in practice responsible for collecting, compiling, and disseminating monetary statistics, though data sources are shared with other institutions such as the NCBI.
- Article 2 of the CBH law: CBH responsible for conducting monetary and credit policy; Economic Studies Department (ESD) compiles monetary statistics (Article 25).
- Article 50 of the CBH law authorizes the CBH to request information from financial institutions to assess liquidity and solvency.
- Article 6 of the NCBI law: banks, insurance and finance companies, savings and loans, stock exchange, leasing, pensions funds, and other financial institutions are under NCBI purview; these institutions must submit monthly balance sheet data to NCBI (Article 27).
- Legal mandate regarding publication is limited to the central bank balance sheet (Article 66 of the CBH law).
- Monetary Section (MS) of the ESD compiles a financial survey consolidating CBH and depository corporations’ accounts and publishes monthly monetary and financial data on CBH website.
- Official publications lack indication of the department officially responsible for compilation and dissemination of monetary statistics.
- Data sharing and coordination:
  - Adequate arrangements ensure flow of information between Accounting Department, ESD, and NCBI.
  - Central bank balance sheet provided to MS electronically one day after month end.
  - Depository corporations’ data collected by NCBI 10 working days after month end and stored in the Management System accessible to authorized CBH staff.
  - CBH collects weekly statistical information electronically from banking institutions.
  - Honduran Stock and Central American Stock exchanges provide data on central bank and government securities holdings.
  - No regular meetings or workshops with NCBI to improve data sharing arrangements.
- Confidentiality:
  - Article 15 of NCBI law addresses confidentiality; Articles 31 and 38 of NIS law refer to confidentiality for NSS members.
  - Article 29 of the Financial Institutions Law and CBH employee code of conduct (Articles 44, 45, 46) require staff to observe secrecy; penalties established for disclosure.
  - Information systems protected by individual passwords; data disseminated in consolidated form; financial system consists of more than 25 institutions, preventing residual disclosures.
- Reporting and enforcement:
  - Article 27 of NCBI law: supervised institutions must send monthly financial statements and detailed data not later than the tenth day of each month.
  - Article 13, section 4 of NCBI law provides sanctions for noncompliance.
  - Article 68 of the Financial Institutions Law: failure to comply (including misreporting) punishable by a fine. Late reporters charged L1,000.00 for each day late.17
  - In practice, these penalties have become obsolete and do not prevent delays in reporting by banks.
  - NCBI provides technical support to declaring institutions; CBH maintains points of contact and provides weekly economic indicators to declaring institutions.

### 0.2 Resources
- Staffing and training:
  - The Monetary Section has ten staff members devoted to the compilation of monetary statistics, of which nine have a degree in economics and one is an accountant.
  - Besides on-the-job training, staff have had little opportunity to participate in courses by international organizations (e.g., IMF Monetary and Financial Statistics training course) and regional seminars (Central American Monetary Council, CEMLA).
  - CBH management has transferred MS staff to other units, resulting in loss of well-trained staff.
  - On average, the professional staff in the MS has a little over three years of experience and lack of adequate training in compilation of monetary statistics.
- Computing and systems:
  - All staff members have personal computers with standard software and are connected to the CBH network; internet access is limited to two computers.
  - Some computers lack required capability for processing large spreadsheets.
  - Derivation and compilation of monetary statistics from balance sheet data are performed using Excel spreadsheets.
  - An ongoing project to develop a database on monetary statistics is expected to be completed by end-2003.
- Financial resources:
  - Overall financial resources for compiling monetary statistics are adequate.
  - Adoption of the new Manual on Monetary and Financial Statistics (MFSM) will require strengthening MS in training and computer-hardware upgrades.
- Resource efficiency and quality control:
  - CBH programs subject to budget considerations and performance assessments; no specific process measures resources used to compile monetary statistics vis-à-vis other statistical data.
  - Annual programs designed by individual departments and approved by Board of Directors; monitored and reviewed periodically.
  - Procedures exist to minimize processing errors, but no consistent cross-checking of macroeconomic data to identify and minimize differences.
  - MS staff historically maintained regular contacts with IMF’s Statistics Department for assistance.

17 This penalty has increased to L2,000.00 in accordance with resolution No 256/2708-03-2001 of the NCBI, of April 17, 2001.

### 0.3 Quality awareness
- Processes focusing on quality:
  - CBH recognizes importance of quality but does not have processes or activities that focus exclusively on quality of monetary statistics.
  - MS, in collaboration with NCBI, verifies reporting practices and checks inputted data for accuracy.
  - CBH balance sheet and other financial statements are externally audited annually.
  - Depository corporations and other supervised institutions must publish annual balance sheets and income statements with external auditors’ reports in two national newspapers (Article 32 of NCBI law).
- Monitoring quality of collection, processing, dissemination:
  - Validation procedures assess reasonableness of reported data on a bank-by-bank basis using computer software.
  - Supervised institutions use a single plan of accounts facilitating reporting.
  - MS consults directly with reporting institutions to verify possible misclassifications.
  - No other body outside MS provides guidance on quality or strategies for improving data production.
  - Production automated through linked worksheets with built-in checks and validation matrices at every production stage.
  - CBH does not follow a proactive policy to obtain external user feedback through surveys or periodic meetings.
- Trade-offs and planning:
  - Recognition of trade-offs between accuracy and timeliness (example: monthly monetary vs. weekly data where accuracy/reliability is sacrificed for timeliness).
  - No formal mechanism addresses quality trade-offs or seeks user feedback to guide planning for emerging data needs.
  - CBH does not promote meetings with press and other users to explain monetary developments; MS does not hold meetings with depository corporations to discuss data reporting.
  - MS plans to revise methodology, data collection, and compilation procedures following publication of MFSM to foster consistency with new standards.

### 1. Integrity

### 1.1 Professionalism
- Impartial compilation:
  - CBH law entrusts management to a board of five directors (Article 6); Article 16 states the board will exercise functions with absolute independence within law regulations and norms.
  - Internal regulations ensure staff are accountable for professional conduct; MS staff work exempt from pressures from management or other government agencies.
  - Article 12 provides a general framework for a degree of independence.
- Staffing and professional development:
  - Professional skills are prerequisites for hiring; promotion considerations include professionalism, productivity, and efficiency.
  - Professionalism promoted via internal seminars, post-graduate studies, meetings with other central banks and international organizations.
  - MS staff encouraged to conduct research and publish.
  - Validation and verification work demands substantial time; insufficient resources dedicated to analyses and statistical developments.
- Source and methods choices:
  - Source data (CBH and depository corporations’ balance sheets) meet statistical requirements; choices of data sources, statistical methods, and definitions are based solely on methodological considerations.
  - The public is not informed on choice of methodology.
- Commenting on misuse:
  - When monetary statistics are misinterpreted, CBH designated officials seek to make needed corrections via appropriate channels.
  - CBH does not provide explanatory materials to prevent misuse of statistics.

*Italic source attribution line.*

### 1.2       Transparency

### 1.2 Transparency

### 1.2 Transparency — key findings
- Comprehensive terms and conditions under which the CBH collects, compiles, and disseminates data are not available in the CBH publications.
- The public has access to the CBH law, the Financial Institutions Law, the NCBI law and the NIS law in the CBH’s Library, but the CBH law is not posted on its website.
- No government officials outside the CBH have access to the data before their release to the public.
- The Semiannual Statistical Bulletin and the monthly statistical data posted on the web bear the CBH logo specifying the source of the basic data, but departments or divisions responsible for compiling and publishing statistics are not identified.
- The CBH does not explicitly request acknowledgement of the source when its monetary data are reproduced, although the CBH is identified as the source.
- Changes in methodology, source data, and statistical techniques are not announced in advance or explained at the time new data are published.
- Users are unaware that partial data on deposits of the rest of the public sector, in the banking system, come from administrative records of autonomous institutions and nonfinancial public corporations.

### 1.3 Ethical standards — key findings
- Guidelines on ethical standards for CBH staff are contained in the internal publication “Employee Code of Conduct,” which establishes rights, duties, and sanctions for noncompliance and is applicable to all CBH staff.
- The code of conduct is not posted on the CBH website.
- Employees who violate data confidentiality face penalties (Chapter XVII, Article 46, of the code of conduct).
- New CBH staff participate in a three-day training program on the fundamental duties and powers of the CBH and its internal regulations.
- Most contractual appointments specify clearly the rights and obligations recruits must follow.

### Implications for transparency and ethical practice
- Lack of publicly available, comprehensive terms and conditions and absence of advance notice of methodological changes reduce transparency and user awareness.
- Internal ethical guidelines exist and include sanctions, but lack of public posting of the code and of the CBH law limits external visibility of safeguards.

### 2. Methodological soundness

### 2.1 Concepts and definitions
- The analytical framework for compiling monetary statistics follows concepts and definitions generally based on the IMF’s draft Guide to Money and Banking Statistics in International Financial Statistics of December 1984.
- The CBH, together with other central banks of the region, is engaged in implementing the new Manual on Monetary and Financial Statistics (MFSM).
- A financial survey is compiled monthly as a consolidation of accounts of the CBH and other depository corporations: 22 commercial banks, three development banks, three savings and loan institutions, and eight finance companies.
- Monetary and credit aggregates identified in the financial survey are:
  - (i) money liabilities: currency in circulation plus demand deposits in domestic currency of the private sector (enterprises, individuals, and nonprofit institutions serving households);
  - (ii) quasi-money liabilities: savings and time deposits in domestic and foreign currencies, other deposits, deposits for buying US dollars, bonds and mortgage bills, special savings, central bank bonds in domestic and foreign currencies, other liabilities, and repurchase agreements if undertaken between the banking system and private enterprises;
  - (iii) net foreign assets (gross reserves minus foreign liabilities), other medium-and long-term foreign assets and liabilities;
  - (iv) domestic credit disaggregated by net claims on public sector (central government and the rest of the public sector) and credit to the private sector, denominated in domestic and foreign currencies;
  - (v) other items (net).
- Net foreign assets include commercial banks’ foreign currency denominated reserve requirements but do not include commercial banks’ holdings of foreign currency-denominated monetary absorption certificates (CADD).
- Deviations from key MFSM concepts and definitions are not clearly identified or stated in CBH publications.
- The section that follows compares present practices with MFSM recommendations and indicates areas where CBH has yet to make changes.

### 2.2 Scope
- The financial corporations sector comprises: the CBH, 22 commercial banks, three development banks (including FONAPROVI), three savings and loans institutions (AAP), eight finance companies, 96 credit cooperatives (30 reporting to the CBH), 11 insurance companies, six depository warehouses (Almacenes generales de depósito), 12 exchange houses, one second-tier bank (Regimen Aportaciones Privadas), the CNBI, the Deposit Insurance Fund, two representative offices of foreign banks, pension funds, two securities exchanges, security brokerages, and other providers of financial services.
- Three commercial banks, one specialized municipal-owned bank, and four finance companies that were liquidated in past years are included in the monetary data.
- Classification recommendations and reclassifications noted:
  - Fonaprovi should be reclassified from a development bank to other financial corporations (does not accept deposits).
  - Pension funds and insurance companies should be included in an insurance and pensions funds survey.
  - Depository warehouses, exchange houses, Honduran and Central American Securities Exchange, the CNBI, and the deposit insurance fund should be classified as financial auxiliaries (do not issue instruments included in broad money).
  - Savings and credit cooperatives that issue liquid liabilities need to be included within the depository corporations survey; work is underway to include these institutions in monetary statistics.
- Monetary statistics include depository corporations’ domestic headquarters and all domestic branches.

### 2.3 Classification/sectorization
- Sectorization principles in CBH monetary statistics are not fully consistent with the MFSM, which recommends residency based on “center of economic interest” and classification into sectors per the 1993 SNA.
- MFSM recommended sectoral breakdown (for reference in comparison): (i) central bank; (ii) other depository corporations; (iii) other financial corporations; (iv) central government; (v) state and local government; (vi) public nonfinancial corporations; (vii) other nonfinancial corporations; (viii) other resident sectors.
- CBH sectoral groupings used are: (i) central government; (ii) rest of the public sector; (iii) private sector (enterprises and individuals); (iv) financial sector (central bank, commercial banks, development banks, savings and loans institutions, finance companies); and (v) nonresidents.
- Deviations from MFSM recommendations occur in four cases:
  - (i) residency criterion for residents/nonresidents applied only for central bank accounts; commercial banks focus sectorization on currency denomination;
  - (ii) rest of the public sector includes local governments, nonfinancial public corporations, and social security indistinguishably;
  - (iii) credit to the private sector is obtained as a residual;
  - (iv) surveys other than the central bank do not consistently apply financial sector sectorization.
- Classification of financial instruments is generally consistent with IMF methodology, based on liquidity and legal characteristics, but is less detailed than MFSM requires.
- Repos: CBH conducts repurchase agreements with commercial banks using CAM and government bills with commitments to repurchase at a fixed price between 1–14 days. These are reflected in the CBH balance sheet as collateralized loans (as recommended), but commercial banks reduce their outstanding portfolio of securities and create off-balance-sheet contingent assets and contingent liabilities to record repos, deviating from international practice and requiring adjustments to restitute original portfolios in monetary statistics.

### 2.4 Basis for recording
- MFSM valuation principle: use market prices or market-price equivalents (fair values); loans valued at creditors’ outstanding claims (book value); foreign-currency stocks and flows converted at market exchange rates prevailing at recording time; holding gains/losses recorded in a revaluation account.
- CBH valuation practices:
  - Domestic securities recorded at purchase price (acquisition cost) and revalued through redemption applying accrued accounting rules.
  - Central bank securities recorded at book value; fair value complicated by absence of clear information on unpaid realized losses.
  - Gold valued at the market price quoted in the London market.
  - Loans recorded at nominal outstanding principal; accrued interests imputed to receivable accounts. Loan valuation is not adjusted for expected loan losses (consistent with MFSM).
  - Deposits valued at book value (principal plus accrued interest).
  - General and specific provisions for loan losses are recorded under “capital accounts,” deviating from MFSM recommendation to include such provisions under “other liabilities.”
- Foreign currency transactions converted at market exchange rate on transaction date; stocks converted at end-of-period buying market exchange rate calculated daily on the average of exchange rates bid by commercial banks to the CBH. Valuation gains/losses recorded in profit and loss accounts.
- MFSM recommends compiling data on stocks and on three flow components (transactions, revaluations, other changes). In Honduras:
  - Banks do not provide financial information on flows.
  - CBH does not derive transactions from stock data for monetary statistics purposes.
- Recording basis (accrual vs cash):
  - Commercial banks recognize interest income in income statements as it accrues, but interest is classified as part of receivable accounts rather than with the underlying instrument.
  - Interest due but not paid up to three months is recorded in arrears; otherwise, interest is estimated and accounted for in contingency accounts (off-balance-sheet).
  - Dividend income recorded as income only when received.
  - Interest accruing on deposits, loans, and securities other than shares is incorporated into accounts payable and not into the outstanding amount of the financial liability.
  - Current monetary data do not allow allocation of accrued interest to specific instruments or classification of accrued interest by sector.
  - CBH accounts classify interest accruals in other assets/other liabilities rather than including them in underlying asset/liability values. Consequently, accrued interest is included in the other items (net) category of the monetary survey and all money and credit aggregates are recorded on a cash basis.
  - A work program has been scheduled to sectorize accrued interest to improve monetary statistics quality.
- Grossing/netting:
  - Central bank accounts are compiled and disseminated on a gross basis and aggregated without consolidating interbank positions.
  - Commercial banks, savings and loans, and finance companies report data on a gross basis in monthly returns, but these are netted out and presented in consolidated form under other items (net) in their surveys.
  - Reciprocal asset/liability positions between CBH and commercial banks and claims among commercial banks are included indistinguishably in “interbank flows,” under other items (net).
  - Netting and consolidation adjustments are made when presenting the financial survey, consistent with MFSM recommendations.
  - The monetary statistics currently include contingent assets and liabilities; this practice is not consistent with the MFSM.

### 3. Accuracy and reliability

### 3.1 Source data
- Main source data for central bank sectoral balance sheet: CBH accounting statements (balance sheet) prepared by the Accounting Department; these statements are electronically available on a daily, weekly and monthly basis and are automatically linked to the MS for compiling monetary data.
- The sectoral central balance sheet does not cover the full range of financial instruments and economic sectors present in the underlying accounting statements; the monetary survey lacks necessary classification of all financial instruments and economic sectors as defined in the MFSM.
- Source data for the other depository corporations (ODC) sectoral balance sheet are individual monthly balance sheets submitted electronically to the NCBI (commercial banks, development bank, savings and loan institutions, finance companies).
- Accounting records of ODCs lack sufficient detail to enable classification of all financial instruments and economic sectors as recommended by the MFSM.
- The CBH continuously reviews incoming data to foster data consistency, particularly when new accounts are created.
- Meetings with financial market participants to identify developments relevant to monetary statistics are infrequent.
- Source data approximate required definitions, scope, classifications, valuation, and recording time, with deviations including:
  - lack of residency criterion for compiling foreign assets and liabilities;
  - inclusion of social security, local governments, and nonfinancial public corporations as autonomous agencies;
  - partial application of accrual accounting.
- To improve coverage, the MS obtains other data sources on loans to the public sector and details on holders of central bank bills; more detailed data are needed from commercial banks (e.g., separate identification of claims on and liabilities to nonfinancial public corporations).
- Data on deposits from decentralized and nonfinancial public corporations units are also received monthly in hard copies.
- Administrative records from securities exchanges are used for compiling monetary statistics.
- Transactions of the CBH and banks with counterparties that cannot be reasonably approximated or allocated to specific instruments or sectors are recorded in “other assets” and “other liabilities.”
- The MS recognizes the reporting framework does not fully conform to MFSM with respect to definitions, sectorization, and valuation; redesigning data requirements from commercial banks is integral to implementing the MFSM, but no specific work program and timetable are in place to meet this goal.
- Timeliness and deadlines:
  - Commercial banks, savings and loans, and finance companies must submit report forms electronically within 10 working days after the end of the reference month.
  - The information is checked and summarized by the National Commission of Banks and Insurance, and made available to the MS, which consolidates it with the balance sheet of the CBH to produce the monetary survey within 45 days after end of the month.
  - Final aggregated data are made available for publication on the CBH website within two months of the reference period.
  - Accounting records of the CBH are provided to the MS within one day after the end of the month for purposes of monetary data compilation.
- The CBH includes in the monetary statistics the accounting statements of banks in the process of liquidation.

*Source: _cr05230 - 1.2 Transparency*

### 3.2       Statistical       techniques

### 3.2       Statistical       techniques

### Data compilation and automation
- Depository corporations’ balance sheet data are reported on diskette and entered into an electronic database of the National Commission of Banks and Insurance (NCBI), from which the MS automatically downloads and links these balance sheets for the compilation of the monetary survey.
- A “report of methodology” is used to convert accounting statements into analytical data.
- Other depository corporations transmit data in an electronic format, which minimizes processing errors.
- The MS receives the CBH balance sheet statement by electronic means; the MS automatically links this balance sheet for the compilation of the central bank survey.
- Automated compilation from accounting statements to monetary data reduces processing time and errors (e.g., coding, editing, and tabulating errors).
- The MS is undertaking a project to automate a database on deposit and loan information for the autonomous institutions; sources will be administrative records from public sector institutions and commercial banks.

### Other statistical procedures and adjustments
- Adjustments to monetary statistics include the outstanding level of central banks bills with data from the exchange securities commission reports and securities holdings by private and institutional investors.

### Assessment and validation of source data
- Source data quality is monitored throughout the fully automated compilation process.
- Queries on CBH balance sheet data are resolved between the Accounting Department and MS.
- Source data from other depository corporations are checked by a consistency test performed by the NCBI; the MS reviews these data and discusses questionable items directly with the reporting bank.
- Commercial bank reporting arrangements are based on the chart of accounts for commercial banks approved by the NCBI in 1998; annexes and supplementary tables require banks to provide partial information on sectorization of the loan portfolio.
- The CBH monitors developments in financial markets that affect monetary accounts compilation.

### Assessment and validation of intermediate data and outputs
- Information on the stock of central bank bills in primary and secondary markets, and holdings of CAM and CADD provided by securities exchange houses, are contrasted with other depository corporations’ survey data; CBH maintains analytical records of CAM and CADD holders.
- Finance companies survey and savings institutions survey are verified as elements for compiling the financial survey.
- Information on deposits of autonomous institutions and non financial public enterprises sent directly to the CBH is not used fully to verify depository corporations’ liabilities to these public institutions.
- Monetary statistics are sometimes revised; revisions of commercial bank data are analyzed and clarifications requested when necessary.
- Discrepancies (e.g., level of CAM holdings vs issue of CAMs by the CBH) are investigated; no other secondary data sources are available for routine verification.
- Built-in checks in the CBH compilation process detect discrepancies, which are investigated and corrected through internal communication and contact with depository corporations.

### Revision studies and documentation
- No mechanism is in place to conduct routine revision studies.
- Deviations, omissions, and other potential sources of problems (e.g., erroneous sectorization of institutional units) are identified, investigated, corrected, and revisions published.
- There is no documentation explaining the methods of revising the data.
- Revisions to preliminary data are usually related to delayed receipt of ODC reports.
- The MS should document and publish the methods of revising the monetary data. (As noted in assessment comments.)

### Serviceability: timeliness, periodicity, and consistency (selected findings)
- Timeliness:
  - Monthly data on the central bank are disseminated within seven weeks after the end of the reference period on the Internet.
  - Monthly data on the other depository corporations are disseminated within one to two months of the end of the reference month.
  - The Semiannual Statistical Bulletin is published twice a year with two months delay after the reference period.
  - The Monetary Section follows an internal schedule to publish monetary statistics within six to eight weeks after the end of the reference month; there is no publicly announced advance release calendar.
  - Published figures remain preliminary when first published; after two months data are considered final. Preliminary data are identified with the letter (P) and final data with the letter (R).
- Periodicity:
  - Key monetary statistics (including money supply, interest rates, loans and discounts, and private sector liquidity) are published on a monthly basis on the CBH website as recommended by the GDDS.
- Consistency and time series:
  - The monetary statistics database is maintained in Excel spreadsheets. Series start in 1950 on an annual basis and in 1987 on a monthly basis.
  - Monthly time series are published on the Internet for the last eight years and for the most recent 12 months.
  - The Semiannual Statistical Bulletin includes data for the preceding three years and the last 24 months.
  - Coverage lacks methodological notes to identify and explain breaks and adjustments made to maintain consistency over time.
  - Statistics for the entire financial corporations sector and flow-of-funds accounts are not compiled in Honduras.
- Reconciliation with other frameworks:
  - MS provides transactions in net foreign assets to balance of payments compilers and changes in net credit to government to the CBH’s Public Finance Section.
  - Differences in central government institutional coverage and recording basis (accrual in monetary statistics vs cash in fiscal statistics) make reconciliation of net domestic borrowing difficult; such consistency checks are not conducted regularly.
  - MS reconciles depository corporations’ external debt data with the CBH’s External Debt Section.

### Accessibility, metadata, and user assistance (selected findings)
- Presentation:
  - Statistical tables on the CBH website and in the Semiannual Statistical Bulletin present information in a balance sheet format and include surveys of: (1) financial sector, (2) CBH, (3) savings and loan institutions, (4) commercial banks, (5) development banks, and (6) finance companies.
  - Datasets are published with detail on money supply, loans and discounts to the private sector, interest rates, and government and central bank securities rates; greater desegregation is desirable, particularly net credit to the rest of the public sector.
  - Charts and tables are disseminated with relevant analysis only in the annual report; no seasonally adjusted monetary data are published.
- Dissemination and access:
  - CBH disseminates monthly monetary statistics through its website, in Spanish.
  - The hard copy of the Semiannual Statistical Bulletin is distributed free of charge to 360 users.
  - Both recent and historical series can be consulted on the CBH website; data series cover four years of annual data and 24 months of monthly data, with longer series accessible through an electronic database or from the MS.
  - The Semiannual Statistical Bulletin and CBH website do not contain methodological notes, definitions, or documentation on revisions, breaks, discontinuities, or changes in methodology.
  - No brochures or comprehensive documentation for external users exist.
  - Nonpublished (but nonconfidential) data are available upon request from the MS with approval of senior staff of the ESD, but the public is not informed of such availability.
  - Contact information: the Bulletin and website do not provide unit/contact person responsible for monetary data consistently; some tables indicate ESD responsibility with a contact name and e-mail address.

### Key assessment findings and recommended plans for improvement (from Table 6 comments)
- Human resources:
  - There is a need to address weaknesses in retention of a well-trained staff.
- User feedback and quality awareness:
  - CBH does not follow a policy to obtain feedback from users; no formal mechanism exists to address and inform the public about data quality issues.
  - Recommendation: The CBH’s Monetary Section should conduct a users’ survey of monetary statistics in the short term.
- Transparency and methodology:
  - No specific terms and conditions under which monetary statistics are compiled; changes in methodology, source data and statistical techniques are not announced in advance.
  - Monetary statistics are not fully harmonized with the MFSM; CBH plans to implement the Manual.
  - Recommendation: Sectorization of commercial banks’ balance sheets is essential; repurchase agreements should not be classified as contingent assets and liabilities.
  - Securities are not valued at market prices, and accrued interest is not classified with the underlying financial instrument.
  - Recommendation: CBH should input realized unpaid losses in the profits and losses accounts rather than as Activos diferidos.
  - The MS should compile a complete sectorized central bank survey per MFSM, using the full range of financial instruments and economic sectors in the CBH’s accounting statements.
- Revisions and documentation:
  - Discrepancies are investigated and corrected, but no documentation explains revision methods.
  - Recommendation: MS should document and publish the methods of revising the monetary data.
- Timeliness target:
  - Recommendation in Table 6: The central bank survey should be published 10 days after the end of the reference month.
- Metadata and accessibility:
  - Metadata are not available; the Statistical Bulletin lacks methodological notes and breaks-in-series explanations.
  - Recommendation: Metadata will be developed in the context of Honduras’s participation in the GDDS; CBH should plan to include explanatory notes on methodology in its statistical publications.
- User assistance:
  - No contact person is identified; MS has not designated a contact person responsible for each set of statistics, and the CBH website does not list relevant publications.

*Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2005/_cr05230.pdf*

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_Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2005/_cr05230.pdf_