National Debt

System
What is transforming a society?

The national debt system is the set of bodies, rules and procedures aimed at
achieving efficient administration of debt for terms greater than one year of
public sector entities and organizations.

It is made up of the National Directorate of Public Debt dependent on the Vice

Minister of Finance and the Executing Units, which conduct the processes
related to the system at the level of all Public Sector entities that manage funds
of public entities and organizations.

The same ones that are responsible for ensuring compliance with the rules and
procedures issued by the governing body.

Main Powers of the SNE

- It is the governing body of the System

- Regulates the public debt process
- Program, evaluate and negotiate debt operations
- Issues securities representing public debt
- Records public sector debt
- Program and attend to public debt service
- Acts in trusts associated with debt operations
- Sole financial agent of the State

Public Debt Operation

It is all financing subject to reimbursement, with or without guarantee from the

National Government, that the GR and GL agree with natural persons or legal
entities, domiciled or not in the country, whose repayment period is greater than
one year.
Modalities …

- Loans
- Issuance and placement of Bonds
- Acquisition of Goods and Services in installments
- Endorsements
- Credit Line Assignments
- Financial Leasing
- Securitization of assets or resource flows

Debt Management Operation

It is that operation whose purpose is to renegotiate the conditions of the public

debt.

Main concepts and processes

- External debt operations, contracted with natural or legal persons not

domiciled in the country.
- Internal debt operations, contracted with natural or legal persons
domiciled in the country.

Classification by type of debt

Regulations related to the National Debt System

• Constitución Política del Estado (artículo 78º)

Expenses of a permanent nature cannot be covered with loans.

• Decentralization Bases Law. Law No. 27783 (article 5)

Regional and Local Governments can only contract external public debt
with the endorsement or guarantee of the State.

• Fiscal Decentralization Law D. Leg. No. 955

External and internal debt is allocated exclusively for investment projects.

Art. 25º.

Process Stages

Use of Determined Resources in Debt Operations

Focam, Foncor, canon, overcanon and customs income: The GR and GL can
use these resources to service the debt of debt operations that they agree with
or without the guarantee of the GN. (Art. 7th Law 29290).
These resources can also be used to meet the commitments derived from the
Resource Transfer Agreements.

Likewise, they can finance the administrative expenses of trusts (guarantee

type) established to make payments related to debt operations.

COMMENT …

The National Debt System is the set of bodies and institutions, rules and
processes aimed at achieving efficient arranging of obligations for terms greater
than one year, and prudent administration of the debt of the Non-Financial
Public Sector.