Pacific

Sum of Measures 1—5 (Total Package)

Total Package in USD Million: 26.12
% of GDP (2019): 5.37%
% of Regional Total Package: 1.02%
Package Per Capita in USD: 253.11
Note: Measures 9 and 10 are added to the sum of Measures 1-5.
Measure Amount (Local) Amount (USD) Details Update Source
01 - Liquidity Support info_outline
01A - Short-term lending info_outline
01B - Support policies for short-term lending info_outline
01C - Forex operations info_outline

No amount/estimate: (i) March 19, The National Reserve Bank of Tonga (NRBT) Board committed to easing exchange control requirements if needed. The exchange rate remains pegged against a basket of currencies (within a ±5% monthly adjustment limit). No new exchange restrictions have been announced. International reserves were at 7.4 months of imports at end-May 2020; (ii) As of end-June 2020, international reserves increased to 8.2 months worth of imports (around TOP543.8 million); (iii) Further, as of end-August 2020, international reserves increased to 8.5 months worth of imports (around TOP555.9 million).

02 - Credit creation info_outline
02A - Financial sector lending/funding info_outline
02B - Support policies for long-term lending info_outline

No amount/estimate: Monetary policy, which has been accommodative given low inflation and slow economic recovery, remained on hold.

02C - Loan guarantees
03 - Direct long-term lending info_outline
03A - Long-term lending info_outline
03B - Forbearance

No amount/estimate: (i) The Government of Tonga announced a 3-month moratorium on Government Development Loans and TC Gita Recovery Loan Fund; (ii) Commercial banks are assisting their customers affected by the COVID-19 virus on a case by case basis and depending on individual customers’ circumstances by (a) reducing or suspending the principal loan repayments to interest only loan repayments; (b) restructuring loans to businesses that have reduced business hours, in affected sectors such as tourism and related industries like transportation and to individuals who have been laid off; (c) extending the terms of loans to reduce repayments; (d) reducing loan interest rates on a case by case basis; and (e) providing access to short-term funding, if required.

04 - Equity support info_outline
05 - Government support to income/revenue TOP60,000,000 USD26,119,636
05A - Health TOP20,000,000 USD8,706,545

April 2, Based on an initial assessment of the overall impact of COVID-19 on the economy, the Government of Tonga announced an Economic and Social Stimulus Package of TOP60 million (5.3% of GDP) for FY 2020. This package is intended to provide short-term assistance to all affected sectors in response to the COVID-19 pandemic. Over a third of the funds will be directed to the health sector, while the rest will support the other sectors, including tourism, transport, agriculture, education and security.

05B - Non-health TOP40,000,000 USD17,413,091

(i) This covers two-thirds of the TOP60 million Stimulus Package for other sectors in Measure 5 under Health; (ii) No amount/estimate: The Government of Tonga announced a deferral of retirement contributions and hardship allowances for laid-off employees (up to 3 months), needs-based financial assistance, tax and duty relief during the pandemic, and assistance with the payment of utility bills by public enterprises.

06 - Budget reallocation info_outline
07 - Central bank financing government
07A - Direct lending & reserve drawdown
07B - Secondary purchase: government securities
08 - International Assistance Received TOP86,208,474 USD37,528,900
08A - Swaps info_outline
08B - International loans/grants TOP86,208,474 USD37,528,900
08B1 - Asian Development Bank TOP45,276,281 USD19,710,000

(i) April 6, USD0.47 million - Grant 0693-TON: COVID-19 Emergency Response (Additional Financing); (ii) April 15, USD0.08 million announced by the ADB as part of the Strengthening Social Protection in the Pacific program. On July 24, additional USD0.15 million co-financing under the same program; (iii) April 15, ADB today announced the release of a USD6 million (TOP13.9 million) grant from its Pacific Disaster Resilience Program (Phase 2) to help finance the Government of Tonga’s response to the novel coronavirus disease (COVID-19) pandemic; (iv) April 24, USD0.13 million allocated by the ADB as additional funding to Tonga under the Regional Project on Developing the Pacific Health Sector; (v) USD0.46 million allocation for TA9950-REG: Regional Support to Address the Outbreak of Coronavirus Disease 2019 and Potential Outbreaks of Other Communicable Diseases; (vi) June 5, USD0.14 million in financing under the Pacific Economic Management, Phase 3 project; (vii) June 25, USD12.2 million in ADF grant under the Strengthening Macroeconomic Resilience Program, with another USD6.92 million co-financed by Australia and New Zealand; (viii) August 10, USD0.17 million under the regional project, Knowledge and Support Technical Assistance for Strengthening Water, Sanitation, and Hygiene Practices and Hygiene Behavioral Change in the Pacific; (ix) August 12, USD0.06 million under the regional project, Support for Gender Sensitive Responses to COVID-19 in the Pacific Developing Member Countries.

08B2 - Other TOP40,932,193 USD17,818,900

(i) May 12, USD8.4 million funding from the World Bank to strengthen resilience and fight against the COVID-19 Pandemic; (ii) May 20, AUD10.5 million in quick financial support from Australia to support Pacific countries hit by both the recent cyclone and pandemic; (iii) June 5, USD2.89 million equivalent grant to Tonga to to improve the climate resilience of the transport sector, and in the event of an Eligible Crisis or Emergency, to provide an immediate response to the Eligible Crisis or Emergency. The financing provided under this project will support urgent needs created by the COVID-19 crisis.

09 - International Assistance Provided
09A - Swaps info_outline
09B - International loans/grants
10 - No breakdown
11 - Other Economic Measures

Commercial banks are assisting their customers affected by the COVID-19 virus on a case by case basis and depending on individual customers’ circumstances by: (i) reducing or suspending the principal loan repayments to interest only loan repayments; (ii) restructuring loans to businesses that have reduced business hours, in affected sectors such as tourism and related industries like transportation and to individuals who have been laid off; (iii) extending the terms of loans to reduce repayments; (iv) reducing loan interest rates on a case by case basis; and (v) providing access to short-term funding, if required.

12 - Non-Economic Measures

(i) The Government of Tonga has been introducing increasingly restrictive containment measures since January 2020; (ii) In March, it toughened measures for incoming travelers, while all international cruise ships and yachts were barred indefinitely; (iii) On March 21, Tonga declared a state of National Emergency. As a preventive measure, a nation-wide lockdown came into effect on March 29, which entails the prohibition of all flights into the country and all public transportation inside the country, the closure of all nonessential businesses and public facilities, a stay-at-home order, a night-time curfew and the prohibition of public gatherings; (iv) The authorities started easing restrictions on April 12, 2020, by lifting the national lockdown, and domestic restrictions were further eased on June 11, for example by further reducing curfew hours and relaxing restrictionsremoving the prohibition on the size of permissible gatheringscontact sports. The state of National Emergency and the border closure, however, have been extended until August 4 and September 12, respectively.