Tuesday Jul 28, 2026
Tuesday Jul 28, 2026
Tuesday, 28 July 2026 05:22 - - {{hitsCtrl.values.hits}}
Parliament’s Committee on Public Finance (CoPF) has raised concerns over whether the Finance Ministry’s Public Debt Management Office (PDMO) has the institutional capacity, governance framework, and specialist expertise required to manage Sri Lanka’s Rs. 31.1 trillion Government debt portfolio, while calling for a significant strengthening of the Office’s technical capabilities.
Reviewing the PDMO’s 2025 Annual Debt Management Report, CoPF members repeatedly questioned whether the Office, established under the Public Debt Management Act, No. 33 of 2024 and fully operational from December 2025, possesses the specialist skills needed to undertake sovereign debt management following the transfer of responsibilities from the Central Bank of Sri Lanka (CBSL).
Committee Chair MP Dr. Harsha de Silva opened proceedings by referring to the CoPF’s recently concluded investigation into the debt payment incident, telling officials the Committee had identified governance failures across multiple institutions and urging the office to strengthen its systems, governance structures, operational procedures, and technical controls.
He said Parliament had completed its work on the investigation and expected the Finance Ministry to report back on improvements to debt management processes.
During the review, MPs questioned the Office’s staffing structure, training programs, and operational readiness, arguing that debt management requires expertise comparable to that of professional treasury operations in international financial markets.
Committee members said even a 10-basis-point error in borrowing decisions could have significant financial implications for the Government while exposing officials to allegations over borrowing decisions, underscoring the need for specialised skills and stronger institutional safeguards.
The PDMO said it had undertaken training with International Monetary Fund (IMF) technical assistance and had identified capacity-building requirements, but acknowledged it did not possess a comprehensive Training Needs Assessment document.
The Committee said such an assessment was essential to guide recruitment, professional development, and future resource allocation, requesting the Office to submit the document within two weeks. The CoPF also indicated it would support increased Budgetary allocations for specialised training after reviewing the assessment.
Officials told the Committee the Office has an approved cadre of 80 staff, with around 60 positions currently filled, while one Assistant Director-General position remains vacant pending disciplinary proceedings involving the previous office holder. They said most executive-level positions had been filled, although additional recruitment remained necessary.
The Committee also questioned whether the Finance Ministry’s allocation of Rs. 2 million for training was sufficient for an institution responsible for managing billions of dollars in Government borrowing, with members arguing that investment in specialist training would yield significant savings by improving borrowing decisions. Officials said much of the training currently depended on grant assistance from international development partners.
The review also highlighted broader policy challenges facing the debt office.
PDMO officials said their medium-term strategy is to gradually reduce reliance on Treasury Bills, increase issuance of longer-term Treasury Bonds, and reduce external borrowing. However, Committee members questioned whether those objectives could be achieved while domestic interest rates remain elevated.
Officials acknowledged that successful implementation of the strategy would require closer coordination between fiscal and monetary authorities, although MPs argued the CBSL’s inflation-targeting mandate means the debt office cannot rely on monetary policy to reduce borrowing costs.
The Committee urged the PDMO to strengthen its own market expertise and institutional capacity to operate effectively under changing market conditions rather than depend on lower interest rates.
