beb q3 2008
TRANSCRIPT
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Brunei Darussalams GDPcontracted by 2.2 percent, year-on-year, in Q3 2008. This brought the
cumulative 9 months growth to 3.3 percent, compared to the same period last year. The oil and gas sector
contracted sharply, by 7 percent, in Q3 2008.
In the monetary sector,bothbroad money supply (M2) and narrow money supply (M1) grew by more
than 20 percent in Q3 2008. However, total loans disbursement to business sector increased only by 8.7
percent. Loans to deposit ratio (LDR) edged down to 41.1 percent in September 2008, from 50.1 percent in
September 2007.
Fiscal surplusin Q3 2008 was recorded at BND 2.8 billion. Revenue went up sharply by 71.1 percent on
the back of high oil prices, while expenditure was down by 25.1 percent.
Inflation in Q3 2008 was recorded at 3.1 percent, year-on-year. On a year-to-date basis (January-
September 2008) inflation was recorded at 2.2 percent. Inflation in the food and non-alcoholic beverages
items was the primary reason behind such a pressure.
External Trade statistics showed that the cumulative 9 months surplus in 2008 had reached almost
BND8 billion, driven by high oil prices (hence, oil revenues). In Q3 2008, Japan and Indonesia remained the
dominant export market, accounting for almost 64 percent of the total export.
OutlookData seems to indicate that the full 2008 picture will be mixed. Growth is expected to have gone
down sharply. Full year inflation for 2008 is expected to have been higher than the target rate of between 1-2
percent. Meanwhile, Brunei Darussalam is expected to have recorded surpluses in both the trade and fiscal
accounts.
Highlights in this issue
Brunei Economic Bulletin Editorial TeamEditors Director General, JPKE
Economic Expert, JPKE
Directors, JPKE
Assistant Directors, JPKE
ContentLayout and Design Md Azry Hj Tahir
Hj Mohammad Haimi
Yarmin@Yamin
BRUNEI ECONOMIC BULLETIN
September 2009olume 6 - Issue 3
Contents:
Real Sector and
Output
2
Monetary 8
Consumer Price
Index
18
External Trade 21
Oil and Gas 26
Outlook 29
Special Article I 30
Special Article II 39
Public Finance 12
Contributors Dr Adrian Panggabean
Asnawi Faisal Hj Kamis
Pg Metussin Pg Hj Tuah
Dk Norhanidah Pg Hj Masshor
Ruzanna Hj A Buntar
Norhasnizan Hj Abd Razak
Mohammad Noorul Aiman Hj Jaman
Rokiah Kesut
Ministry of CommunicationDEPARTMENTOF ECONOMIC
PLANNINGAND DEVELOPMENT
PRIME MINISTER'S OFFICE
BRUNEI DARUSSALAM Q3 2008 ECONOMIC REVIEW
OUTLOOK AND RECENT ECONOMIC DEVELOPMENTS
Agriculture Department, Ministry of
Industry and Primary Resources
Hjh Mariah Hj Yahya
Awang Gemok Hj Ghani
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Overall PerformanceThe economy of Brunei Darussalam contracted by 2.2 percent year-on-year (year-
on-year) in Q3 2008, after a 2.8 percent year-on-year contraction in Q2 2008
(Table 1.1). The countrys Q3 2008 constant price GDP dropped from
BND2,985.2 million in Q3 2007 to BND2,918.4 million in Q3 2008. Meanwhile,
GDP at current prices increased to BND5,720.2 million from BND4,527.5 million
in Q3 2007 and BND5,131.5 million in Q2 2008. GDP growth, on a quarter-on-
quarter (q-o-q) basis (non-seasonally adjusted) improved with a 5.2 percent growth
compared to a 3.9 percent contraction in Q2 2008. This brought the cumulative 9-
months year-on-year growth to -3.3 percent in 2008, compared to -0.4 during the
same period in 2007.
GDP by expenditureThe growth drivers in Q3 2008 were gross fixed capital formation, government
consumption expenditure and personal consumption expenditure (Table 1.2 and
Table 1.6).
Gross fixed capital formation expanded by 11.7 percent in Q3 2008, lower than the
12.1 percent in Q2 2008. This was largely due to a moderation of investment in the
construction sector from 7.3 percent in Q2 2008 to 3.2 percent in Q3 2008. On the
other hand, investment in machinery and equipment grew from 18.6 percent in Q2
2008 to 21.8 percent in Q3 2008.
Government consumption expenditure grew by 6.2 percent year-on-year, up from
0.4 percent in Q2 2008. This was on the back of a 6.1 percent increase in the total
government spending in wages and Other Charges Annually Recurrent, from
BND723.7 million in Q3 2007 to BND767.2 million in Q3 2008.
Meanwhile, personal consumption expenditure expanded by 5.5 percent year-on-
year, also an improvement from the Q2 2008 growth of 0.4 percent.
These expansions were offset by the fall in the export of goods and services and the
expansion in import of goods and services.
Export of goods and services declined further by 8.7 percent, following a 9.7
1.Real Sector and Output
Page 2
Brunei Darussalams economyshrank by 2.2% year-on-year inQ3 2008
Brunei Economic Bulletin
Table 1.1: GDP Q3 2008 vs. GDP Q3 2007 and GDP Q2 2008
Q3 2007 Q2 2008 Q3 2008
Growth in Q3 2008(%)
year-on-year
quarter-on-
quarter
GDP at Current Prices(BNDMillion)
4,527.5 5,131.5 5,720.2 26.3 11.5
GDP at 2000 Constant Prices(BNDMillion)
2,985.2 2,774.2 2,918.4 -2.2 5.2
Source: Department of Economic Planning and Development, Prime Minister's Office
The main growth drivers wereinvestment, government
consumption and personalconsumption.
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percent drop in Q2 2008. This was driven by a further contraction in the export of
goods by 9.6 percent, after a 12.6 percent drop in the last quarter. Export of
services also contracted by 2.5 percent in Q3 2008, down from a 12.1 percent
expansion in Q2 2008. Contributing to the decline in the export of goods was thedrop in the crude oil export by 19.4 percent from 164,077 barrels per day in Q2
2008 to 132,203 barrels per day in Q3 2008. Further, production of garments also
fell by 4.1 percent from 523,990 dozen in Q3 2007 to 502,565 dozen in Q3 2008.
However, export of LNG grew by 4.8 percent from 1,012,803 MMBtu per day to
1,060,973 MMBtu per day, during the same period.
Import of goods and services improved by 56.5 percent in Q3 2008, up from 4.2
percent in Q2 2008. This was mainly attributed to a double-digit growth of imports
of goods (79.9 percent year-on-year in Q3 2008 from 5.0 percent year-on-year in
Q2 2008). On the other hand, import of services declined by 0.6 percent year-on-
year in Q3 2008, from 2.6 percent growth in Q2 2008. The sharp increase in the
import of goods was mainly attributed to a jump in the level of import of high-
speed diesel fuels from BND21.7 million in Q3 2007 to BND608.3 million in Q3
2008.
GDP by production
The oil and gas sector shrank by 7.0 percent year-on-year in Q3 2008 (Table 1.3).
This was due to the fall in both the Oil and Gas Mining and Manufacture of
Liquefied Natural Gas (LNG) sub-sectors by 9.0 and 0.7 percent year-on-year,
respectively. The oil and gas sector made up 72.8 percent of Brunei Darussalams
nominal GDP in Q3 2008.
Page 3
Volume 6 - Issue 3
However, these were offset by thecontraction in export and increase
in import
Table 1.2 : GDP by expenditure (Q3 2008)
GDP atCurrentPrices
(BNDMillion)
GDP at 2000Constant
Prices(BNDMillion)
RealGrowthRates
(% y-o-y)
TOTAL GDP 5,720.2 2,918.4 -2.2
Personal consumption expenditure 1,044.2 1,052.1 5.5
Government consumption expenditure 960.6 941.3 6.2
Capital formation 846.5 737.4 11.7
Gross fixed capital formation 847.3 738.3 11.7
Construction 425.4 370.1 3.2
Machinery and equipment 421.9 368.2 21.8
Change in stocks -0.8 -0.9
Net exports of goods and services 2,130.2 -669.7
Exports of goods and services 4,392.7 1,570.0 -8.7
Exports of goods 4,094.2 1,357.5 -9.6
Exports of services 298.5 212.5 -2.5
less: Imports of goods and services 2,262.5 2,239.7 56.5
Imports of goods 1,766.0 1,826.3 79.9
Imports of services 496.5 413.5 -0.6
Statistical discrepancy 738.8 857.4
Source: Department of Economic Planning and Development, Prime Minister's Office
In terms of production, the oil andgas sector fell by 7.0 % year-on-
year
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The production of crude oil fell by 11.7 percent year-on-year, from 190,570 barrels
per day (bpd) in Q3 2007 to 168,213 bpd in Q3 2008 (Table 1.4). This was due to
the less than satisfactory production level of the oil wells. Similarly, the production
of natural gas fell by 3.0 percent year-on-year, from 1,241 MMscf per day in Q3
2007 to 1,204 MMscf per day in Q3 2008. The production of LNG dropped by 1.1
percent year-on-year, from 1,045,870 MMbtu per day in Q3 2007 to 1,033,951
MMbtu per day in Q3 2008.
The non-oil and gas sector improved by 2.6 percent year-on-year in Q3 2008
compared to a 0.7 growth recorded in Q2 2008. The government services recorded
an increase of 0.5 percent year-on-year in Q3 2008, slower than 0.8 percent year-
Brunei Economic Bulletin
Page 4
GDP atCurrent Prices(BNDMillion)
GDP at 2000Constant Prices
(BNDMillion)
Real GrowthRates
(% y-o-y )
Oil & Gas Sector 4,161.9 1,404.0 -7.0
Oil and Gas Mining 3,561.7 1,035.8 -9.0
Manufacture of Liquefied Natural Gas (LNG) 600.2 368.3 -0.7
Non-Oil & Gas Sector 1,558.3 1,514.4 2.6
Government Services 566.1 543.6 0.5
Private 992.2 970.8 3.8
Vegetables, Fruits & Other Agriculture 7.7 9.5 18.6
Livestock and Poultry 12.3 14.4 11.6
Forestry 1.9 1.9 78.2
Fishery 10.9 9.0 -17.5
Manufacture of Wearing Apparel & Textile 21.3 29.7 -4.2
Other Manufacturing 16.5 16.8 6.8
Electricity and Water 30.0 22.6 0.6
Construction 176.1 163.4 2.8
Wholesale and Retail Trade 141.6 145.6 -2.5
Water Transport 38.4 47.0 24.7
Air Transport 38.6 27.2 8.1
Other Transport Services 14.8 19.8 12.7
Communication 73.9 76.0 2.1
Finance 129.9 117.9 0.5
Real Estate & Ownership of Dwellings 108.7 107.4 3.1
Hotels & Restaurants 12.5 11.1 1.9
Private Health and Education Services 22.1 21.2 -1.1
Business Services 106.4 99.1 11.1
Domestic Services 13.0 12.3 1.4
Other Private Services 15.6 18.8 25.6
Gross Domestic Product 5,720.2 2,918.4 -2.2
Indicators for the oil and gassectors all showed negative growthrates
Table 1.4 : Oil & Gas Sector (Q3 2008)
Growth rates(% y-o-y)
Oil & Gas Mining Value Added (VA) -9.0
LNG Manufacturing VA -0.7
Oil & Gas (VA) -7.0
Crude oil production -11.7
Natural gas production -3.0
LNG production -1.1
Source: Department of Economic Planning and Development, Prime Minister's Office
By contrast, the non-oil and gas
sector grew by 2.6 % year-on-year, with both the governmentservices and private sectorregistering positive growth
Table 1.3 : GDP by production (Q3 2008)
Source: Department of Economic Planning and Development, Prime Minister's Office
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on-year growth in the previous quarter. Meanwhile, the private services registered
an expansion of 3.8 percent year-on-year, an improvement from the growth of 0.7
percent year-on-year in Q2 2008.
The Vegetables, Fruits & Other Agriculture sub-sector recorded a growth of 18.6
percent year-on-year in Q3 2008 after growing by 26.7 percent year-on-year in Q2
2008. The growth was due to the increase in the production of vegetables and cut
flowers.
The Livestock and Poultry sub-sector continued to grow by recording an 11.6
percent year-on-year increase in Q3 2008, after registering a growth of 5.1 percent
year-on-year in the previous quarter. The increase production of broiler chicken
was one of the factors in that growth.
The Forestry sub-sector maintained its double-digit growth in Q3 2008 at 78.2
percent year-on-year, up from 51.1 percent year-on-year in Q2 2008. This was
mainly driven by the expansion in forestry output such as Bakau poles.
The Fishery sub-sector fell further by 17.5 percent year-on-year, following a year-
on-year contraction of 17.1 percent in the Q2 2008. It was the aquaculture industry,
specifically prawns, which contributed to the decline.
The non-oil and gas manufacturing sub-sector are the combination of the
Manufacture of Wearing Apparel & Textile and Other Manufacturing sub-sectors.
In Q3 2008, the Manufacture of Wearing Apparel & Textile sub-sector contracted
by 4.2 percent year-on-year on the back of lower garment production from 523,990
dozens in Q3 2007 to 502,656 dozens in Q3 2008. This was comparatively better
than the fall of 38.0 percent year-on-year recorded in Q2 2008. For the Other
Manufacturing sub-sector, the Q3 2008 positive year-on-year growth of 6.8 percent
was an improvement from Q2 2008 performance of 6.0 percent year-on-year
contraction. One factor that contributed to the growth was the increase in the
production of sawn timbers.
The Electricity and Water sub-sector went up by 0.6 percent year-on-year in Q3
2008 after growing by 0.2 percent year-on-year in Q2 2008. The production ofelectricity grew by 1.0 percent year-on-year in Q3 2008. This was offset by a 0.2
percent drop in water consumption.
The Construction sub-sector rose by 2.8 percent year-on-year in Q3 2008 after
falling by 1.0 percent year-on-year in Q2 2008. Imports of construction materials
such as sand, cement and stone & gravel went up in Q3 2008 year-on-year.
By contrast, the Wholesale and Retail sub-sector went down by 2.5 percent year-
on-year after a growth of 3.2 percent year-on-year in Q2 2008. The drop coincided
with a 9.4 percent year-on-year fall in personal loans from BND2,766.0 million in
Q3 2007 to BND2,506.0 million in Q3 2008.
Volume 6 - Issue 3
Page 5
The main contributors to realGDP growth were the
Construction (0.1 pp),
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The Water Transport sub-sectors performance improved further with a growth of
24.7 percent year-on-year, after growing by 12.1 percent year-on-year in Q2 2008.
The Air Transport sub-sector registered a growth of 8.1 percent year-on-year in Q3
2008. This was partly driven by the increase in the number of air passengers. Thepositive growth was an improvement after recording a contraction of 11.5 percent
year-on-year in the previous quarter. Other Transport Services sub-sector grew by
12.7 percent year-on-year compared to a growth of 38.2 percent recorded in Q2
2008. Similarly, the Communication sub-sector also registered a positive year-on-
year growth of 2.1 percent in Q3 2008. In Q2 2008, the sub-sector expanded by 6.2
percent year-on-year. Two indicators of the growth were the increase in the volume
of postal articles handled as well as the increase in the number of Brunet and e-
Speed subscribers.
The Finance sub-sectors experienced a growth of 0.5 percent year-on-year,
following an expansion of 12.3 percent year-on-year in Q2 2008. Income from bank
charges went up by 4.7 percent year-on-year, from BND15.7 million in Q3 2007 to
BND16.4 million in Q3 2008. Bank loans and advances grew by 2.0 percent year-
on-year.
The Real Estate and Ownership of Dwellings sub-sector recorded growth of 3.1
percent year-on-year in Q3 2008 after growing by 1.1 percent in the previous
period. Total mortgages rose by 18.2 percent year-on-year from BND958.0 million
in Q2 2008 to BND1,132.0 million Q3 2008.
The Hotel and Restaurant sub-sector grew by 1.9 percent year-on-year in Q3 2008
after registering a contraction of 5.1 percent year-on-year in the previous quarter.
This was in part due to the increase in the occupancy rates of major hotels from
about 37 percent in Q3 2007 to about 41 percent in Q3 2008. Further, the number of
air passengers grew 18.8 percent year-on-year in Q3 2008.
Private Health & Education Services contracted by 1.1 percent year-on-year in Q3
2008, an improvement from the previous quarters contraction of 4.1 percent.
Business Services sub-sector recorded growth of 11.1 percent year-on-year after
falling by 4.8 percent year-on-year in Q2 2008. Both the Domestic Services and
Other Private Services sub-sectors grew by 1.4 and 25.6 percent year-on-year,respectively.
Contribution to growth in real GDP
The oil and gas sector continued to pull down the overall real GDP growth by 3.5
percentage points (pp) in Q3 2008 (Table 1.5). This was mainly due to the poor
performance of the Oil and Gas Mining sub-sector, which reduced GDP growth by
3.4 pp. The Manufacture of LNG sub-sector cut down growth by 0.1 pp. In the
previous period, the sub-sector contributed positively by 0.7 pp.
The non-oil and gas sector prevented GDP growth from sliding down further by
contributing 1.3 pp to the overall GDP growth. This was an improvement of 0.4 pp
Brunei Economic Bulletin
Page 6
and Business Services sub-sectors (0.3 pp)
Water Transport (0.3 pp)
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contribution growth in Q2 2008. Business Services sub-sector contributed 0.3 pp to
the overall growth compared to a negative 0.4 pp in the Q2 2008. Water Transport
sub-sectors pushed up growth by 0.3 pp, also an improvement from the previous
quarter of 0.1 pp growth contribution. Another sub-sector which performedrelatively well was construction, which contributed 0.1 pp to growth. In Q2 2008,
the contribution to growth was negligible.
Contribution to growth in total demand
In Q3 2008, total domestic demand continued to be the main contributor to growth
in total demand with 4.4 pp contribution (Table 1.6). Meanwhile, external demand
(export of goods and services) continued to offset the growth in total domestic
demand (shaved off 3.5 pp from growth) in Q3 2008.
Consumption expenditure was the main driver of growth within domestic demand
in Q3 2008, contributing 2.6 pp. Meanwhile, gross fixed capital formation
contributed 1.8 pp. Within consumption expenditure, both personal consumption
expenditure and government consumption expenditure contributed 1.3 pp each to
overall demand growth in Q3 2008.
Meanwhile, investment in machinery and equipments continued to be the main
contributor to growth within gross fixed capital formation, while, investment in
construction contributed 0.3 pp.
Volume 6 - Issue 3
Page 7
Q2 2008 Q3 2008
percentage points
TOTAL DEMAND -2.6 0.9
Total domestic demand 1.5 4.4
Final domestic demand 1.5 4.4
Consumption expenditure 0.2 2.6
Personal consumption expenditure 0.1 1.3
Government consumption expenditure 0.1 1.3
Gross fixed capital formation 1.3 1.8
Construction 0.5 0.3
Machinery and equipments 0.9 1.5
Changes in stocks -0.0 -0.0
External demand -4.1 -3.5
Source: Department of Economic Planning and Development, Prime Minister's Office.
Table 1.6: Percentage contribution to total demand growth at 2000 constant prices
Growth contribution(percentage points)
Q2 2008 Q3 2008
TOTAL GDP -2.8 -2.2
Oil & Gas Sector -3.2 -3.5
Oil and Gas Mining -3.8 -3.4
Manufacture of Liquefied Natural Gas (LNG) 0.7 -0.1
Non-Oil & Gas Sector 0.4 1.3
Business Services -0.4 0.3
Water Transport 0.1 0.3
Construction 0.0 0.1
Table 1.5: Contribution to GDP growth at 2000 constant prices of selected sectors (by Production)
Source: Department of Economic Planning and Development, Prime Minister's Office.
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Money supplyMoney supply in Q3 2008 expanded at a faster rate compared to Q2 2008 (Annex
1). Broad money (M2) increased by 23.2 percent year-on-year, compared to 11.6
percent year-on-year in Q2 2008. This translated to an increase in the stock of M2
from BND12,936.6 million at end of September 2007 to BND15,937.6 million at
end of September 2008. The expansion was attributed to an increase in fixed
deposit which rose by 31.3 percent year-on-year, from BND7,393.4 million to
BND9,703.5 million. Savings and others also rose by 3.9 percent year-on-year,
from BND2,603.9 million to BND2,706.6 million.
Narrow money (M1), an indicator of transaction balances, was up by 20.0 percent
year-on-year, from BND2,939.4 million to BND3,527.0 million due to
accumulation of demand deposits (Chart 2.1 and Annex 2.1). M1 growth of 20.0
percent in Q3 2008 represented a sharp increase compared to the Q2 2008 growth
of 7.9 percent year-on-year.
Assets and liabilities
Overall, the banking systems total assets recorded an increase of 20.4 percent from
BND15,480 million (end-September 2007) to BND18,632 million (Annex 2.2).
This was attributed to several factors. First, investment abroad through the banking
system rose by 41.0 percent from BND6,681.0 million to BND9,417.0 million.
Second, loans and advances increased by 2.0 percent from BND6,081.0 million to
BND6,200.0 million. Third, other investments was up by 12.9 percent from
BND1,251.0 million to BND1,412.0 million.
Meanwhile, investment in Brunei Darussalam rose of around BND32.0 million invalue from BND278.0 million to BND310.0 million and other assets also increased
from BND1,030.0 million to BND1,146.0 million during the same period.
2.Monetary Development
Brunei Economic Bulletin
Page 8
Broad money (M2) increased by23.2% andnarrow money (M1) upby 20.0%
Chart 2.1: Money Supply
Source: Ministry of Finance
Banking assets rose by 20.4%.
Deposits registered growth of24.3%
0.00
2000.00
4000.00
6000.00
8000.00
10000.00
12000.00
14000.00
16000.00
18000.00
Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
BNDmillion
M2 M1 Fixed deposit saving
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On the liabilities side, the total deposits registered an increase of 24.3 percent from
BND12,141.0 million at end of September 2007 to BND15,093.0 million at end of
September 2008. While time deposits rose by 31.3 percent from BND7,393.0
million to BND9,704.0 million, demand deposits grew by 25.1 percent fromBND2,144.0 million to BND2,682.0 million.
Savings growth was slower in Q3 2008 compared to Q2 2008. Savings rose by 4.8
percent, year-on-year this quarter compared to 4.0 percent year-on-year in Q2
2008. Other liabilities increased by 11.9 percent from BND2,472.0 million to
BND2,765.0 million. On the other hand, liabilities due to bank in Brunei
Darussalam decreased by end of September 2007 from BND303.0 million to
BND241.0 million by end of September 2008. Meanwhile, liabilities outside
Brunei Darussalam declined from BND563.0 million to BND532.0 million during
the same period.
Loans and advances
Gross private sector financing through the banking system grew by 2.0 percent to
BND6,201.0 million by end of September 2008 from BND6,081.0 million by end
of September 2007 (Annex 2.3). Total loan disbursement to business sectors
increased by 8.7 percent from BND2,357.0 million to BND2,563.0 million. Loans
to consumers were down by 2.3 percent from BND3,724.0 million to BND3,638.0
million during the same period. By end of September 2008, contributions of loans
to businesses and consumers to the total loans and advances were 41.3 and 58.7
percent compared to 38.8 percent and 61.2 percent by end of September 2007,
respectively.
The increase of total loans and advances were contributed by the increase in loans
and advances to economic sectors such as transportation (rose by 6.4 percent from
BND950.0 million by end of September 2007 to BND1,011.0 million); general
commerce sector (by 9.5 percent from BND547.0 million to BND599.0 million);
construction (by 5.7 percent from BND494.0 million to BND522.0 million);
professional services (by 25.4 percent from BND71.0 million to BND89.0 million);
agriculture sector (by 12.9 percent from BND31.0 million to BND35.0 million);
manufacturing sector (by 21.3 percent from BND230.0 million to BND279.0
million) and mortgage (by 18.2 percent from BND958.0 million to BND1,132.0million) during the same period.
Loans and advances to other sectors registered a downtrend. Loans and advances to
the credit and finance sector decreased by 17.6 percent from BND34.0 million to
BND28.0 million. Personal loans decreased by 9.4 percent from BND2,766.0
million to BND2,506.0 million. The ratio of total loans and advances to total
deposits (Loan-to-deposit ratio) by end of September 2008 declined to 41.1 percent
compared to 50.1 percent by end of September 2007. In other words, the banking
sector in Brunei Darussalam was flushed with funds.
Volume 6 - Issue 3
Page 9
Gross private sector financingthrough the backing system grew
by 2%. Loans to deposit ratio(LDR) was down to 41.1% in
September 2008 from 50.1% inSeptember 2007.
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Non-performing loans (NPLs)Total NPLs in the banking system rose by 5.8 percent from BND611.2 million by
end of September 2007 to BND646.6 million by end of September 2008 (Annex
2.4). NPL based on 60-90 days classification registered an increase of 105.8 percent
from BND33.9 million in September 2007 to BND69.7 million in September 2008
(Chart 2.3). The 91-120 days NPLs classification rose by 114.1 percent from
BND16.9 million to BND36.2 million. Meanwhile the above 120 days classification
declined by 3.5 percent, from BND560.4 million to BND540.7 million in the same
period.
Ratio of the total NPL to total loans outstanding in September 2008 was 10.4
percent compared to 10.1 percent in September 2007 (Chart 2.4). The 60-90 days
NPLs classification in September 2008 recorded a ratio of 1.1 percent compared to
0.6 percent in September 2007. The 91-120 days classification registered a ratio of
0.6 percent compared to 0.3 percent in the same period. Meanwhile, the ratio of the
above 120 days classification in September 2008 was 8.7 percent compared to 9.2percent in September 2007.
Ratio of the total NPLs to total deposits was 4.3 percent compared to 5.0 percent
during the same period.
Brunei Economic Bulletin
Page 10
Chart 2.3: Non-performing loans, September 2008
Source: Ministry of Finance
NPL rose by 5.8%.
Ratios of the total NPL to loanoutstanding was 10.4% in
September 2008.
Source: Ministry of Finance
Chart 2.2: Direction of loans and advances (share), end September 2008
1% 1%11%
40%
20%
24%
3%
A gri cu lt ur e C re di t a nd F in an ce
Manufactur ing Transport at ion
Const ruction Genera l Commerce
Professional Services
69%
31%
Personal Loans Mortgage
0
100
200
300
400
500
600
Sep Dec Mar Jun Sep
2007 2008
BNDmillio
60 - 81 days 91 - 120 days > 120 days
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Volume 6 - Issue 3
Page 11
Chart 2.4 : Ratio of non-performing loans to total loans
Source: Ministry of Finance
0
2
4
6
8
10
12
Total NPL 60-90 days 91-120 days >120 days
Sep-07 Sep-08
%
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Overview
In Q3 2008, total revenue was recorded at BND3,878.1 million, up from
BND2,266.6 million in Q3 2007 (Table 3.1and Annex 3.1). The total expenditure,
on the other hand, was down to BND1,070.9 million in Q3 2008 from BND1,430.6
million in the same quarter last year. This brought a fiscal surplus of BND2,807.2
million in Q3 2008 (Annex 3.2and Chart 3.4).
The bulk of revenue was generated from the oil and gas sector (Table 3.1). In Q3
2008, the revenue from the oil and gas sector was BND3,658.9 million (94.3
percent). Meanwhile, the non-oil and gas sector revenue contributed BND219.2
million (5.7 percent) to the fiscal coffer. In comparison, the oil and gas sector and
non-oil and gas sector contributed BND2,089.9 million (92.2 percent) and
BND176.8 million (7.8 percent) to the total receipts in Q3 2007, respectively.
Total revenues and expenditures accumulated for the first 9 months of 2008
amounted to BND9,860.6 million and BND4,303.2 million, respectively. There has
been a significant jump in total revenues compared to BND6,149.2 million
registered during the same period in 2007 mainly attributed to the increase in prices
of oil and gas. On the other hand, total accumulated expenditures remained
relatively stable compared to BND4,406.9 million registered during the same period
in 2007.
Total revenue reached 67.8 percent of GDP in Q3 2008 compared to 50.1 percent of
GDP in Q3 2007 (Table 3.1). The oil and gas revenue surged to 64.0 percent of
GDP compared to 46.2 percent of GDP in Q3 2007 as oil and gas revenues
remained very high. The non-oil and gas revenue stood at 3.8 percent of GDP
compared to 3.9 percent of GDP in the same period in 2007. This showed that the
governments revenue had benefitted substantially from the high energy prices.
However, the lower ratio for the non-oil & gas revenue compared to a year ago
indicated that the countrys non-oil & gas industry had not grown over the last one
year.
3.Public Finance
Brunei Economic Bulletin
Page 12
Total revenue increased by 71.1percent year-on-year, while total
expenditure down by 25.1percent. Surplus surged 235.8percent.
Total revenue reached 67.8% ofGDP in Q3 2008 compared to50.1% of GDP in Q3 2007.
Table 3.1: Revenue
Source: Ministry of Finance
2007 2008 2008
Q3 Q4 Q1 Q2 Q3 (Jan-Sept)
Total revenue (BNDMillion) 2,266.6 2,635.4 3,203.4 2,779.2 3,878.1 9,860.7
Oil and Gas revenue (BNDMillion) 2,089.9 2,359.1 2,663.3 2,606.4 3,658.9 8,928.6
Non-Oil and Gas revenue (BNDMillion) 176.8 276.3 540.1 172.8 219.2 932.1
Oil and Gas revenue (% of total revenue) 92.2 89.5 83.1 93.8 94.3 90.5
Non-Oil and Gas (% of total revenue) 7.8 10.5 16.9 6.2 5.7 9.5
Total revenue (% of GDP) 50.1 48.1 63.2 54.2 67.8 61.9
Oil and Gas revenue (% of GDP) 46.2 43.1 52.6 54.2 64 56.1
Non-Oil and Gas revenue (% of GDP) 3.9 5.0 10.7 3.4 3.8 5.9
Surplus (% of GDP) 18.5 22.9 23.4 30.5 49.1 34.9
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Government revenue
Total revenue comprised of tax and non-tax revenue (Table 3.2). Tax revenue
accounted for 70.2 percent of the total revenue in Q3 2008 (Chart 3.1). Thisincluded taxes on net income and profits, taxes on international trade and taxes on
goods and services The non-tax revenue accounted for the remaining 30.1 percent
and comprised of property income, administrative fees and charges and other non-
tax revenue.
Tax revenue
Taxes on net income and profits increased by 76.6 percent year-on-year from
BND1,512.1 million in Q3 2007 to BND2,669.6 million in Q3 2008 (Table 3.2).
This was mainly attributed to the surge in global oil prices that had made the
corporate taxes from oil and gas production to rise sharply. Corporate tax receipts
from oil rose 76.6 percent year-on-year from BND1,510.7 million Q3 2007 to
BND2,668.3 million in Q3 2008.
Taxes on international trade (comprised of import duties and export taxes) rose by
22.9 percent from BND29.1 million in Q3 2007 to BND35.8 million. Taxes on
tobacco were down by 8.0 percent from BND4.5 million to BND4.2 million.
Meanwhile, taxes of motor vehicles increased by 22.6 percent from BND15.8
million to BND19.4 million.
Taxes on goods and services, comprising of licenses on financial companies and
others, as well as excise duties increased by 19.6 percent from BND3.9 million in
Q3 2007 to BND4.7 million in Q3 2008.
Volume 6 - Issue 3
Page 13
Tax and non-tax revenue, formed69.9 and 30.1 percent of the total
revenue in Q3 2008, respectively
Chart 3.1: Share of tax and non-tax revenue of total revenue
Source: Ministry of Finance
Taxes on net incomes up by 76.6%year-on-year; taxes on
international trade rose by 22.9%year-on-year; and taxes on goodsand services increased by 19.6%
year-on-year.
-
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
Q3 Q4 Q1 Q2 Q3
2007 2008
Tax revenue Non-tax revenue
%
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Non-tax revenueOverall, the non-tax revenue rose by 61.9 percent year-on-year from BND721.5
million in Q3 2007 to BND1,168.0 million in Q3 2008 (Table 3.2and Chart 3.2).
In Q3 2008, the non-tax revenue contributed 30.1 percent of the total revenue. Non-
tax revenue, comprised mainly of the property income from the oil sector (oil and
gas royalties and dividend paid by oil companies). The contribution of the oil and
gas royalties increased by 53.8 percent from BND233.3 million in Q3 2007 to
BND358.8 million in Q3 2008. Payment of dividend rose by 73.5 percent from
BND410.7 million to BND712.5 million, during the same period.
Meanwhile, the property income from the non-oil and gas sector (other royalties,
rent and interest and others) was up by 147.0 percent from BND12.7 million in Q3
2007 to BND31.4 million in Q3 2008.
Another component of the non-tax revenue is the administrative fees and charges on
sales of goods and fines, which recorded an increase of 0.5 percent (from BND63.9
million in Q3 2007 to BND64.2 million in Q3 2008). This was due to a decline in
receipts from telecom and utilities fees and charges from BND40.8 million to
BND35.8 million. Meanwhile, other non-tax revenue increased from BND 1 million
in Q3 2007 to BND1.1 Million in Q3 2008.
The remaining component of the non-tax revenue, other non-tax revenue, showed a
marginal increase of only BND0.1 million during the same period.
Brunei Economic Bulletin
Page 14
Table 3.2: Tax revenue BND Million
Source : Ministry of Finance
Non-tax revenue rose by 61.9%and contributing 30.1% to total
revenue
2007 2008 2008
Q3 Q4 Q1 Q2 Q3 (Jan- Sept)
Taxes on net income and profits 1,512.1 1,681.7 1,741.8 1,787.7 2,669.9 6,199.1
Taxes on international trade 29.1 36.0 33.2 32.5 35.8 101.5
Taxes on goods and services 3.9 5.6 4.7 3.9 4.7 13.3
Total tax revenue 1,545.1 1,723.3 1,779.7 1,824.1 2,710.1 6,313.9
Property income 656.6 833.0 1,161.1 890.3 1,102.7 3,154.1
Administrative fees and chargeson goods and fines
63.9 78.1 261.6 63.6 64.2 389.4
Other non-tax revenue 1.0 1.0 1.0 1.0 1.1 3.1
Total non-tax revenue 721.5 912.1 1,423.7 954.9 1,168.0 3546.6
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Expenditure
The total expenditure recorded a decline of 25.1 percentfrom BND1,430.6 million
in Q3 2007 to BND1,070.9 million in Q3 2008 (Table 3.3and Annex 3.2). It stood
at 18.7 percent of GDP in Q3 2008 compared to 31.6 percent of GDP in Q3 2007
(Table 3.3). The decline was attributed to a sharp drop in charged and Other
Charges Special Expenditure (OCSE).
Page 15
Chart 3.2 : Non-tax revenue
Source : Ministry of Finance
Expenditure was down by 25.1percent year-on-year. It stood
at18.1% of GDP in Q3 2008compared to 31.6% of GDP in Q3
2007.
Chart 3.3: Expenditure
Source : Ministry of Finance
Table 3.3: Fiscal Spending
Source : Ministry of Finance
Particulars2007 2008 2008
Q3 Q4 Q1 Q2 Q3 (Jan-Sept)
Total expenditure (BNDMillion) 1430.6 1380.1 2019.5 1212.8 1070.9 4303.2
Current expenditure (BNDMillion) 1069.2 1190.0 1584.3 1081.1 874.4 3539.8
Capital expenditure (BNDMillion) 361.4 190.1 435.2 131.7 196.6 763.4
Total expenditure (% of GDP) 31.6 25.2 39.9 23.6 18.7 27
Current expenditure (% of GDP) 23.6 21.7 31.3 21.1 15.3 22.2
Capital expenditure (% of GDP) 8.0 3.5 8.6 2.6 3.4 4.8
Volume 6 - Issue 3
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200.00
400.00
600.00
800.00
1,000.00
1,200.00
Q3 Q4 Q1 Q2 Q3
2007 2008
Oil & gas sector Other Administrat ive fees and charges Other non-tax revenue
BND '000
-
500.00
1,000.00
1,500.00
2,000.00
2,500.00
Q3 Q4 Q1 Q2 Q32007 2008
BNDmillion
Current Capital Total Expenditure
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Current expenditure
On a year-on-year basis, the current expenditure was down by 18.2 percent from
BND1,069.2 million in Q3 2007 to BND874.4 million in Q3 2008 (Table 3.3). This
was due to a decrease in charged expenditure by 69.0 percent from BND345.5
million to BND107.1 million (Annex 3.2). Meanwhile, wages & salaries and
OCAR increased by 3.0 percent from BND388.4 million to BND400.2 million and
by 9.5 percent from BND335.2 million to BND367.0 million, respectively. Current
expenditure accounted for 81.6 percent of the total expenditure in Q3 2008
compared to 74.7 percent in Q3 2007
In Q3 2008, current expenditure stood at 15.3 percent of GDP compared to 23.6
percent of GDP in Q3 2007 as charged expenditure dropped while wages & salariesand OCAR grew (Annex 3.2).
Capital expenditure
Capital expenditure as a proportion to total expenditure fell to 18.4 percent
compared to 25.3 percent in Q3 2007. Capital expenditure comprised of OCSE and
development expenditure, which in total declined by 45.6 percent from BND361.4
million in Q3 2007 to BND196.6 million in Q3 2008 (Table 3.3).
OCSE had declined by 74.7 percent year-on-year from BND228.0 million to
BND57.7 million during the same period. Meanwhile, development expenditure
grew by 4.1 percent from BND133.5 million to BND138.9 million.
In Q3 2008, capital expenditure dropped to BND196.6 million (3.4 percent) of GDP
compared to BND361.4 million (8.0 percent) of GDP in Q3 2007 as OCSE
decreased sharply while development expenditure remained relatively stable (Table
3.3).
Fiscal balance
The fiscal balance in Q3 2008 recorded a surplus of BND2,807.2 million, an
increase of 235.8 percent from BND836.0 million in Q3 2007. This was attributed
to a 71.1 percent increase in revenue in combination with a 25.1 percent decrease in
expenditure. The fiscal surplus rose to 50.1 percent of GDP in Q3 2008 compared
to 18.5 percent of GDP in Q3 2007 as the oil and gas revenue remained very high
while the non-oil and gas revenue remained relatively stable (Table 3.1, Chart 3.5
and Annex 3.2).
Brunei Economic Bulletin
Page 16
Capital expenditure declined year-on-year by 45.6% as a result of
higher RKN projects spending andlower OCSE spending.
Fiscal surplus reached 49.1% ofGDP in Q3 2008 compared to
18.5% of GDP in Q3 2007.
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Page 17
Chart 3.4: Fiscal position
Source : Ministry of Finance
Chart 3.5: Public finance
Source : Ministry of Finance
-
500.00
1,000.00
1,500.00
2,000.00
2,500.00
3,000.00
3,500.00
4,000.00
4,500.00
Q3 Q4 Q1 Q2 Q3
2007 2008
BNDmillion
Total revenue Total expenditure Budget surplus/ deficit
Volume 6 - Issue 3
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
Q1 Q2 Q3 Q4 Q1 Q2 Q3
2007 2008
%ofnominalG
DP
Revenue (%of GDP) Expenditure (%of GDP) Fiscal Balance (%of GDP)
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Brunei Economic Bulletin
Page 18
The average consumer price index in Q3 2008 was recorded at 105.9 (Table 4.1
and Chart 4.1). This translated to an average year-on-year inflation rate of 3.1
percent. On a year-to-date basis (January to September 2008), general prices have
gone up by 2.2 percent.
Price pressures from Food and Non-Alcoholic Beverages contributed 1.5
percentage points to the overall CPI inflation in Q3 2008 (Table 4.2). Five other
4.Consumer Price Index
Table 4.1: CPI Q3 2008 Key figures
Source: Department of Economic Planning and Development, Prime Minister's Office
Average inflation rate in Q3 2008 was3.1 percent, year-on-year drivenmainly by higher index of Food and
Non-Alcoholic Beverages as well asMiscellaneous Goods and Services
No Major Groups
Weight(%)
Index % Change
Q32007
Q22008
Q32008
Q32008/
Q22008
Q32008/
Q32007
Overall Index 100 102.7 105.1 105.9 0.8 3.1
IFood and Non-AlcoholicBeverages
28.8 104.2 107.9 109.6 1.6 5.2
II Clothing and Footwear 5.6 89.1 92.6 90.0 -2.8 1.0
IIIHousing, Water, Electricity andMaintenance
8.8 96.7 96.8 97.2 0.4 0.5
IVHousehold Goods, Servicesand Operation
8.6 93.1 95.3 95.4 0.1 2.5
V Transport 22.5 107.0 108.5 109.5 0.9 2.3
VI Communication 5.5 88.3 88.2 88.1 -0.1 -0.2
VII Education 4.7 98.0 98.1 98.0 -0.1 0.0
VIII Medical and Health 1.0 101.6 102.7 102.6 -0.1 1.0
IX Recreation and Entertainment 8.1 121.1 124.6 127.1 2.0 5.0
XMiscellaneous Goodsand Services
6.4 107.4 111.5 111.3 -0.2 3.6
Chart 4.1: CPI and year-on-year change
Source: Department of Economic Planning and Development, Prime Minister's Office
104.6
105.9
105.1
103.6
102.7102.7
102.2
-0.6
1.2
3.1
2.32.3
0.4
0.2
100
101
102
103
104
105
106
107
Q107 Q2 07 Q3 07 Q4 07 Q108 Q2 08 Q308
Index(2002=100)
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
Y-O-Y%Change
CPI %Change
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groups of commodities contributed to inflation in Q3 2008. They are: Transport;
Recreation and Entertainment; Miscellaneous Goods and Services; Household
Goods, Services and Operation; and Clothing and Footwear.
Recent developments in the CPI
The increase in CPI in Q3 2008 was primarily led by a 5.2 percent increase in the
index of Food and Non-Alcoholic Beverages (Annex 4.1). Higher prices were
recorded for Cooking Oil (40.8 percent); Noodle (30.3 percent); Flour (17.1
percent); Cocoa-Based and Other Beverages (11.0 percent); and Milk (7.9 percent).
The Food/Drink Away from Home sub-group of indices increased by 5.5 percent,
year-on-year.
Prices in the Recreation and Entertainment group also contributed significantly to
the price pressure. On the Recreation side, upward pressure on prices came from
Other Recreations and Entertainments (increased 0.9 percent). On the Hobbies and
Other Miscellaneous Expenditure side, upward pressure came from Holiday
Package Expenses, which edged up 5.4 percent;and Pets and Related Equipment,
which rose by 15.9 percent.
Prices in the Miscellaneous Goods and Services group of commodities also
continued to contribute significantly to the price pressure, coming in at 3.6 percent,
year-on-year. Within this group, Ladies Personal Effects section posted the highest
increase of 16.4 percent, year-on-year. Items within this section include gold and
watch.The cost of Ladies Personal Care also contributed to the upward pressure on
prices, by 6.4 percent.
The increase in prices within the group of Household Goods, Services and
Operation averaged at 2.5 percent. Within this group, all section indices except for
Household Furnishings posted higher prices. Household Operation, which
comprises of items such as washing detergent; plastic bucket; and plugs, registered
the highest increase of 5.0 percent, year-on-year. Meanwhile, Other Household
Services, which comprises of dry cleaning; rubbish collection; and grass cutting
services, rose 4.9 percent.
The 2.3 percent increase in the major group of Transport was mostly due to a 3.1
percent increase in the cost of purchasing vehicles. Another significant contributor
was the cost of airfare, which rose by 6.2 percent, year-on-year.
Volume x - Issue x
Page 19
Table 4.2: CPI growth decomposition analysis Q3 2008 (year-on-year)
Source: Department of Economic Planning and Development, Prime Minister's Office
Major Groups % Points
Food and Non-Alcoholic Beverages 1.5
Transport 0.5
Recreation and Entertainment 0.4
Miscellaneous Goods and Services 0.2
Household Goods, Services and Operation 0.2
Clothing and Footwear 0.1
Overall CPI 3.1
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The index of Clothing and Footwear rose by 1.0 percent, year-on-year. All the sub-
groups under Clothing and Footwear posted higher indices, and this could be partly
attributed to prices rebounding after the Mid-Year Sales (22 June 3 August).
The index of Medical and Health also increased 1.0 percent, year-on-year. Prices of
Proprietary Medicines and Supplies and Therapeutical Appliances increased 2.1 and
1.7 percent, respectively. However, the price of Medical Treatment fell by 0.7
percent.
Higher prices of Housing Insurance (5.7 percent) and Maintenance and Minor
Repairs (2.6 percent) raised the index of Housing, Water, Electricity and
Maintenance by 0.5 percent.
The only major index that fell in Q3 2008 is for Communication, by 0.2 percent.
This was due mainly to a 1.0 percent fall in the cost of Instruments including
Accessories.
Finally, the index for Education was unchanged. An increase of 0.4 percent in the
cost of School and Other Fees were mitigated by fall in the cost of School
Textbooks and Stationery and Computer and Accessories (1.3 and 0.7 percent,
respectively).
Brunei Economic Bulletin
Page 20
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5.External Trade
Overall Trend
Total external trade (defined as exports plus imports) expanded by 45.0 percent
year-on-year in Q3 2008 after a 29.6 percent growth in Q2 2008 (Table 5.1). It
amounted to BND5,303.2 million in Q3 2008 compared to BND3,656.9 million in
Q3 2007.
Total exports grew by 52.7 percent year-on-year in Q3 2008, primarily driven by
higher energy prices (Table 5.2). Imports also grew by another 23.1 percent.
Such development brought the countrys trade balance to BND2,971.4 million in
Q3 2008, an increase of 68.6 percent year-on-year compared to BND1,761.9
million in Q3 2007.
Exports
The Q3 2008 export proceeds of BND4,137.3 million were mainly generated from
three main commodities: oil, LNG and garments.
Oil exports, which accounted for 53.1 percent of the total exports in Q3 2008,
remained Brunei Darussalams leading source of foreign exchange receipts (Chart
5.1 and Table 5.3). Exports revenue from this commodity recorded a surge of 24.9
percent to BND2,194.9 million in Q3 2008 as oil prices continued to rise since the
Volume x - Issue x
Page 21
Table 5.1: External trade
Source: Department of Economic Planning and Development, Prime Minister's Office
Table 5.2: External trade year-on-year percentage growth
Source: Department of Economic Planning and Development, Prime Minister's Office
The Size of Brunei Darussalamsexternal trade was up from
BND3,659.9 million in Q3 2007 toBND5,303.2 million in Q3 2008
Higher export receipt was primarilydriven by higher energy prices
The volume of oil export dropped
while the prices of oil shot up
2007 2008
Q1 Q2 Q3 Q4 Q1 Q2 Q3
% change
Exports -14.3 -11.7 -14.2 24.1 34.7 36.8 52.7
Domestic Exports -14.4 -12.0 -15.1 23.7 35.8 37.7 55.5
Re-Exports -13.4 1.5 37.5 45.1 -15.0 -0.3 -43.4
Imports 22.4 10.1 37.5 7.4 12.7 4.0 23.1
Balance of Trade -22.7 -18.2 -28.6 29.6 42.6 49.8 68.6
Total external trade -8.6 -7.7 -4.9 20.7 30.1 29.6 45.0
2007 2008 quarter-on-
quarter
year-on-yearQ1 Q2 Q3 Q4 Q1 Q2 Q3
BND million% change in
Q3 2008
Exports 2,604.5 2,716.3 2,709.4 3,526.1 3,507.0 3,716.5 4,137.3 11.3 52.7
Domestic Exports 2,547.8 2,654.8 2,633.2 3,457.6 3,458.8 3,655.2 4,094.2 12.0 55.5
Re-Exports 56.7 61.5 76.2 68.5 48.2 61.3 43.1 -29.7 -43.4
Imports 689.7 770.0 947.5 758.7 777.2 800.9 1,165.9 45.6 23.1
Balance of Trade 1,914.8 1,946.3 1,761.9 2,767.4 2,729.8 2,915.6 2,971.4 1.9 68.6
Total external trade 3,294.2 3,486.3 3,656.9 4,284.8 4,284.2 4,517.4 5,303.2 17.4 45.0
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first quarter of 2007. The weighted average crude oil price for Brunei Darussalam
was at USD126.2 per barrel in Q3 2008 compared to USD77.4 per barrel in Q3
2007. The total value of oil exports increased year-on-year despite a substantial
decline in oil exports volume. It fell by 19.4 percent (from 164,077 barrels per dayin Q3 2007 to 132,203 barrels per day in Q3 2008).
LNG, the second largest source of foreign exchange receipt (45.2 percent in terms
of share) rose by 125.1 percent to BND1,869.4 million in Q3 2008 from BND830.6
million a year ago (Table 5.3). The increase was attributed to both higher LNG
prices and exports volume. LNG prices stood at USD14.2 per MMBtu in Q3 2008
compared to USD6.0 per MMBtu in Q3 2007. Exports volume grew by 4.8 percent
to 1,060,973 MMBtu per day in Q3 2008 compared with 1,012,803 MMBtu per day
in Q3 2007.
Garments made up around 0.7 percent of total exports (Chart 5.1). Its exports
proceeds declined by 34.2 percent on the back of lower garment production from
523,990 dozen in Q3 2007 to 502,656 dozen in Q3 2008.
The remaining 1.1 percent of Brunei Darussalams total export consisted of re-
export of Food and Beverages and Tobacco, Crude Materials Inedible, Mineral
Fuels, Animal and Vegetable Oils and Fats, Chemicals, Manufactured Goods,
Machinery and Transport Equipment, Miscellaneous Manufactured Articles and
Miscellaneous Transactions. Re-export of Machinery and Transport Equipment
made up of the biggest share at 62.6 percent of the total re-export value.
Brunei Economic Bulletin
Page 22
Export proceeds from LNG rose.Both the volume and price of
LNG rose in Q3 2008
Production of garments fell by 4.1percent
Chart 5.1: Percentage distribution of export in Q3 2008
Source: Department of Economic Planning and Development, Prime Minister's Office
Crude Oil, 53.1%
LNG, 45.2%
Garments, 0.7%Others, 1.1%
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Direction of trade
Brunei Darussalams top four export destinations in Q3 2008 were Japan,
Indonesia, South Korea and Australia (Table 5.4). Altogether, they accounted for
94.0 percent of Brunei Darussalams total export in this quarter. Mineral fuels are
the major export commodities, which accounted for almost 100 percent of the total
export to these countries.
Japan remained the dominant export market for Brunei Darussalam accounting for
41.9 percent of total export, followed by Indonesia (21.9 percent), South Korea
(15.3 percent) and Australia (14.9 percent).
In Q3 2008, Brunei Darussalams export to South Korea expanded by 98.9 percent,
while export to Japan expanded by 86.0 percent, Indonesia by 79.5 percent and
Australia by 51.8 percent.
Imports
Brunei Darussalams total imports in Q3 2008 stood at BND1,165.9 million (Table5.5). Machinery & Transport Equipments, contributed 48.2 percent to Brunei
Darussalams total imports. In Q3 2008, its imports bill stood at BND562.2
million. In comparison, the Q3 2007 figure was BND446.4 million.
Imports of Manufactured Goods in Q3 2008 rose by 34.8 percent, year-on-year.
This group of commodity accounted for 19.4 percent of the total imports. Food and
Live Animals accounted for 10.9 percent of the total imports. The value was
BND127.4 million. Imports of this commodity group increased by 12.5 percent
year-on-year.
Volume 6 - Issue 3
Page 23
In Q3 2008, Japan and Indonesiaremained the dominant export
market for Brunei Darussalam,accounting for almost 64 percent
of total export.
Most of the countrys importcomprised Of Mineral Fuels,Lubricants & Related Materials,
Machinery and TransportEquipments and Manufactured
Goods. These three groups
accounted for almost 82 percent ofthe total import.
Table 5.3: Export by major commodities
Source: Department of Economic Planning and Development, Prime Minister's Office
Table 5.4: Top four export market
Source: Department of Economic Planning and Development, Prime Minister's Office
Q3 2007 Q3 2008Share in Q32008 (%)
year-on-year
BND million% change in
Q3 2008
Japan 931.2 1,731.9 41.9 86.0
Indonesia 504.6 905.8 21.9 79.5
South Korea 319.2 635.0 15.3 98.9
Australia 405.4 615.4 14.9 51.8
2007 2008quarter-on-
quarter
Year-on-yearQ3 Q1 Q2 Q3
(BND million)
% change in
Q3 2008
Crude Oil 1758.0 2090.7 2337.4 2194.9 -6.1 24.9
LNG 830.6 1332.2 1279.1 1869.4 46.1 125.1
Garments 40.9 34.6 37.5 26.9 -28.3 -34.2
Others 79.9 49.5 62.5 46.1 -26.2 -42.3
Total Exports 2709.4 3507.0 3716.5 4137.3 11.3 52.7
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Brunei Economic Bulletin
Page 24
Miscellaneous Manufactured Articles accounted for another 8.0 percent of the total
imports. In Q3 2008, the bill was BND92.8 million. Miscellaneous Manufactured
Articles imports, however, decreased by 17.9 percent, year-on-year.
Accounting for 6.1 percent of the aggregate imports bill was payments for
Chemicals, which, in Q3 2008 amounted to BND71.6 million or grew by 19.7
percent, year-on-year (Chart 5.2).
Table 5.5: Import by commodity section
Source: Department of Economic Planning and Development, Prime Minister's Office
2007 2008 quarter-on-
quarter
year-on-yearQ3 Q1 Q2 Q3
(BND million)% change in
Q3 2008
Food & Live Animals 113.2 98.7 117.9 127.4 8.1 12.5
Beverages & Tobacco 20.0 17.0 20.7 22.0 6.3 10.0
Crude materials, Inedibleexcept Fuels
4.8 4.0 5.9 6.2 5.1 29.2
Mineral fuels, Lubricants &Related Materials
12.7 6.1 23.6 43.8 85.6 244.9
Animal & Vegetable Oils &Fats
3.4 5.0 4.4 4.4 0.0 29.4
Chemicals 59.8 62.9 66.2 71.6 8.2 19.7
Manufactured Goods 167.9 183.8 208.3 226.4 8.7 34.8
Machinery & TransportEquipments
446.4 330.8 277.0 562.2 103.0 25.9
Misc. Manufactured Articles 113.1 67.1 72.3 92.8 28.4 -17.9
Misc. Transactions &Commodities, n.e.c
6.1 1.8 4.7 9.0 91.5 47.5
Total Import 947.5 777.2 800.9 1,165.9 45.6 23.1
Chart 5.2: Import by major commodity in Q3 2008
Source: Department of Economic Planning and Development, Prime Minister's Office
Foo d & Live Animals, 10.9%
M achinery & Transport
Equipments, 48 .2%
M anufactured Good s, 19.4%
M isc. Manufactured articles,
8.0%
Chemicals, 6.1%
Others, 7.4%
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Volume 6 - Issue 3
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Imports Market
Singapore was the biggest source of imports in Q3 2008, accounting for 32.0
percent share. Its imports value increased by 14.3 percent from BND326.4 million
to BND373.2 in Q3 2008. Machinery and Transport Equipment was the majorimport commodity from Singapore.
Peninsular Malaysia fell to the second largest source of imports in Q3 2008 with
15.3 percent share (Table 5.6). Food and Live Animals was the biggest imports
commodity.
The rest of Brunei Darussalams import came from U.S.A (9.9 percent), China (6.5
percent) and Japan (6.0 percent).
Table 5.6: The main source of import
Source: Department of Economic Planning and Development, Prime Minister's Office
Q3 2007 Q3 2008Share in Q3 2008
(%)
year-on-year
BND million% change in
Q3 2008
Singapore 326.4 373.2 32.0 14.3
Peninsular Malaysia 134.4 178.6 15.3 32.9
U.S.A 71.0 114.9 9.9 61.8
China 68.9 75.3 6.5 9.3
Japan 59.4 69.5 6.0 17.0
Singapore, with 32.0 percentshare, was the countrys biggest
source of imports
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Brunei Economic Bulletin
Page 26
Crude oil priceThe weighted average crude oil price index of Brunei Darussalam rose by 63.0
percent from 260.6 in Q3 2007 to 424.9 in Q3 2008 (Annex 6.1). On a quarter-on-
quarter (q-o-q) basis, the weighted average crude oil price index of Brunei
Darussalam decreased by 2.1 percent from 434.1 in Q2 2008 to 424.9 in Q3 2008.
In July 2008, the weighted average crude oil price (WACOP) of Brunei Darussalam
was USD142.7 per barrel, which was the highest price ever recorded for Brunei
Darussalam. On a month-on-month (m-o-m) basis, it grew by 5.8 percent compared
to USD134.9 per barrel in June 2008.
The soaring prices in July 2008 were contributed by a meagre Q2 2008 OECD
stock build and tight global distillate balance. Crude disruption in the North Sea,
Nigeria and Iraq were also other contributing factors to the oil price increase.
Prices in August 2008 decreased 13.9 percent (m-o-m) to USD122.8 per barrel. The
average world price of oil (all countries spot price FOB weighted by estimated
export volume) for August 2008 was USD114.0 per barrel. The increase in crude
supplies from OPEC, weaker OECD demand and the first seasonal US Gulf
hurricanes passed without anything more than precautionary shut-ins that had led to
the decrease in oil prices in August 2008.
September 2008 saw a further decline in the crude oil price by 10.5 percent to
USD109.9 per barrel compared to the August 2008 price. The decline was due to a
falling oil demand by the United States and other developed nations amid global
economic slowdown and financial crisis.
As a whole, the WACOP of Brunei Darussalam in Q3 2008 was USD126.2 per
barrel (Chart 6.1). Meanwhile, the average world price of oil for Q3 2008 was
USD115.2 per barrel (Chart 6.2).
6.Oil and Gas
0
20
40
60
80
100
120
140
USD/Barrel
0
2
4
6
8
10
12
14
16
USD/MMBtu
Crude Oil Price 65.0 76.7 77.4 96.5 100.2 128.9 126.2
LNG Price 5.7 5.9 6.0 7.5 10.1 11.8 14.2
Q12007 Q2 2007 Q3 2007 Q4 2007 Q12008 Q2 2008 Q3 2008
Chart 6.1: Brunei Darussalam's Weighted Average Crude Oil and LNG Price
Source: Petroleum Unit, Prime Ministers Office
The weighted average crude oilprice index of Brunei Darussalam
rose by 63.0 percentyear-on-year
July 2008 marked the periodwhen Brunei Darussalamsweighted average crude oil price
reached USD142.7 per barrel
Crude oil price in August 2008fell by 13.9 percent on a month-on-month basis
Crude oil prices continued theirdownward slide in September
2008
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Crude oil production
The production of crude oil in July 2008 was 161,132 barrels per day (bpd) (Annex
6.3). In August 2008, on a m-o-m basis, the production went up by 10.9 percent to
178,729 bpd but decreased again by 7.9 percent in September 2008 to 164,665 bpd.
As a whole, the average crude oil production in Q3 2008 stood at 168,213 bpd,reflecting a 11.7 percent decrease year-on-year (Chart 6.3). The decline was
contributed by a below satisfactory production level from the existing wells.
Volume 6 - Issue 3
Page 27
* Note: Quarterly all countries spot price FOB weighted by estimated export volume.Source: Petroleum Unit, Prime Ministers Office and Energy Information Administration
Chart 6.2: Brunei Darussalam's Weighted Average Crude Oil Price versusWorld's Weighted Average Crude Oil Price*
Chart 6.3: Brunei Darussalam's Average Crude Oil and LNG Production
Source: Petroleum Unit, Prime Ministers Office
40
50
60
70
80
90
100
110
120
130
140
USD/Barrel
Brunei Darussalam 65.0 76.7 77.4 96.5 100.2 128.9 126.2
World 54.7 65.0 71.9 85.2 93.5 117.5 115.2
Q12007 Q2 2007 Q3 2007 Q4 2007 Q12008 Q2 2008 Q3 2008
150,000
160,000
170,000
180,000
190,000
200,000
210,000
barrels
pe
r
day
800,000
850,000
900,000
950,000
1,000,000
1,050,000
1,100,000
1,150,000
M
MBtu
per
day
Crude Oil Production 202,441 190,615 190,570 191,853 192,633 159,811 168,213
LNG Production 1,038,070 950,952 1,045,870 1,050,814 1,096,669 890,684 1,033,951
Q12007 Q2 2007 Q3 2007 Q4 2007 Q12008 Q2 2008 Q3 2008
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Brunei Economic Bulletin
Page 28
LNG price
LNG price registered a 136.5 percent increase in Q3 2008 year-on-year, from
USD6.0 per million British thermal units (MMBtu) in Q3 2007 to USD14.2 per
MMBtu (Chart 6.1). On a q-o-q basis, LNG price increased by 20.4 percent fromUSD11.8 in Q2 2008.
During this period, two LNG cargoes were sold in the spot market at a higher price
levels reaching USD20.0 per MMBtu, which resulted in the highest cargo value
ever achieved by Brunei Darussalam.
LNG production
LNG production in Q3 2008 was registered at 1,033,951 MMBtu per day (Annex
6.4). This translated to a year-on-year decrease of 1.1 percent (and a q-o-q increase
of 16.1 percent). In comparison, the average LNG production was 1,045,870MMBtu per day in Q3 2007 and 890,684 MMBtu per day in Q2 2008 (Chart 6.3).
LNG price reached USD14.2 perMMBtu in Q3 2008
Two LNG cargoes were sold atUSD20.0 per MMBtu in the spotmarket, which was the highest
cargo value ever achieved inBrunei Darussalam
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Outlook
Volume 6 - Issue 3
Page 29
The economy in Q3 2008 had shown mixed results. In terms of output dynamics,
the implementation of National Development Plans projects had not picked up
pace as expected, therefore limiting the amount of capital expenditure being
injected into the economy. Oil production had been low, amid rising oil prices to
reach a very high level ever seen. Although the high oil prices had been very
favorable to Brunei Darussalam fiscal coffer, the average oil production in Q3 2008
of 168,213 barrels per day (ie, represented an almost 12 percent decline, year-on-
year) had pulled down the countrys overall GDP growth rate.
There were also signs that the banking sector had not been very successful in
channeling funds to businesses. Loan growth had been much lower compared to
growth in savings/deposits, leading to a fall in the loan-to deposit ratio (LDR).
Meanwhile, non-performing loans figure (in proportion to total loan balances) had
stayed at around 10 percent. This not only reflected a banking system that was
flushed with funds (ie, too much liquidity within the banking system), but also weak
lending activity - arguably due to sluggish business environment.
Given the negative growth rate in three consecutive quarters of 2008, it is very
likely that Brunei Darussalams economy will experience a strong negative growth
in 2008.
On the price front, situation had not been particularly encouraging, too. Price pressures continued to build up and resulted in a year-to-date (ie, January to
September 2008) inflation rate of 2.2 percent. This was above the earlier forecast of
between 1-2 percent for 2008.
Going forward, improvement in the implementation rate of RKN projects is
expected. However, low oil production in 2007 is expected to continue through the
rest of 2008. The volume of Brunei Darussalams exports, which consist of
primarily oil and gas, is expected to remain at the level seen in the first half of 2008.
Due to the expectation that global prices of oil will remain above its cost of
production in the remaining quarter of 2008, Brunei Darussalam is expected to
continue yet another year of surplus in both in the current and the fiscal accounts.
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STATUS AND UPDATES ON ICT IN BRUNEI DARUSSALAMOver the decade, ICT in Brunei Darussalam has undergone tremendous changes in
terms of policy and regulatory reforms, a significant increase in the number of ICT
service providers and the provision of ICT services as well as progressive
development of ICT initiatives.
ICT has been identified as one of the key catalysts for sustainable socio-economic
development. The ICT sector was introduced for the first time in the 8th National
Development Plan (NDP) and will be further promoted and prioritized in RKN
2007-2012. The focus will be towards enhancing ICT capacity-building including
infrastructure and human resource as well as full integration in both government
services and business processes. ICT capacity-building will support government
efforts towards achieving a Knowledge-Based Economy (KBE).
ICT progress and development achieved thus far in Brunei Darussalam is described
as follows:-
MAIN INFO-COMMUNICATION TECHNOLOGY PLAYERS
There are currently three telecommunication operators in the country namely
Telekom Brunei Berhad (Telbru), a public limited company wholly owned by the
Government of Brunei Darussalam as the fixed-line service provider, DST
Communications Private Limited, another quasi-government entity offering 3G
mobile phone services and b-Mobile Communications Private Limited, a private
company offering 2G mobile phone services. Below is the list of the current main
ICT players.
Telbru Berhad which provides basic telephony and a range of value-added services
such as leased-line services, ADSL broadband, VoIP and pre-paid calling cards.
DST Group Sdn Berhad, a private company based in Brunei Darussalam which
operates a 3G mobile network and provides some value-added services; VoIP and
internet access via 3G.
B-mobile Communications Sdn Berhad (a joint venture between Telbru Bhd and
QAF Comserve) which operates a 3G mobile network and provides VoIP and
internet access via 3G.
BAG Networks (a joint venture between the Government of Brunei and Accenture,
a global management consulting, technology services and outsourcing company) is
a company that provides IT solutions and services.
IFB was officially formed on August 5th 2007 as an initiative by BAG Networks
Sdn Berhad. IFB is a non-profit, national body dedicated to growing and nurturing
the Information Technology and Communications Industry in Brunei Darussalam.
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The society is non-sectarian, non-communal and non-political and represented by a
selective number of members of the local ICT industry.
ITPSS Pte4 Ltd, an IT security company, has been appointed as the agencyresponsible for all network security matters with respect to the e-Government in
Brunei Darussalam. It has also been appointed as BruCERT the first national
Computer Emergency Response Team for the country. BrueCERT provides
incident response, prevention, mitigation plans and security training for its
members, national alerting services and advisories, and a central report and
coordination point for security incidents throughout the nation.
BROADBAND
Currently, Telbru and DST are offering broadband services of speeds from 512
kbps to 1Mbps. The 3G technology employed by mobile phone operators (DST andB-Mobile) also enables the public to access the internet of up to 7.2 Mbps.
With the consent of His Majesty the Sultan and Yang Di-Pertuan of Brunei
Darussalam, Brunei Darussalam has agreed to participate in building together the
Asia-America Gateway or AAG submarine cable network linking Brunei
Darussalam to its neighbours in Southeast Asia. The AAGs designed capacity of
up to 1.92 Terabit per second of data bandwidth is tailored to meet the forecasted
explosive growth in bandwidth requirements.
The increased capacity will cater for the new technologies in broadband
applications such as IP, video and other multimedia services. AAG will also
improve internet and e-commerce traffic.
This project represents a strategic investment that will strengthen the security and
safeguard the interest of Brunei Darussalam by ensuring a secure and continuous
communication with the outside world. In other words, it serves as an alternative or
a back-up to the existing submarine cable (South East Asia Middle East West
Europe, SEA-ME-WE3).
It is also in line with the Ministry of Communications mission to provide a safe,
efficient, accessible and secure communications so as to enhance nationalcompetitiveness and quality of life in the Knowledge-Based Economy.
The final completion of the AAG in mid-2009 will enable Brunei Darussalam to
meet the expected growth in the countrys international bandwidth with the
development of various broadband applications such as IP-based data, video and
other multimedia services.
E-GOVERNMENT AGENCY SERVICES (EGAS) PROJECTS
To realize the Ministrys vision: Towards a Sophisticated Society and Excellence
in Communications for Enhancing National Competitiveness and to create aconducive and dynamic environment for sophisticated society, one of the key
initiatives in the ICT area is development and delivery of e-services via e-Mincom
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portal.
Under IS/IT Strategic Plan for e-Government, the Ministry of Communications
has the following missions:
Leveraging on the areas of ICT such as e-Commerce and e-Government to
provide an easy and conducive environment for business to flourish.
Increasing productivity and efficiency in business through better governance.
Focusing on K-economy the direction for all business dealings with ICT
cutting across all sectors i.e. banking, logistics, transportation and governance.
Ministry of Communications
E-Mincom Service PortalAn integrated service portal for hosting business-to-consumer applications
offered by the Ministry and its departments namely Land Transport, Ports,
Marine, Postal Services and Civil Aviation departments.
This portal is also designed to cater for other Ministries or Departments who wish
to embark on their own e-services by riding on the e-Mincom service portal
platform.
The common services and process archetypes include Single Sign-On, Bill
Presentation and Secured Online Payment and integration to banks payment
gateway.
Land Transport Department
Sistem Pengangkutan Darat (SPD)
It assists the department to replace/upgrade/modify/enhance their existing
application and the current computer configuration.
It also introduces new technologies such as issuance of driving licenses, vehicle
registration books/cards and vehicle licenses with MRC/MRD technologies as
well as providing their counter services online.
The system also integrates with the Inspection Station at the Vehicle Inspection
Centre (VIC) for uploads of vehicle data and downloads vehicle inspection
results.
Computerized Highway Code Examination System
It will provide written examinations/tests using computers where the questions
will be randomly selected from the database. Other features will be online
booking of test/examination dates, pre-registered dates of candidates as well as
automated examination results.
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Online Registration Number Tendering
It will provide online tendering of vehicle registration numbers in order to reduce
time spent awarding tenders due to redundancies.
Ports Department
E-Ports (Ports Information System)
The scope of this project is to provide an alternative access point for customers
and port users to conduct activities with the Ports Department via an online
website providing their services online. The objective of the project is to increase
tonnage throughput; to minimize customer turn-around time; to enhance service
quality and security; and to increase revenue.
It will carry out the applications and works for the ports system namely
Conventional Terminal Management System (CTMS) and ContainerManagement System (CMS) as well as building the interface between both
systems to exchange relevant data and integration to the e-Mincom portal.
Marine Department
E-Marine Marine Management System
The purpose of this project is for the supply of an integrated management system
with workflow and online capabilities together with associated implementation
services that will effectively enable the Marine Department to improve its work
practices in relation to its needs, and deliver genuine benefits and savings to the
Marine Department.
The objectives of the project is to improve the maintenance and monitoring of
the Marine Departments activities; to enhance the quality of services delivered;
and to enforce and enhance National oil spillage contingency plan for the
protection of the Maritime Environment. It will cover the maintenance
management of the Marine Assets to provide a better and efficient service to the
customers by providing their services online.
E-Marine Marine Information System
The scope of this project is to provide an online website to allow an alternative
access point for customers to conduct activities with the Department of Marine.
The objectives of this project implementation is to enhance maritime safety
through continuous and effective communication of news, events and
information on marine activities as well as maintaining safety standards as well
as to improve notification of maritime training plans.
Postal Services Department
Counter Automation System
A Post Office Computerized Counter System that supports all the operations of
25 Brunei Postal Services Post Offices which include sale of stock items, postalservices, agency services, telecommunications services, stock and cash
management.
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Brunei Economic Bulletin
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The system provides adequate resilience and security against tampering of data
as well as generates all necessary reports to reflect the activities of every user of
the system and reports for purposes of managing the cash and stock of every
user and the Post Office as a whole.
Information from the counter system shall be channeled where appropriate to
the Host System such as connectivity to other systems such as Telecom Brunei
(Telbru) mainframes and Data Stream Technology Sdn Berhad (DST) System
and other host agencies.
Web post (W-Post)
This project is a combination of IPS Tracing and Tracking of Mail Items and e-
Post projects, based from the endorsed IS/IT Plan. The scope of this project is
to provide an online website to increase customer satisfaction through providing
another access point online from the available 24-hour online service provided
for customer convenience.
It will feature a sophisticated new file tracking system utilizing a computerized
database and a network of bar code reading and printing equipment, inclusive of
Mail Item Tracking information, Operational Documentation as well as
Dispatch and Consignment Tracking Information.
Civil Aviation Department
E-Airport
The scope of this project is to provide an online website that provides users with
airport information as well as permits and applications relevant to the Civil
Aviations responsibilities via a new Airport Infrastructure System which can
cater for high-availability of connections with a modular architecture providing
much wider area connectivity and standard facilities to process and distribute
data efficiently.
Therefore, the Airport Management System can control the work order processes
for routine maintenance with fast response maintenance and periodic preventive
maintenance. The process can also provide a full range of diagnostic tests and
can expedite work order entry effectively.
Meteorological Web Service
This project will be a supplement to the e-Airport overall project by providing
meteorological-related services and products especially for aviation communities
and other airport users, general citizens and people of Brunei Darussalam,
regional and international customers.
E-Government Bandwidth Services (EGBS)
E-Government Bandwidth Services refers to the outsourcing broadband network
connectivity up to the routers/switches for all ministries and departments
(including its branches and related sites) under the Government of Brunei
Darussalam.
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The Ministry of Communications has been appointed the lead agency for the
EGBS implementation which is fully provided, developed and set up by Telbru
Sendirian Berhad.
E-Government Bandwidth Services (EGBS) provides interconnectivity between
departments and ministries throughout the Brunei Government as well as a single
point of connection to the World Wide Web via e-Government Centre Services
(EGC).
All ministries and departments of the Brunei Government require a total of 929
sites of EGBW connectivity which has been implemented by fiber optic (77%),
copper cable (21%) as well as wireless access (2%). Overall, 90% of these
required sites are now considered operational and ready for connection.
Key milestones in telecommunication regulation2001: The Government of Brunei Darussalam commenced a restructuring of the
ICT industry; three new pieces of legislation were enacted.
The Telecommunication Successor Company Order 2001 transfers all
property, rights and liabilities belonging to JTB to Telekom Brunei Limited
(Telbru) whereby Telbru assumes the role of service provider in place of
JTB. (JTB underwent the process of corporatization)
The AiTi Order 2001 establishes the Authority for Info-Communications
Technology Industry of Brunei Darussalam (AiTi) as an independentstatutory body to regulate, license and develop the local ICT industry and
manage the national radio frequency spectrum.
The Telecommunications Order 2001 confers upon AiTi the exclusive
privilege to operate and provide telecommunication systems and services in
Brunei Darussalam and allows AiTi to grant licenses for the same.
2003: AiTi established as an independent statutory body.
2005: B-Mobile created as a joint venture between Telbru and QAF Comserve.
Granted a license to operate a W-CDMA network and begins operations as
the competitor to incumbent mobile operator DST (and incumbent fixed-
line operator Telbru).
2006: The Telecommunication Order entered into force, giving AiTi full power to
grant licenses; Telecoms Act 1952 repealed. Government
telecommunications department (JTB) corporatized as Telbru, a public
limited company registered under the Brunei Darussalam Companies Act
and 100% owned by the Brunei Government.
2008: Transfer of Authority under the Broadcasting Act (Chapter 180) from the
Prime Ministers Office to the Ministry of Communications.
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ICT SME INNOVATION CENTRE
One of BEDBs current efforts aimed at building an ICT-related industry is the
establishment of the iCentre TM which began operations in August 2007. The
iCentre is an incubation centre with a capacity to host 16 incubates at a time.The management company overseeing the development of the centre also
provides an incubation program which incubates mentorship, training and legal
consultation.
The establishment undertakes the following tasks:
1. Identify and support high potential ICT start-ups
2. Nurture innovative technology ideas into commercial success
3. Facilitate growth in employment, revenue and exports of the ICT start-ups
4. Assist ICT start-ups to secure finance and other support from third parties
(including venture capitalists and private investors).
E-MEDIA UNIT OF THE MINISTRY OF COMMUNICATIONS
Key changes in policy and regulation in broadcasting that has taken place:
On 21st May 2008, the Brunei Government commenced a restructuring of the
broadcasting industry. To this effect, the official transfer of the Broadcasting Act
(Chapter 180) from the Prime Ministers Office to the Ministry of
Communications.
The transfer of the Act will mean that all regulatory functions with respect to
broadcasting such as issuance of the broadcasting licenses, collection of
revenues as well as monitoring and enforcement will now be carried out by the
Ministry of Communications. With the enforcement of this transfer, the public
will only need to deal with one organization.
Government media agencies like Radio Television Brunei (RTB) and the
Information Department are not affected by the transfer and will remain under
the administration of the Prime Ministers Office.
The main aim of the transfer is to monitor the broadcasting and communication
rules as a whole under one supervising ministry (convergence at the Ministrylevel) with better fundamentals and results as well as to improve and expand the
broadcasting industry, including multimedia to be the pride of the nation.
With the goal of allowing the community to utilize Information Technology
including multimedia, to gain competitive advantage through the coordination of
technology and usage model processes not only in the government sector but in
businesses, the private sector, non-government organizations as well as by the
public.
The Ministry of Communications Brunei Darussalam is also in the process of
conducting a review on the current regulatory framework to ensure that it is
always relevant with the evolution of technology and convergence as well as to
improve and expand the broadcasting industry including multimedia.
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FUTURE PROSPECTS
Fiber optics has been rolled out to ministries and business premises to
provide high speed broadband connection. Brunei Darussalam is also looking
into the prospects of deploying fiber optics in delivering high speed
broadband services to households.
There have been plans for a nationwide wireless blanket rollout. The Ministry
of Communications has formulated policy directives on the licensing of
wireless broadband access operators.
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TELECOMMUNICATIONS MAIN POLICY PAPER
One of the Ministry of Communications main tasks is to set out policy direc-
tions on ICT whilst AiTi is the implementing body.
Among the key policy points are:-
i. National Broadband Blueprint
The paper encompasses policy directions to address the crucial need to en-
hance the national ICT infrastructure issues namely on the accessibility and
affordability of the broadband service. It has been endorsed by His Majesty
the Sultan and Yang Di-Pertuan of Negara Brunei Darussalam. Among oth-
ers, the policy directions spelt out are the deployment of a mixture of technol-
ogy to provide broadband service, the engagement of public-private partner-
ship in this deployment and the investment in the AAG to complement inter-
national connectivity.
ii. Wireless Broadband Access
The paper consists of policy directions in spearheading the countrys progress
towards wireless broadband which are:-
To facilitate the provision of wireless broadband access, the Ministry of
Communications shall open up available bandwidth for WBA.
In order to create competition at least two operators shall be awarded the
WBA license.
AiTi the regulator and developer of ICT in Brunei Darussalam has opened uptenders for operating broadband wireless access in Brunei Darussalam and the
rollout of WBA technologies is planned as early as 2009.
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Brunei Economic Bulletin
Page 38
Internet penetrationInternet penetration 51.16%51.16%
Broadband penetrationBroadband penetration 3.18%3.18%
Mobile phone subscribersMobile phone subscribers 397,013397,013
Proportion of households with a fixed line telephoneProportion of households with a fixed line telephone 100%100%
ICT LEGISLATION
Below are gazette documents ruling ICT in Brunei Darussalam.
Intellectual Property Laws: The Emergency (Copyright) Order 1999
Trade Marks Act (Cap 98)
Inventions Act (Cap 72)
The Emergency (Layout Designs) Order 1999 and
The Emergency (Industrial Designs) Order 1999
Telecommunications and Regulatory Legislation (See also earlier paragraph)
Telecommunication Order
Telecommunications Successor Company Order
AiTi Order
Broadcasting Legislation
Broadcasting Act
Others:
Electronic Transaction Act
Table 1: BRUNEI DARUSSALAM ACHIEVEMENTS (AS OF DECEMBER 2007)BRUNEI DARUSSALAM ACH