AUDIT REPORT The accumulated federal government-guaranteed loans climbed by RM19.85 billion or 20.5 percent in 2011, breaking the RM100 billion mark for the first time to hit RM116.76 billion, reveals the Auditor-General's Report 2011.

The figure has doubled in four years and experienced a rapid rise since 2008. The hike from 2008 to 2011 was a whopping 69 percent or RM47.52 billion.
Government-guaranteed loans are loans taken by statutory bodies and companies but guaranteed by the federal government under the Loan Guarantee (Bodies Corporate) Act 1965.

These loans are separate from the federal government debt and are not reflected in the annual budget, and are often described as part of the country's "hidden debt".

According to the audit report, the federal government debt in 2011 hit RM456.12 billion, or 51.8 percent of the gross domestic product (GDP), a few percentage below the legislated debt ceiling of 55 percent.
If the RM116.76 billion of government guaranteed loans are included into the federal debt, the total debt would be RM573 billion or 65 percent of the GDP, which is way beyond the debt ceiling.

However, the Finance Ministry has argued that the government does not take contingent liabilities such as off-budget borrowing into account in its debt-to-GDP ratio as these are not "realised debts".

Alarming rise in PTPTN loans 

NONEThe Auditor-General's Report points out that the RM116.76 billion accumulated in 2011 made up the total outstanding domestic and external loans of two statutory bodies and 23 government-linked companies that Putrajaya guaranteed for as at the end of 2011.

The increase of RM19.85 billion from 2010 was largely due to the rise in loans for the National Higher Education Fund Corporation (PTPTN), plantation giant Felda and Jambatan Kedua Sdn Bhd.

The government also guaranteed new loans taken by Syarikat Govco Holdings Bhd, Pengurusan Air SPV Bhd and SRC International Sdn Bhd in 2011.

PTPTN, which has been raising its loans significantly since 2007, took up 17 percent or RM20.35 billion of the total guaranteed borrowings, followed by Pengurusan Air SPV Bhd (RM9.5 billion or eight percent) and Felda (RM3.42 billion or three percent).

The outstanding borrowings of PTPTN have more than doubled, from RM7.5 billion in 2007 to RM20.35 billion in 2011, the highest increase among all federal government-guaranteed borrowers.