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Petroleum Revenues are declining along with production meaning that the level of withdrawals from the Fund and the return from investment are the main drivers of
the size of the Petroleum Fund.
Table 2.6.3.3.2: Estimated Petroleum Fund Savings 2014-2020 m
2014 Actual
2015 Estimate
2016 Budget
2017 2018
2019 2020
Opening PF Balance 14,952.1
16,538.6 16,605.2 16,914.9
16,740.0 16,060.1
15,297.5
Petroleum Revenue excluding PF Interest
1,817.0 861.9
718.7 349.2
335.4 106.8
51.6 Petroleum Fund Interest,
Net 501.6
532.2 874.8
919.6 922.0
883.0 844.6
Total Withdrawals 732.0
1,327.5 1,283.8
1,443.7 1,937.3
1,752.4 1,497.3
Closing PF Balance 16,538.6
16,605.2 16,914.9
16,740.0 16,060.1
15,297.5 14,696.3
net of management and market revaluation
Source: Petroleum Fund Administration Unit, Ministry of Finance, 2015
2.7: Financing
2.7.1. Definition of Financing
The total budgeted expenditure for 2016 is higher than the domestic revenue that will be collected over the same period. This results in a non-oil deficit domestic
revenue minus expenditure which is financed by withdrawals from the Petroleum Fund PF, loans and use of the cash balance. The total amount of financing is equal
to the non-oil deficit and covers the gap between the budgeted expenditure and domestic revenue. Table 2.7.1.1 below shows the amount drawn from each of the
financing items.
Table 2.7.1.1: Financing m
2016 2017
2018 2019
2020 Total Financing
1,390.8 1,799.1
2,303.2 1,894.7
1,533.1
Estimated Sustainable Income ESI 544.8
534.5 519.8
490.1 464.9
Excess Withdrawals from PF 739.0
916.2 1,417.2
1,244.2 1,029.0
Use of Cash Balance 0.0
0.0 0.0
0.0 0.0
Borrowing Loans 107.0
348.4 366.2
160.5 39.2
Source: National Directorate of Economic Policy, Ministry of Finance, 2015
The economic impact of the financing items is different from that of domestic revenue. Domestic revenue, which is collected from taxes and charges paid by
individuals and companies in Timor-Leste, represents a transfer of income from one sector of the economy to another. Consequently, there is no significant change in
the overall demand in the economy, as the increase in demand from Government spending is approximately matched by a reduction in demand from private spending
companies and individuals.
