Peter O’Neil, Former Prime Minister of Papua New Guinea, delivers a strong warning about the government’s controversial decision to switch public banking arrangements, calling it a disastrous move that harms ordinary Papua New Guineans.
Peter O’Neil Warns PNG’s Banking Shift Will Cost Citizens Billions, Calls It Economic Treason
by Peter O’Neil, MP. ~ Former Prime Minister of Papua New Guinea
Good morning all.
I made this important statement about our banking system a few minutes ago. It’s a bit long but essential we speak comprehensively and factually on this natioanlly important matter.
“Papua New Guineans the Biggest Losers in Government Decision to Switch Banking Arrangements”
The decision by Government to switch its banking arrangements from a publicly owned, dual stock exchange listed, and well-known bank established in PNG for nearly 70 years, to a government-controlled, freshly formed bank licenced only eight months ago, is having a devastating impact on Papua New Guineans.
Does this Marape-made madness never end with decision after decision hurting our people and destroying our international reputation?
86% of all shares in Bank South Pacific are owned by Papua New Guineans.
Yesterday the value of these shares was wiped out as the sensitive markets, already on high alert due to PNG’s massive corruption and certain grey-listing, reacted negatively to the news the Marape Government were moving all government accounts to the National Banking Corporation.
The workers, retirees, landowners and everyday Papua New Guineans have been dealt a cruel blow.
Papua New Guineans own 86% of BSP and thus, with the stroke of his pen, Marape has cost Papua New Guineans over two billion Kina (PGK2,236,000,000) in one single day.
Markets will continue to punish the BSP share price in coming days as the full fallout from the government meddling is felt.
Furthermore, the impact this government decision has had on landowners is massive and unjustified with MRDC owning 15% of all BSP shares.
Just two months ago, MRDC, an institution mandated to invest landowners’ equity, an institution with the Prime Minister acting as the sole Trustee Shareholder, confirmed they had purchased 70% of the BSP shares held by MVIL taking MRDCs total shareholding to 15% of BSP, making MRDC the second largest shareholder.
The MRDC Managing Director rightly said on the 18th of July 2025:
“BSP is the best performing blue-chip company and recognised financial institution in the Pacific region, providing consistent shareholder returns.”
The landowner companies stated by MRDC as having bought the shares, namely Gobe; Moran; Kutubu;
Gigira; Hides No.4; Juha; Angore; PNG LNG Pipeline; PNG LNG Plant Site and three landowner companies from Ok Tedi, must be absolutely horrified and angry at what the Marape government has done to the value of their recent investment.
The government would have known at the time the MVIL shares were sold to these landowners that the value would be wiped out in less than two months. This is a massive breach of trust and most likely insider trading to deliberately bring down the value of BSP.
Workers and retirees – the holders of superannuation funds have seen their investments crumble.
Our Pacific neighbours – the workers of the Solomon Island Islands and Fiji have also suffered the same fate with their own super funds having invested in BSP has a safe, prudent company.
The Marape decision is rippling across the Pacific Ocean creating a financial tsunami of destruction.
Peter O’Neil, MP.
We must have some obvious questions answered:
1. Why would this Marape led government make such a universally dreadful decision that hurts Papua New Guineans? It is tantamount to economic treason, a crime against its own people.
2. Who owns and who controls the National Banking Corporation? Is it still a 100% wholly owned subsidiary of the National Development Bank or has that changed? There is only vague statements ans no real information on their websites.
3. How did this new, apparently PNG owned bank, obtain its banking licence in record time as proclaimed by the BPNG Governor? Were all proper processes followed such as it having sufficient capital at the time the licence was granted in December 2024?
4. Why the rush to destroy the cornerstone of investment in PNG and choose to place all public monies in the hands of what was a state-owned microfinance company just a few months ago?
5. Government departments, bureaucrats and administrators have a clear mandated role to make decisions about where their bank accounts are held – why is the political arm of government making the decision on banking arrangements? Why have experienced and capable public servants if the Marape government is going to make our public monies their political business and interfere in the day-to-day machinery of government?
6. Why would government go against the advice of MRDC who just two months back stated it acquired more shares in BSP due to BSP being the best performing and best bank in the Pacific?
7. Is this destruction of BSP by the Marape led government deliberately to ensure the people’s public money can be controlled and accessed in the lead up to the next election?
The timing of this decision could not be worse as PNG faces the tightening grip of the IMF; the Kina slides; jobs evaporate; public debt climbs, and the grey listing seems certain.
The negative impact on our country’s reputation is going to take decades to restore.
The role we play in the Pacific Island nations financial systems means PNG needs to hold itself to the highest standard. We are failing not just ourselves with this decision but all our Pacific region.
Perhaps the opening of the new Waigani National Court Complex yesterday was also timely. Large enough to process all the criminals involved in this latest scandal who have ripped away the financial security from superannuation members – the workers and retirees – and decimated the fortunes of our landowner companies and generally created havoc for businesses and investors.
Marape appears to be empowered by his mistakes – gaining value from each deeply flawed decision at the expense of our people.
When will enough be enough and he hang his head in shame and resign or does he now believe he is not answerable to the people?
PO.
