REPUBLIC OF INDONESIA
Recent Economic Developments
Published by Investors Relations Unit –Republic of Indonesia Address Bank Indonesia
International Directorate Investor Relations Unit
Sjafruddin Prawiranegara Building, 5thfloor
Jalan M.H. Thamrin 2 Jakarta, 10110 Indonesia
Tel +6221 381 8316
+6221 381 8298 Facsimile +6221 350 1950
E-mail Elsya Chani: [email protected]
Executive Summary
Indonesia’s economy has posted robust growth in 2008 and one of the rare countries which successfully posted a
positive growth rate in 2009, navigating through the global financial turmoil and economic slowdown. For the whole
2009, the economy charted fairly vigorous growth at 4.5%(yoy) and it is projected at 5.5-6.0 % in 2010
In the financial sector, banking industry remains solid with high level of CAR (17.4%) and comfortably safe level of
NPL (gross) at a 3.8% (as of December 2009 data), and as economic actors gain more confidence in the economic outlook, bank loan growth were recorded at about 10.6% (yoy).
By the end of Q4-2009, Indonesia's overall balance of payments recorded a surplus of US$4.0 billion larger than a
surplus of US$3.5 billion in the preceding quarter, resulted from surpluses in both the current account as well as the capital and financial account.
International reserves reached to USD 69.7 billion as of end of February 2010, equivalent to about 5.7 months of imports and official external debt payment.
In 2009, Rupiah has been showing an appreciation trend, mainly supported by continuing of global economic recovery
and positive economic performance which outperformed regional economy. Rupiah strengthened from IDR 10,950 against USD as on December 31, 2008 to IDR 9,400 against USD as on December 31, 2009, representing 16.5% appreciation. Continue in 2010, Rupiah strengthened at the level of IDR 9,335 against USD as of end of February.
Executive Summary
Monetary relaxation during 2009 has provided ample support for the economic recovery and bank intermediation
processes. At the latest Board of Governors Meeting convened in March 2010, The BI ratedecided to be kept at
6.50% after concluding the present level of the BI Rate is consistent with achievement of the 2010 inflation target, set at 5%±1%. In the balance of risk, the probability of renewed inflationary pressure is low, at least during the first half of 2010. The BI Rate is also seen as favorable to boost economic recovery, maintain financial system stability and
promote the banking intermediation function.
The Indonesian economy in 2009 has charted remarkably low inflation. In 2009, the Consumer Price Index (CPI)
recorded annual inflation at 2.8% (yoy). Inflationary pressure eased in February 2010 in line with the drop in
inflationary pressure from volatile foods (led by rice), minimum inflation from administered prices and modest inflation expectations. In February 2010, monthly inflation arrived at 0,3% (mtm) or 3,81% (yoy). However, we are confident Inflation in 2010 will stay within the target range of 5%±1%.
With the fiscal deficit target of 1.6% of GDP in 2010, Government continues to maintain the balancing act to support
the recovery and to anticipate the global growth momentum going forward by improving public infrastructure and energy. In the medium term, fiscal policy is directed toward maintaining fiscal consolidation while at the same time sustaining fiscal stimulus. We expect to see fiscal deficit move on a downward trend. On the revenue side, tax ratio is expected to pick up.
Indonesia Story: as Acknowledged by Rating Agencies
Despite of the global crisis, the Republic continued to receive good review from Rating agencies:
Moody’sInvestors Service (September 16, 2009): upgradedIndonesia’sforeign and local-currency sovereign debt ratingsto Ba2 with stable outlook. The upgrade was prompted by the Indonesian economy’s relatively strong resilience to the global recession as well as its healthy medium-term growth prospects.
S & P (March 12, 2010): upgradedIndonesia’slong-term foreign currency rating to BB from BB- with positive outlookwhich indicates that Indonesia has big possibility to be upgraded in one year. The main factor supporting this decision is steadily improving debt metrics and growing foreign currency reserves which reduced vulnerability to shock with continued cautious fiscal management.
Fitch Ratings upgraded the Republic of Indonesia’s sovereign rating in January 25, 2010 to ‘BB+’from ‘BB’ with stable outlook. The rating action reflects Indonesia’s relative resilience to the severe global financial stress test of 2008-2009 which has been underpinned by continued improvements in thecountry’spublic finances.
CCC-CCC+ B BB-BB+ BBB SD/DDD R/C CC CCC B-B+ BB BBB-Ca Caa2 B3 B1 Ba2 Baa3 Baa1 BBB+ C Caa3 Caa1 B2 Ba3 Ba1 Baa2 Economic Crisis in 1998 Banks Recapitalization Continuous fiscal
adjustment, improving liquidity and structural improvements in real
economy
Sound record of fiscal management on the success of Government efforts to improve
the investment climate
Current Ratings:
Moody’s: Ba2
S&P: BB Fitch BB+
Diminished likelihood that the Government will seek additional
debt rescheduling
Gradually improving external liquidity, macroeconomic stability and improved political
conditions Jan 10: Fitch upgrades to BB+ (stable outlook)
Sep 09: Moody’s upgrade to Ba2 (stable
outlook)
Mar 10: S&P upgrade to BB (positive outlook)
Indonesia Development Policy is based on a ‘Triple Track Strategy’
1st
Pro-Growth:
Increase Growth by prioritizing export and investment
2nd
Pro-Job :
Boost up the real sector in order to create jobs
3rd
Pro-Poor:
Revitalize agriculture, forestry, maritime, and rural economy
to reduce poverty
Real Sector: Indonesia Development Policy
Fiscal Policy Overview 2009 and 2010
Fiscal Policy framework for 2009 and 2010
Fiscal Stimulus Policies:
Continue an effective fiscal stimulus
Actual fiscal deficit 1.6% of GDP, lower than the 2.4% of GDP target deficit projected in 2009 Revised Budget
Target fiscal deficit 1.6% of GDP in 2010 Budget
Reduce Public debt to GDP ratio: 29.6% as of September 2009Maintain Social Welfare
Continue welfare programs and provide budget for education sector Tax and Administrative Reforms:
Continue tax policy and administration reform
Simplify tax regulations and broaden tax base for taxpayers8
Fiscal Policy for 2010 to Promote Economic Recovery
Energy incentive
Fiscal Policy for 2010 to Enhance Indonesia’s Competitiveness
Economic Growth Sustained
(*): Preliminary
Source: Ministry of Finance, BPS.
Sustainable Economic Growth
During 2007 - 2008, the economy performed steadily at 6,2% on average, which was the highest GDP growth after Asian crisis. However, in Q4-2008, Indonesia’s economic performance began to moderate as an impact of the global economic downturn.
Furthermore, GDP growth in Q1-2009 and Q2-2009 slid to 4,5% and 4,1% (yoy). The softening GDP growth was largely the result of plunging export, commensurate with the deterioration in global economic condition. Despite this, economic activity fuelled by the national election activities has been able to keep domestic economy from further decline.
Entering the Q3-2009, global economic development showed a sign of improvement, faster than expected. Household consumption remains strong, primarily supported by maintained household confidence to domestic economic performance. As a result, the Indonesian economy in Q3-2009 charted a 4,2% growth (yoy) and will continue to trend upward.
GDP in Q4-2009 showed a significant improvement charted a 5.4% growth (yoy). and as the result, Indonesia’s economic growth for the whole 2009 reached 4,5% (yoy), better than expected. The major improvement was a result from increased exports, investment, and government consumption. Going forward in 2010, the Indonesian economy is forecasted to grow in the range of 5.0%-5.5%, with growth in 2011 climbing to 6.0%-6.5%. This
improving growth trend is predicted alongside recovery in the world economy, strong domestic demand, and improvement in financial and banking sector.
The growth is quite strong compared globally.
9 Source: Bank Indonesia.
0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0
2006 2007 2008* 2009*
5.5
6.3
6.0
Sound Banking Sector
Protected by prudential guidelines and conservative practices, the Banking Sector has weathered the global financial turmoil and posted good performance : strong solvency, contained risk exposure and profitability
The industry’s resilience and maintained positive performance is owed to prudent measures and policies:
Banks kept away from trouble and remained free from toxic assets
Banks were not dependent on international funding
Enhanced risk-based supervision & risk management, including licensing for Structured Products
Swap has been extended from 7 days to 1 month
Bank Indonesia renewed provision of short-term liquidity facility to provide access for all banks in the event of severe liquidity constraints. Collateral requirements are also extended. The new policies allow banks to also include performing loans as collaterals from previously only high qualitySufficient CAR (%) Declining NPLs (%)
10
21.3%
19.3%
16.8% 17.4%
2006 2007 2008 Dec-09
Average CAR (%)
3.60%
1.90%
1.50%
0.90%
2006 2007 2008 Dec-09
Net NPL(%)
11 11
Balance of Payments Q4-2009
Balance of Payments
Indonesia's balance of payments in Q4/2009 posted a surplus of US$4.0 billion, up from a surplus of US$3.5 billion in Q3/2009. This surplus is encouraged by the performance of both the current account and the capital and financial account. In response, international reserves at the end of Q4-2009 mounted to US$66.1 billion, equivalent to 6.5 months of imports and official external debt service payments.
12
Flexible monetary policy to support growth objectives
Source: Bank Indonesia, BPS.
The monetary relaxation during 2009 with BI Rate lowered 300 bps to 6.50% has provided ample support for the economic recovery and bank intermediation processes.
In regard to prices, the Indonesian economy in 2009 has charted remarkably low inflation. In 2009, the Consumer Price Index (CPI) recorded annual inflation at 2.78% (yoy)., the lowest inflation in ten years
Inflationary pressure has eased in response to the government decision to lower fuel price at the beginning of the year, external factors of lower trading partner inflation, appreciation in the exchange rate and softening public expectations of inflation.
The monetary policy stance is directed towards maintaining consistently low inflation while making adequate provision for measures to strengthen economic recovery.The monetary relaxation has offered ample support for the economic recovery and bank intermediation process
0 5 10 15 20
2006 2007 2008 2009 BI Rate (%) Inflation (%y-o-y)
-5 0 5 10 15 20
Food Processed Food
Housing Clothing Health Education Transp. & Comm.
%
2006 2007 2008 2009
Inflation in 2009 came to 2.78% (yoy), fell below the inflation target and the lowest inflation in 10 years. The low inflation was closely linked to external demand and a series of policy actions instituted by the government. The steep global economic contraction sent world commodity prices tumbling in 2009, a development that also slowed activity in the domestic economy As global economic growth is expected to pick up, international commodity prices will follow suits accordingly, raising imported
inflation. From domestic side, in addition to administered price, inflationary pressure will also come from higher demand along with higher economic growth. Those conditions will increase people expectation on inflation. With that, inflation is estimated to return to its normal path of 5 1% in 2010.
In February 2010 inflationary pressure eased in line with the drop in inflationary pressure from volatile foods (led by rice), minimum inflation from administered prices and modest inflation expectations. Inflation in February 2010 was recorded at 0.30% (mtm), or in annual terms at 3.81% (yoy).
Inflation
CPI Inflation
13 Source: Bank Indonesia
0.30 5.27 6.71 9.17 3.81 -5 0 5 10 15 20 Ja n F e b M a r A p r M a y Ju n Ju l A u g S e p O ct N o v D e c Ja n F e b M a r A p r M a y Ju n Ju l A u g S e p O ct N o v D e c Ja n F e b M a r A p r M a y Ju n Ju l A u g S e p O ct N o v D e c Ja n F e b M a r A p r M a y Ju n e Ju ly A u g S e p O k t N o v D e s Ja n F e b
2006 2007 2008 2009 2010
IDR is expected to be stable
In February 2010, the Rupiah appreciated on the increasing of investor’s risk appetite due to the improvement of global economicrecovery. The Rupiah’s gain was being driven by the positive regional sentiment as Asia leading growth in global recovery
particularly well maintained domestic economic fundamentals.
Investors’ preference to hold Rupiah assets was also supported by better economic growth in 2009 which is higher than otherregional economy.
Foreign investors purchased Rupiah assets such as SBI, government bonds (SUN) and stocks. The increase of Rupiah assets holdings was driven by an attractive yieldof Indonesia’s assets.
Rupiah strengthened from IDR 9,404 per USD as on December 31,2009 to IDR 9,335 per USD in February 2010. Rupiah expected to be stable along with favorable economic condition.Rupiah Exchange Rate –Against USD Exchange Rate Movement –Indonesia Compared to Regional
15
In 2010, the Indonesian economy is positioned to grow higher
GDP Growth
is forecasted at about 5.5%-6.0%
Better exports performance along with global economic recovery and rising commodity prices
Strong household consumption growth on the back of strong consumer confidence and increasing income from exports revenue
Responding to strong demand from domestic and external, investment is also expected to pick up
2010 Forecast Main Factors Behind The Forecast
15 Source: Bank Indonesia.
Inflation
is estimated to be on target at range of
5.0% 1%
As global economic growth is expected to pick up, international commodity prices will follow suits accordingly, raising imported inflation.
From domestic side, in addition to administered price, inflationary pressure will also come from higher demand along with higher economic growth. Those conditions will increase people expectation on inflation.
Volatile food inflation is estimated to remain low as production and distribution of food will remain favorable.
Export
is expected to chart higher growth
Global economic recovery will produce renewed acceleration in exports. The global economy is predicted to enter
an expansionary phase in 2010. Renewed momentum is predicted in the economies of Indonesia’s major trading
partners, such as China. This strengthened performance will position exports as one of the main engines of economic growth in 2010.
Indonesian exports characteristics which is based on primary commodities has also supported export growth acceleration.
Private
Consumption
will remain strong
Household consumption is forecasted to remain strong. The strengthening global economic outlook for 2010 will
Monetary Policy Stance
BI Rate
17
Since December 2008, BI has slashed BI Rate by 300 bps. The monetary relaxation has offered ample support for the economic recovery process and bank intermediation.
In the last Board of Governors' Meeting in March 2010, Bank Indonesia has decided to keep the BI Rate unchanged at
6.5%. Following an evaluation of the economy in 2009 and deliberation of the future economic outlook, The Board of Governors believes that the monetary relaxation brought about by the 300 bps decline in the BI Rate offers ample support for the economic recovery process and bank intermediation. At 6.50%, the BI Rate is also deemed consistent with achievement of the inflation target for 2010, set at 5% 1%.
Source: Bank Indonesia.
12.75%
8.00%
8.75%
6.50%
0% 2% 4% 6% 8% 10% 12% 14%
Inflation in 2010 is forecasted to return to its normal path alongside renewed strength in domestic economic activity and commodity prices. Bank Indonesia continues in monitoring global economic developments and taking the necessary measures to safeguard macroeconomic stability while maintaining a conducive climate for the economy.
To enhance the effectiveness of monetary policy transmission, BI will encourage systemically important banks (SIBs) to play significant role as market leaders in setting the deposit and credit rates. BI will also encourage banks to continue extending credit to the real sector, without abandoning prudential banking policy.
Inflation Expectation
CPI Inflation Forecasts Inflation Expectation –Consensus Forecast
18 Source: Bank Indonesia
4 .9 5 .5 0.0 2.0 4.0 6.0 8.0 10.0 12.0 Ja n -0 8 F e b -0 8 M a r-0 8 A p r-0 8 M a y -0 8 Ju n -0 8 Ju l-0 8 A u g -0 8 S e p -0 8 O c t-0 8 N o v -0 8 D e c -0 8 Ja n -0 9 F e b -0 9 M a r-0 9 A p r-0 9 M a y -0 9 Ju n -0 9 Ju l-0 9 A u g -0 9
%, yoy
Ekspektasi Inflasi - Consensus Forecast
Latest Macroeconomic Indicators
The Indonesian banking sector continues to maintain financial stability and show positive performance (as of December 2009):
Banking Stability
21 Source: Bank Indonesia
Dec-06 Dec-07 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09
Total Assets (T Rp) 1,693.5 1,986.5 2,310.6 2,352.1 2,354.3 2,388.6 2,534.1
Deposits (T Rp) 1,287.0 1,510.7 1,753.3 1,786.2 1,824.3 1857.3 1973.0
- Demand Deposits 338.0 405.5 430.0 437.0 447.1 460.4 465.9
- Savings 333.9 438.5 498.6 492.5 515.0 536.2 605.4
- Time Deposits 615.1 666.7 824.7 856.7 862.1 860.7 901.7
Earning Assets (T Rp) 1,556.2 2,794.0 3,478.6 3,520.4 3,567.0 3607.3 3823.0
- Loans (incl. channeling) 832.9 1,045.7 1,353.6 1,342.1 1,368.9 1399.9 1470.8 - Loans (excl. channeling) (T Rp) 792.2 1,002.0 1,307.7 1,305.4 1,335.4 1366.1 1437.9
- BI Certificates 179.0 203.9 166.5 208.1 204.2 182.4 212.1
- Overnight Placements at BI 38.6 46.8 71.9 46.8 58.6 44.8 84.4
- Securities 342.9 350.2 358.5 374.0 363.3 351.7 346.2
- Interbank Placements 156.8 139.8 213.8 236.9 229.5 252.9 261.5
- Equity Placements 5.9 5.6 6.6 7.0 7.0 9.6 10.0
Net Interest Income--Cummulated (T Rp) 83.1 96.4 113.1 31.4 63.5 94.6 129.3 Capital Adequacy Ratio (%) 20.5 19.3 16.2 17.4 17.0 17.7 17.4 Loans/Earning Assets (%) 53.5 37.4 38.9 38.1 38.4 38.8 38.5 Gross NPL (incl. channeling) (%) 7.0 4.6 3.8 4.5 4.5 4.3 3.8 Gross NPL (excl. channeling) (%) 6.1 4.1 3.2 3.9 3.9 3.8 3.3 Net NPL (incl. channeling) (%) 3.6 1.9 1.5 1.9 1.7 1.3 0.9 Net NPL (excl. channeling) (%) 2.5 1.2 0.8 1.2 1.0 0.7 0.3
Return on Assets (%) 2.6 2.8 2.3 2.8 2.7 2.6 2.6
Net Interest Margin (%) 0.5 0.3 0.3 0.4 0.3 0.3 0.3 Ops Expense to Ops Income (%) 86.4 78.8 84.1 82.3 82.2 82.0 81.6 Loan to Deposit Ratio (%) 64.7 69.2 77.2 75.1 75.0 75.4 74.5
No. of banks 130 130 124 123 122 121 121
No. of bank office network 9,110 9,680 10,936 12,039 12,556 12,652 12,971
With prudential and governance principles in place, the Indonesian banking system has fairly insulated itself from the adverse impacts of global financial meltdown and has been able to weather the global crisis
Prudential and governance principles have prevented banks from:
having exposures in equity markets
investing in real estate and property markets
engaging in other speculative transactions, including sub-prime lending and investing in US sub-prime
mortgage securities
Banks have exercised prudence and stronger governance. As a result, banks in general maintain:
High CAR
Low NPL
There is still much room for increased credit growth
The Indonesian Banking sector: Weathering the Global Crisis
Prudential Measures To Mitigate Instability
23 Source: Bank Indonesia
Statutory reserve has been adjusted to mitigate systemic liquidity risk. Banks are required to maintain statutory and secondary reserves. Statutory reserves have been lowered to 5.0% for domestic currency (Indonesian Rupiah) plus 2.5% secondary reserves must be pledged in the form of SBI (BI Certificate) and Government Bonds;
Statutory reserves for foreign currency are lowered to 1% (previously 3%). Banks have to meet statutory reserve requirements by October 24, 2009 to allow sufficient time for portfolio adjustments;
Swap has been extended from 7 days to 1 month;
Banks may request foreign exchange to meet their customers’ need against underlying transactions. This allows smooth demand for foreign currencies in the domestic market;
Bank Indonesia renewed provision of short-term liquidity facility to provide access for all bank in severe liquidity constraints. Collateral requirements are also extended. The new policies allow banks to also include performing loans as collaterals from previously only high quality securities;
Bank Indonesia may provide emergency liquidity financing to prevent systemic crisis; Structured products are subject to license from Bank Indonesia;
Regulation to enhance quality of risk management has been launched in July 2009. Banks are required to have enhanced risk management processes in 8 risk areas.
24
• In the international level, Indonesia is a member of G-20;
• G-20 has 50 action plans as prompt corrective measures to restore global financial system stability;
• Indonesia has been a member of Financial Stability Board (FSB) and Basel Committee on Banking Supervision (BCBS) since April 2009:
• In the FSB, Indonesia is member of Standing Committee of Supervisory and Regulatory Cooperation (SC SRC);
• Indonesia is also a member of Working Group on Cross Border Crisis Management (WG CBCM);
• The FSB has important initiatives for international co-operation in financial stability, cross-border crisis management, supervisory college, and early warning exercise;
• FSB will have greater role and an agency drafting the global standards for financial system stability maintenance
• BCBS has initiatives to enhance banking regulatory framework including Basel II and international accounting standards
Enhanced International Collaboration
26
Balance of Payments Q4
–
2009
Indonesia’s Balance of Payments (BOP) in Q4-2009 registered a surplus of US$4.0 billion, larger than a surplus of US$3.5 billion in the preceding quarter. Both current account and capital and financial account positively contributed to this surplus. In line with this surplus, the official reserves increase from US$62.3 billion at end of September 2009 to US$66.1 billion (equivalent to 6.5 months of imports and official external debt service payments) at end of December 2009.
The current account in Q4-2009 recorded a more robust US$3.4 billion surplus compared to US$2.2 billion in
Q3-2009. This improvement was
explained mainly by buoyant exports driven by the ongoing recovery in the global economy and rising prices of some main export commodities.
27
Balance of Payments Q4
–
2009
Trade Balance: Non-Oil & Gas
Surplus on non-oil and gas trade balance increased in Q4-2009 to US$8.4 billion (Q3-2009: US$6.6 billion surplus). The resurgent export performance was still dominated by
resource-based commodities
requiring comparatively little
imported raw materials, a trend that has kept imports from rising as quickly as exports.
After recording negative growth
since Q1-2009 (yoy), the non-oil and gas exports in Q4-2009 charted a positive growth of 17.6% (Q32009: -11.1%). Meanwhile, the non-oil and gas import posted a smaller negative
growth in Q4-2009 (-8.4%) as
28
Balance of Payments Q4
–
2009
Trade Balance: Oil & Gas
The oil & gas trade balance posted a larger surplus as oil trade balance deficit decreased and gas trade balance raised.
The oil trade balance deficit decreased in line with imports drop following a seasonal decrease in fuel consumption after Idul Fitri festivities and exports increase on the back of further production of Cepu field and higher oil price.
In the meantime, the gas trade
balance surplus was larger than Q3-2009 surplus. Gas exports were bolstered by increased volume of LNG exports with Trains 1 and 2 of
Tangguh LNG plant entering
29
Balance of Payments Q4
–
2009
• The services account deficit
was larger than the deficit in
Q3-2009 primarily due to
increase in net outflows of
transportation and other
business services.
• The deficit on income
account was larger due to
increased profit transfer by direct investment enterprises
and increase payments of
other investment interest.
• The surplus on current
transfers was slightly
increase mainly accounted for
by increase in general
government receipt of current transfers.
30
Balance of Payments Q4
–
2009
The financial account posted a US$1.4 billion surplus primarily resulted from surplus on direct investment and portfolio investment. Although pressures on international financial markets prompted a drop in foreign investor risk appetite and hence triggered outflow of capital in
certain instrument in December
2009, the overall portfolio
investment surplus still improved in Q4/2009 compared to one quarter earlier.
The positive condition of the
financial account was attributable to
stable domestic macroeconomic
conditions and improving global
liquidity.
31
Balance of Payments Q4
–
2009
Financial Account: Foreign Direct Investment
Foreign Direct Investment (FDI) in Q4-2009 posted a net
inflows of US$962
million, slightly lower than US$987 billion net inflows in
Q3-2009. This condition was
more accounted for by an
increased outflow in oil & gas sector related to cost recovery
to foreign contractors.
Meanwhile, in line with positive growth of investment (gross
fixed capital formation) in
GDP, FDI inflows in non-oil and
gas sector increased. FDI
inflows in this sector were still
concentrate in manufacturing
32
Balance of Payments Q4
–
2009
Financial Account: Foreign Portfolio Investment
Although pressures on
international financial markets prompted a drop in foreign investor risk appetite and hence triggered outflow of capital from
selling of Bank Indonesia
Certificate (SBI) in December 2009,
the overall portfolio investment surplus still
improved in Q4-2009
compared to one quarter earlier.
Also contributed to this
improvement was the direct
issuance of corporate bond in global market such as one
conducted by PT Adaro
33
Balance of Payments for Q4
–
2009
Financial Account: Foreign Other Investment
Foreign other investment reached a US$0.8 billion surplus of in Q4-2009 compared to a surplus of US$5.4 billion in Q3-2009. During this period, foreign
loan disbursement of
domestic banks decreased while repayments of other
private enterprises
35
Fiscal Policy to Support Economic Recovery
Fiscal policy will be aimed at stimulating economic recovery by providing tax incentives to various sectors and
businesses, at promoting private consumption and investment spending, at supporting infrastructure development and enhancing social welfare through specific incentives
Provide tax incentive on imports (both income tax and VAT on imports) for the oil and gas exploration sectorEnergy Incentives
Reduce income tax rate for corporate from 28% to 25% and personal income tax rate by 5%
Reduce income tax rate for listed companies with 40% public ownership
Provide income tax facilities for businesses in specific industries or areas
Free VAT for primary agriculture products
Eliminate many luxury tax itemsIncentives on General Taxation
Fiscal Policy for 2010 to Promote Economic Recovery
Guarantee for 10,000 MW electricity program and IPP
Creation of a Land Working Group
IDR 4.9 trillion have been allocated for land capping for 28 toll roads in addition to Rp600 billion Land Acquisition Revolving Fund and Fund covering 23 projects, lending to investors procuring land
Adoption of a Land Freezing policyInfrastructure Development and Social Welfare
Fiscal Policy for 2010 to Enhance Indonesia’s Competitiveness
36
Budget Deficit / GDP
* Realized budget
Public Finances is a fundamental strength of the Indonesian economy; most of Indonesian ratios are strong or stronger than its peers; Fiscal Budget deficit has traditionally been limited and remained contained in 2009. Fiscal Stimulus did not impact much on fiscal deficit in 2009
Budget Deficit / GDP (%) Budget Deficit / GDP 2009* vs. Emerging Markets Countries
(0,1%) (1,6%) (1,3%) (0.9%) (1,8%) (1,6%) (1,4%) (1,2%) (1,0%) (0,8%) (0,6%) (0,4%) (0,2%) 0,0%
2006 2007 2008 2009*
(3 ,2 % ) (3 ,7 % ) (3 ,8 % ) (5 ,7 % ) (6 ,3 % ) (7 ,7 % ) (8 ,0 % ) (9 ,1 % ) (3 ,0 % ) (1 ,6 % ) (12,0%) (10,0%) (8,0%) (6,0%) (4,0%) (2,0%) 0,0% In do ne si a C ol om bi a B ra zi l P hi lip pi ne s C hi na Th ai la nd Tu rk ey R us si a In di a V ie tn am
State Budget 2009 - 2010
Assumptions:
Growth: 2009: 4,3% and 2010; 5.5% inflation 5% (2009) and 5% (2010) Oil price: $61/b (2009) and $65/b (2010)
Budget deficit (2009) 2,5% GDP and (2010) 1.6% GDP Tax to GDP increase from 12.1% (2009) to 12.5% (2010)
Ministries Spending and Regional Transfer, each accounted for app 35% Energy Subsidies and interest payment app 20%
37 Source: Ministry of Finance.
2009 State Budget
38 Source: Ministry of Finance.
Rev Budget Realization *)
% to Rev
budget % to GDP
A. Revenues and Grants 871.0 866.8 99.5 16.2
I. Domestic Revenue 870.0 865.7 99.5 16.2
1. Tax revenue 652.0 641.2 98.3 12.0
- Stimulus 56.3 45.8 81.3 0.9
2. Non Tax revenue 218.0 224.5 103.0 4.2
II. Grants 1.0 1.1 110.5 0.0
B. Expenditure 1,000.8 954.0 95.3 17.9
I. State Expenditure 691.5 645.4 93.3 12.1
A. Expenditure Ministries/Agencies 314.7 301.6 95.8 5.7
- Stimulus 12.2 10.2 83.2 0.2
B. Expenditure Non Ministries/Agencie 376.8 343.9 91.3 6.4
eg: Subsidi 158.1 159.5 100.9 3.0
- Stimulus (Fuel and Electric) 4.2 4.2 100.0 0.1
II. Transfer to region 309.3 308.6 99.8 5.8
0.0
D. Overall Balances (129.8) (87.2) 67.2 -1.6
% deficit to GDP (2.4) (1.6)
E. Financing 129.8 125.2 96.4 2.3
I. Domestic Financing 142.6 142.6 100.0 2.7
II. Foreign Financing (12.7) (17.4) 136.7 -0.3
ITEMS
State Budget (Revised 2009 and 2010) - Revenue
State Budget 2009 - Expenditures
State Budget 2009 - Overall Balance
2010 Budget Deficit is proposed at 1.6%; taking into account the confidence in sustainability of government’s financing resources ability
32 33 35 39 47 57 61 67 77 89 85 30 0 1000 2000 3000 4000 5000 6000 7000
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009* 2010*
Triillion Rp 0 10 20 30 40 50 60 70 80 90 100 %
GDP Outstanding Debt Debt ratio to GDP
Main financing resources for 2010 financing deficit Rp98 T (US$9.8 bio)
Government bond issuances, net Rp104,4 T (US$ 10.4 bio)
Various tenors (long and short term)
Diversified Instruments (Sukuk, conventional, GMTN, direct buying, retail, non-tradable bonds)
External debt, gross Rp57,6 T (US$ 5.7 bio)
Program loans (from World Bank, ADB, IDB, Japan & France)
Project loans, particularly for multi-year activity
Contingencies' Loan from World Bank, ADB, Japan Samurai and Australia provide a market confident
Budget Deficit 2010
42 Source: Ministry of Finance.
43
State Budget 2009 and 2010 Overview
Budget 2009 and 2010 (In Trillion of IDR)
The realized target budget deficit in 2009 was is manageable at Rp.87.2 billion or 1.6% of GDP, substantially below the revised target 2009 budget deficit of 2.4% of GDP. Budget deficit in 2010 is projected at Rp.98 billion or 1.6% of GDP
Realized 2009 (Preliminary) Budget 2010
A. Revenue and Grant 866.8 949.7
1. Tax 641.2 742.7
-Income Tax 317.6 351.0
-VAT 214.3 269.5
-Excises 56.7 57.3
-Import duties 18.1 19.6
2. Non tax revenue 224.5 205.4
B. Expenditure 954.0 1,047.7
I. Central Government 645.4 725.2
-Energy Subsidies 94.5 106.5
II. Transfer to Region 308.6 322.4
C. Surplus/(Deficit) Budget (A -B) (87.2) (98.0)
% GDP (1.6) (1.6)
D. Financing 125.2 98.0
45
Financing Strategy for the 2010 Budget Deficit
Financing Strategy
Main financing sources for 2010 financing deficit of IDR98 T (US$9.8bn)
Government bond issuances, net IDR104.4 T
Various tenors (long and short term)
Diversified Instruments(Sukuk, conventional, GMTN, direct buying, retail, non-tradable bonds)
External loans, gross IDR57.6 T (US$5.7bn)
Program loans, among others from WorldBank, ADB, IDB, Japan & France
Project loans, particularly for multi-year activity
US$5.1bn remaining of the Contingency Facility from World Bank, ADB, Japan, Australia to provide market confidenceFinancing Needs
Item
2010
Budget (IDR T)
Deficit (98.0)
Financing:
ATotal domestic financing 107.9
Government Securities 104.4
BTotal Foreign financing (9.9)
Program Loan 24.4
Project Loan 33.2
Total gross drawing 57.6
On-lending to SOEs and local governments
(8.6)
Amortizations (58.8)
Total financing 98.0
State Budget Financing 2010
in trillion IDR
2010- Budget % of GDP
Total Revenue & Grants 949.7 15.7%
of which Tax Revenue 742.7 12.3%
Non Tax Revenue 207.0 3.4%
Expenditure 1,047.7 17.3%
of which Interest payment 115.6 1.9%
Domestic 77.4 1.3%
Foreign 38.2 0.6%0.0%
Subsidy 154.9 2.6%0.0%
0.0%
Primary Balance 17.6 0.0
Overall Balance (deficit) (98.0) -1.6%
Financing 98.0 1.6%0.0%
Non Debt 2.4 0.0%
Debt 95.6 1.6%0.0%
Govt Securities (Net) 104.4 1.7%0.0%
Domestic Official Borrowing 1.00 0.0%
External Official Borrowing (Net) (9.8) -0.2%
Disbursement 57.6 1.0%
Program Loan 24.4 0.4%
Project Loan 33.2 0.5%
On lending (8.6) -0.1%
Repayment (58.8) -1.0%
Assumptions:
GDP (trillion) 6,050.1
Growth (%) 5.5
Inflation (%) 5.0
3-mo SBI (% avg) 6.5
Rp / USD (avg) 10,000.0
Oil Price (USD/barrel) 65.0
Oil Lifting (MBCD) 0.965
Notes:
Central Government Expenditure = Total Expenditure minus Transfer to Regions Debt Service = Principal and Interest Payment
GDP 2008 projected based on numbers from BPS
* = Preliminary + = GDP Based on numbers from BPS ** = Very Preliminary ++ = GDP Based on Assumption on 2009
Revised Budget *** = Very Very Preliminary
Debt to GDP Ratio Debt Composition
Debt Figure, 2004
–
2009
Per Law Number 17/2003 concerning State Budget, stipulated that the growth of debt should not exceed Indonesia economic growth with the following key measures:
– Overall Balance (deficit) should be less than 3% of GDP, and
– Total Debt to GDP ratio should be less than 60%
47 Source: Ministry of Finance.
Notes:
^ : Preliminary ^^ : Very Preliminary ^^^ : Very Very Preliminary
50% 50% 53% 53% 48% 53%
50% 50% 47% 47% 52% 47%
0% 20% 40% 60% 80% 100%
2004 2005 2006 2007^ 2008^^ 2009^^^
Domestic Debt External Debt
57% 47% 39% 35% 33% 29% 0% 10% 20% 30% 40% 50% 60%
Debt To GDP
2004 2005* 2006** 2007*** 2008+ 2009++
GDP 2,295,826.20 2,774,281.00 3,339,480.00 3,949,321.40 4,954,028.90 5,401,640.30
Debt Outstanding (billion IDR) 1,299,504.02 1,313,294.73 1,302,158.97 1,389,415.00 1,636,740.72 1,589,780.96 - Domestic Debt (Securities) 653,032.15 658,670.86 693,117.95 737,125.54 783,855.10 836,308.91 - Foreign Debt (Loan+Securities) 646,471.87 654,623.87 609,041.02 652,289.46 852,885.62 753,472.05
Debt to GDP Ratio 56.60% 47.34% 38.99% 35.18% 33.04% 29.43%
- Domestic Debt to GDP Ratio 28.44% 23.74% 20.76% 18.66% 15.82% 15.48%
- Foreign Debt to GDP Ratio 28.16% 23.60% 18.24% 16.52% 17.22% 13.95%
End of Year
Outstanding as of December 31, 2009
Notes:
* = Preliminary ** = Very Preliminary *** = Very Very Preliminary
+ = GDP Based on numbers from BPS
++ = GDP Based on Assumption on 2009 Revised Budget
-10 20 30 40 50 60 70 80 90 100 110 120 130 140
External Debt 52.21 46.65 46.10 47.92 46.92 47.06 42.19 36.71 35.59 34.40 32.52 26.83 21.34 17.06 13.34 10.91 9.61 8.44 6.95 5.06 4.28 3.90 3.78 3.30 1.80 1.24 1.05 0.85 0.68 0.59 1.05 Domestic Debt 61.41 39.20 62.32 42.39 57.74 43.38 38.34 36.32 48.10 55.93 38.49 16.76 25.44 21.03 18.05 17.22 2.45 14.43 17.59 - 8.05 - - 126.7 - 15.04 - 20.50 24.71 - -
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040
Promissory Notes to BI
Total Debt Maturity Profile
Notes:
• Preliminary, as of December 31, 2009
• Excluding amortization of Non Tradable Securities (SUN-002, SU-004, and SU-007)
62 61 59 64 69 69 63 62 62 67 65
71 68
64
73 77 71 71 82 85 83
104
-20 40 60 80 100 120 140 160 180
1999 2000 2001 2002 2003 2004 2005 2006 2007+ 2008++ Dec'09+++
Loan Government Securities
[Billion USD ]
Outstanding of Total Central Government Debt
+ Preliminary numbers ++ Very preliminary numbers
+++ Very very preliminary numbers, as of December, 2009
Year 1999 2000 2001 2002 2003 2004 2005 2006 2007+ 2008++ Dec'09+++
Loan 47% 47% 48% 47% 47% 49% 47% 43% 42% 45% 38%
Government Securities 53% 53% 52% 53% 53% 51% 53% 57% 58% 55% 62%
Total Central Government Debt 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
Holders of Tradable Domestic Government Securities Developments in the Domestic Market
Source: Ministry of Finance
Yearly issuance schedule publicly available
Established primary dealership infrastructure
Established benchmark series
Active communication with market participants
Variety of domestic securities available
– T-Bills, fixed rate, floating rate, variable rate, zero coupon, retail bonds and Sukuk (1)
Holders of Tradable Government Securities
There is an increasing proportion of foreign and non-bank holders of Indonesian Government securities.
51
72.02% 75.07%
66.07%
59.34%
53.60%
43.72% 42.62% 42.48% 25.29% 17.15%
20.82%
24.30%
29.74%
37.71% 37.89% 37.92%
2.69%
7.78%
13.12%
16.36% 16.66% 18.56% 19.49%
19.61%
0% 20% 40% 60% 80% 100%
Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Jan-10 February 2, 2010
REPUBLIC OF INDONESIA
Recent Economic Developments
Table of Contents (Annexes)
I. Indonesian Debt Profile
II. Infrastructure Development
The Government’s funding plans are well on
-track with realized financing at
18.55
% of gross issuance
required in the 2010 Budget
Issuance in the domestic market will be prioritized
Issuance of a variety of domestic government securities
– Fixed-rate
– Variable rate
– T-Bills
– Zero coupon
– Retail bonds
– Syariah securities – Sukuk and Retail Sukuk
International bonds
• Indo GMTN
• Samurai Bond
Source: Ministry of Finance
1. Redemption and buyback amount subject to change 2. GDS stands for Government Debt Securities (SUN)
2010 Funding Strategy on Track
Net Issuance Realization as of February 2, 2010
2010 Issuance Program IDR tr
2010 Budget
Government Securities Net Financing: 104.4
Redemption + Buyback (1) (70.54)
Net Realization (February 2, 2010) 26.95
Gross Issuance: 32.45
Coupon GDS (2) 10.8
Retail bonds
-Retail Sukuk
-Zero coupon GDS (2) 2.15
T’bill for Local Govt
-Domestic Sukuk 0.95
International Sukuk
International bonds 18.55
Redemption + Buyback (5.5)
Domestic Issuance
Until February 2, 2010 the Government has issued government securities domestically amounting to IDR13,900,000,000,000.00
in IDR Million
Auction Date Series Settlement
Date Maturity Coupon WAY/WAP Target Total Bids Total Accepted
Bids to Accepted
Total 2006 26,875,000 98,850,550 42,578,650 2.32
Total 2007 47,000,000 205,057,495 86,379,695 2.37
Total 2008 54,000,000 150,413,440 82,232,640 1.83
Total 2009 64,190,000 216,620,120 97,756,020 2.22
12-Jan-10 SPN20110113 13-Jan-11 - 6.81% 3,805,000 1,100,000 3.46
FR0027 15-Jun-15 9.50% 8.19% 3,781,000 1,450,000 2.61
FR0028 15-Jul-17 10.00% 8.68% 4,222,000 2,700,000 1.56
FR0052 15-Aug-30 10.50% 10.55% 3,067,700 2,250,000 1.36
5,000,000 14,875,700 7,500,000 1.98
19-Jan-10 IFR0003 15-Sep-15 9.25% 8.70% 313,000 55,000 5.69
IFR0005 15-Jan-17 9.00% 9.20% 178,000 105,000 1.70
IFR0006 - - - 116,000 -
-IFR0007 15-Jan-25 10.25% 10.52% 1,261,000 790,000 1.60
1,000,000 1,868,000 950,000 1.97
26-Jan-10 SPN20110113 13-Jan-11 - 6.86% 2,295,000 1,050,000 2.19
FR0031 15-Nov-20 11.00% 9.76% 4,163,000 1,900,000 2.19
FR0040 15-Sep-25 11.00% 10.50% 2,866,000 1,050,000 2.73
FR0050 15-Jul-38 10.50% 10.87% 1,552,000 1,450,000 1.07
5,000,000 10,876,000 5,450,000 2.00
28-Jan-10 5,000,000
14-Jan-10 5,000,000
1,000,000 21-Jan-10
Note: IFR: Islamic Fixed Rate (Sukuk)
International Issuance (Global Bond 2010)
By Region
INDO-20 GMTN
1 Rating (S&P I Moody's I Fitch) BB- I Ba2 I BB
2 Size USD 2,000,000,000
3 Coupon 5.875%
4 Pricing Date January 12, 2010
5 Settlement Date January 19, 2010
6 Maturity Date March 13, 2020
7 Issue Format Rule 144A/Reg S
8 Yield when Issued 6.00%
9 Price when Issued 99.044%
10 Spread over US Treasury 227.9 bps
11 US Treasury Yield 3.721%
Europe , 27% USA,
49%
Asia, 24% Retails, 6%
Banks, 14%
Asset Managers,
69% Insurance
& others, 11% By Investors Type By Region
Samurai Bond
1
Size
JPY 35,000,000,000
2
Coupon
2.730%
3
Pricing Date
July 17, 2009
4
Settlement Date
July 29, 2009
5
Maturity Date
July 29, 2019
6
Issue Format
Private Placement
The government decided to issue Samurai Bonds amounting to JPY35 billion under Private Placement to Qualified Institutional Investor, including Insurance and other Financial Company in Japan.
Samurai Bond Issuance 2009
0 20 40 60
trill
ion r
upia
h
Total 55.91 41.35 53.78 42.39 59.90 44.85 38.31 39.09 48.04 55.93 59.13 16.76 25.44 21.03 18.05 19.06 2.45 14.43 17.59 - 8.05 - 14.99 - 20.46 26.10 743.11 SR - - 5.56 - - - - - - - - - - - - - - - - - - - - - - - 5.56 IFR - - - 0.55 - 3.50 - 0.11 1.99 - - - - - - 0.79 - - - - - - - - - - 6.93 ZC 5.89 - 1.44 1.36 - - - - - - - - - - - - - - - - - - - - - - 8.69 SPN 19.20 2.15 - - - - - - - - - - - - - - - - - - - - - - - - 21.35 IB - - - - 27.64 9.37 8.43 9.37 17.80 22.35 18.74 - - - - - - - - - - - 14.99 - 14.06 18.74 161.49 ORI 6.19 9.30 13.40 2.71 - - - - - - - - - - - - - - - - - - - - - - 31.61 VR - 6.50 4.39 - 13.86 17.45 18.32 16.82 17.92 22.72 25.32 - - - - - - - - - - - - - - - 143.29 FR 24.63 23.39 29.00 37.77 18.41 14.54 11.56 12.80 10.33 10.86 15.07 16.76 25.44 21.03 18.05 18.27 2.45 14.43 17.59 - 8.05 - - - 6.40 7.36 364.19
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 … 2035 2036 2037 2038
Maturity Profile of Tradable Government securities as of February 2, 2010
ZCB : Zero Coupon bond SPN : T Bills IFR : Islamic Fixed Rate Bond IB : International Bond ORI : Retail Bond SR : Retail Sukuk
VR : Variable Rate Bond FR : Fixed Rate Bond
Daily Transaction & Offshore Ownership
Diversified bondholders Ever-increasing daily transaction
Investor base is getting more diversified with the increased ownership by foreign investors. This depicts investor confidence on Indonesia.
Source: Ministry of Finance. 60 522 1,395 2,122 2,549 3,307 5,899 4,235 2,645 3,306 3,776 3,536 3,566 4,277
3,636 3,598 3,5303,473 3,819
3,018 2,631 2,960 -1,000 2,000 3,000 4,000 5,000 6,000 7,000
2002 2003 2004 2005 2006 2007 2008 Jan
'09 Feb
'09 Mar'09 Ap
r'0 9 Mei '09 Jun '09 Jul'09 Ag us t'09
Sep'09 Okt'09 No v'09
Des'09 Jan '10
up to
Feb 2' 10
-40 80 120 160 200 240 280 320 360
Volume (billion rupiah) - LHS Frequency - RHS
0 25,000 50,000 75,000 100,000 125,000 [Rp miliar]
Total 78,156 87,606 79,834 87,153 93,225 107,997 115,019 115,702
>5 52,294 61,055 55,326 62,930 69,456 76,702 82,922 83,779
2-5 17,243 20,374 18,012 18,999 17,050 21,361 20,792 20,544
0-2 8,619 6,178 6,496 5,223 6,719 9,935 11,304 11,380 Dec-07 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Jan-10 2-Feb-10
Dec-07 Dec-08 Mar-09
Banks 268.65 56.2% 258.75 49.2% 279.12 51.1% 272.15 48.96% 261.78 46.14% 255.20 44.38% 255.82 43.97% 254.36 43.72% 251.54 42.62% 250.69 42.48%
State Banks - Recap 154.67 32.4% 144.72 27.5% 154.08 28.2% 146.26 26.31% 142.27 25.08% 141.50 24.61% 143.31 24.63% 144.19 24.79% Private Banks - Recap 72.63 15.2% 61.67 11.7% 66.45 12.2% 65.26 11.74% 62.43 11.00% 59.80 10.40% 59.92 10.30% 59.98 10.31% Non Recap Banks 35.37 7.4% 45.17 8.6% 49.36 9.0% 52.83 9.50% 49.87 8.79% 46.94 8.16% 44.71 7.69% 42.40 7.29% Regional Banks 5.97 1.3% 6.50 1.2% 8.45 1.5% 7.04 1.27% 6.43 1.13% 6.05 1.05% 6.17 1.06% 6.02 1.03%
Shariah Banks - 0.0% 0.69 0.1% 0.77 0.1% 0.77 0.14% 0.79 0.14% 0.90 0.16% 1.71 0.29% 1.77 0.30% 1.82 0.31% 1.82 0.31%
Govt Institutions 14.86 3.1% 23.01 4.4% 21.32 3.9% 26.79 4.82% 23.36 4.12% 24.15 4.20% 23.97 4.12% 22.50 3.87% 22.09 3.74% 22.14 3.75%
Bank Indonesia 14.86 3.1% 23.01 4.4% 21.32 3.9% 26.79 4.82% 23.36 4.12% 24.15 4.20% 23.97 4.12% 22.50 3.87% 22.09 3.74% 22.14 3.75%
Non-Banks 194.24 40.7% 243.93 46.4% 246.22 45.0% 256.96 46.22% 282.22 49.74% 295.62 51.42% 301.97 51.91% 304.89 52.41% 316.51 53.63% 317.32 53.77%
Mutual Funds 26.33 5.5% 33.11 6.3% 35.19 6.4% 36.02 6.48% 41.17 7.26% 44.21 7.69% 44.79 7.70% 45.22 7.77% 46.96 7.96% 47.17 7.99% Insurance Company 43.47 9.1% 55.83 10.6% 60.25 11.0% 61.75 11.11% 68.15 12.01% 70.51 12.26% 72.65 12.49% 72.58 12.48% 75.68 12.82% 75.69 12.83% Foreign Holders 78.16 16.4% 87.61 16.7% 79.83 14.6% 87.15 15.68% 93.23 16.43% 101.42 17.64% 104.47 17.96% 108.00 18.56% 115.02 19.49% 115.70 19.61% Pension Fund 25.50 5.3% 32.98 6.3% 34.52 6.3% 34.38 6.18% 36.82 6.49% 37.60 6.54% 38.06 6.54% 37.50 6.45% 37.62 6.37% 37.56 6.36% Securities Company 0.28 0.1% 0.53 0.1% 0.53 0.1% 0.62 0.11% 0.72 0.13% 0.65 0.11% 0.53 0.09% 0.46 0.08% 0.51 0.09% 0.50 0.09% Others 20.50 4.3% 33.87 6.4% 35.89 6.6% 37.04 6.66% 42.13 7.43% 41.23 7.17% 41.47 7.13% 41.12 7.07% 40.73 6.90% 40.69 6.89%
Total 477.75 100.0% 525.69 100.0% 546.66 100.0% 555.91 100.00% 567.37 100.00% 574.97 100.00% 581.76 100.00% 581.75 100.00% 590.15 100% 590.15 100% 2-Feb-10 June-09 September-09 October-09 November-09 December-09 January-10
Ownership of IDR Tradable Government Securities (percentage and nominal)
Notes:
- Foreign Holders (offshore) are non-resident Private Banking, Fund/Asset Mgmt, Securities Co, Insurance, Pension Fund, etc - Others are Corporate, Individuals, Foundations, etc.
- Private Banks –Recap and Non Recap Banks include foreign banks branches and subsidiaries
IDR Government Bonds : Yield Curve (IDMA)
5.50 6.50 7.50 8.50 9.50 10.50 11.50 12.50 13.50 14.50 15.50
1Y 2Y 3Y 4Y 5Y 6Y 7Y 8Y 9Y 10Y 15Y 20Y 30Y
2 Feb '10 26 Jan '10
Dec '09 Oct '09
Aug '09 Feb '09
[in percentage]
Tenor 2-Feb-10 26-Jan-10 31-Dec-09 Oct '09 Aug '09 Feb '09
1Y 6.92 6.92 6.14 6.50 7.04 11.15 2Y 7.67 7.64 7.11 7.83 8.04 11.77 3Y 7.92 7.97 7.89 8.63 8.74 11.97 4Y 8.16 8.17 8.44 9.11 9.27 12.32 5Y 8.48 8.57 8.80 9.22 9.47 12.91 6Y 8.74 8.86 9.06 9.46 9.87 12.95 7Y 9.03 9.13 9.24 9.62 9.99 13.42 10Y 9.81 9.76 10.04 10.12 10.48 13.56 15Y 10.46 10.48 10.64 10.61 11.16 14.34 20Y 10.63 10.61 10.72 10.70 11.34 14.38 30Y 10.77 10.82 10.97 10.93 11.76 14.56
Profile of Government Debt Securities
GOVERNMENT DEBT SECURITIES (GDS) Dec '07 Mar '08 Jun '08 Sep '08 Dec '08 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 02-Feb-10
1. Zero Coupon IDR 14,669 IDR 24,219 IDR 24,273 IDR 27,280 IDR 21,503 IDR 33,003 IDR 31,673 IDR 34,263 IDR 36,263 IDR 33,501 IDR 33,475 IDR 32,186 IDR 33,386 IDR 33,386 IDR 33,386 IDR 30,036 IDR 30,036 1. Government Treasury Bills IDR 4,169 IDR 4,169 IDR 5,250 IDR 10,012 IDR 10,012 IDR 21,512 IDR 20,212 IDR 22,812 IDR 24,812 IDR 22,050 IDR 22,050 IDR 23,500 IDR 24,700 IDR 24,700 IDR 24,700 IDR 21,350 IDR 21,350 2. Zero Coupon Bond IDR 10,500 IDR 20,050 IDR 19,023 IDR 17,268 IDR 11,491 IDR 11,491 IDR 11,461 IDR 11,451 IDR 11,451 IDR 11,451 IDR 11,425 IDR 8,686 IDR 8,686 IDR 8,686 IDR 8,686 IDR 8,686 IDR 8,686
Government Domestic Bonds
1. Fixed Rate *) +) IDR 294,453 IDR 313,258 IDR 330,338 IDR 354,948 IDR 353,558 IDR 357,468 IDR 362,998 IDR 371,031 IDR 361,625 IDR 366,561 IDR 377,763 IDR 381,639 IDR 387,839 IDR 393,553 IDR 393,543 IDR 404,343 IDR 404,343 2. Variable Rate *) IDR 168,625 IDR 160,927 IDR 165,617 IDR 154,772 IDR 145,934 IDR 145,931 IDR 145,931 IDR 145,083 IDR 145,083 IDR 143,286 IDR 143,286 IDR 143,286 IDR 143,286 IDR 143,286 IDR 143,286 IDR 143,286 IDR 143,286 2. Sub Total Tradable GDS IDR 477,747 IDR 498,404 IDR 520,228 IDR 537,000 IDR 520,995 IDR 536,402 IDR 540,602 IDR 550,377 IDR 542,971 IDR 543,348 IDR 554,524 IDR 557,111 IDR 564,511 IDR 570,225 IDR 570,215 IDR 577,665 IDR 577,665
3. Promissory Notes to Bank Indonesia **) ***) IDR 259,404 IDR 258,817 IDR 258,208 IDR 258,208 IDR 258,160 IDR 257,480 IDR 256,980 IDR 256,980 IDR 253,724 IDR 253,724 IDR 252,484 IDR 252,484 IDR 252,484 IDR 252,484 IDR 251,875 IDR 251,875 IDR 251,192
4. Total GDS (2+3) IDR 737,151 IDR 757,221 IDR 778,436 IDR 795,209 IDR 779,155 IDR 793,882 IDR 797,582 IDR 807,357 IDR 796,695 IDR 797,072 IDR 807,008 IDR 809,595 IDR 816,995 IDR 822,709 IDR 822,090 IDR 829,540 IDR 828,857
5. Total Government International Bonds *) USD 7,000 USD 9,000 USD 11,200 USD 11,200 USD 11,200 USD 14,200 USD 14,200 USD 14,200 USD 14,200 USD 14,200 USD 14,200 USD 14,200 USD 14,200 USD 14,200 USD 14,200 USD 16,200 USD 16,200
35,000
¥ ¥ 35,000 ¥ 35,000 ¥ 35,000 ¥ 35,000 ¥ 35,000 ¥ 35,000 ¥ 35,000
6. TOTAL GOV'T DEBT SECURITIES (4+(5*Exchange Rate Assumption)) IDR 803,084 IDR 840,174 IDR 881,756 IDR 900,242 IDR 901,795 IDR 958,247 IDR 949,707 IDR 949,911 IDR 941,890 IDR 941,580 IDR 953,658 IDR 950,838 IDR 956,193 IDR 961,152 IDR 959,130 IDR 984,897 IDR 984,261
GOVERNMENT ISLAMIC DEBT SECURITIES (GIDS)
Government Domestic Islamic Bonds
1. Fixed Rate *)++) IDR - IDR - IDR - IDR 4,700 IDR 4,700 IDR 4,700 IDR 4,700 IDR 4,700 IDR 4,700 IDR 4,700 IDR 4,700 IDR 4,700 IDR 4,900 IDR 5,977 IDR 5,977 IDR 6,927 IDR 6,927 Government International Islamic Bonds
1. Fixed Rate *) USD 650 USD 650 USD 650 USD 650 USD 650 USD 650 USD 650 USD 650 USD 650 USD 650 USD 650 7. Total Tradable GIDS IDR - IDR - IDR - IDR 4,700 IDR 4,700 IDR 4,700 IDR 11,663 IDR 11,225 IDR 11,346 IDR 11,148 IDR 11,239 IDR 10,992 IDR 11,104 IDR 12,139 IDR 12,087 IDR 12,923 IDR 12,923
8. TOTAL GOVERNMENT SECURITIES +++) IDR 803,084 IDR 840,174 IDR 881,756 IDR 904,942 IDR 906,495 IDR 968,503 IDR 966,926 IDR 966,692 IDR 961,478 IDR 960,970 IDR 973,138 IDR 970,072 IDR 975,539 IDR 981,532 IDR 979,458 IDR 1,006,062 IDR 1,005,426
Notes:
- Nominal in billion rupiah (domestic bonds), million USD & million JPY (international bonds) - *) Tradable
- **) Non-Tradable
- +) Including ORI (IDR Billion)) IDR 18,885 IDR 32,070 IDR 34,699 IDR 34,699 IDR 34,699 IDR 34,699 IDR 34,699 IDR 34,699 IDR 34,699 IDR 40,175 IDR 40,149 IDR 40,149 IDR 40,149 IDR 40,149 IDR 40,149 IDR 40,149 - ++) Including Sukuk Ritel/SR (IDR Billion) IDR 5,556 IDR 5,556 IDR 5,556 IDR 5,556 IDR 5,556 IDR 5,556 IDR 5,556 IDR 5,556 IDR 5,556 IDR 5,556 IDR 5,556 IDR 5,556 -+++) Including Non Tradable Sukuk/ SDHI (IDR Billion) IDR 2,686 IDR 2,686 IDR 2,686 IDR 2,686 IDR 2,686 IDR 2,686 IDR 2,686 IDR 2,686 IDR 2,686
(e.o Dec 2007) (30 Jun '08) (26 Sep '08) (31 Dec '08) (31 Mar '09) (30 Apr '09) (31 May '09) (30 Jun '09) (31 Jul '09) (31 Aug '09) (30 Sep '09) (31 Oct '09) (30 Nov '09) (31 Dec '09) (3 Jan '10) (2 Feb '10)
- Exchange Rate Assumption (IDR/USD1) IDR 9,419 IDR 9,217 IDR 9,225 IDR 9,378 IDR 10,950 IDR 11,575 IDR 10,713 IDR 10,039 IDR 10,225 IDR 9,920 IDR 10,060 IDR 9,681 IDR 9,545 IDR 9,480 IDR 9,400 IDR 9,365 IDR 9,370 - Exchange Rate Assumption (IDR/JPY1) IDR 104.12 IDR 108.50 IDR 107.79 IDR 104.54 IDR 109.33 IDR 101.70 IDR 104.11 IDR 103.15
Debt Switching Program
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In 2006 GOI switched Rp31.2 trillion of bonds consist of Rp9.9 trillion which matured in 2007, Rp11.4 trillionmatured in 2008, Rp6.1 trillion matured in 2009, Rp1.5 trillion matured in 2010 and Rp2.3 trillion matured in 2011
•
In 2007 GOI switched Rp15.8 trillion bond maturing between 2007-2012 into long dated bonds maturing2022-2027
•
In 2008 GOI switched Rp4.6 trillion bond maturing between 2009-2013 into long dated bonds maturing2022-2023
•
In 2009 GOI switched Rp2.634 trillion bond maturing between 20092013 into long dated bonds maturing 2016-2024
Series Maturity Date Offer Received 1)
Offer Awarded
1) Series
Maturity
Date WAY
Total 2005 2006 - 2009 7,721 5,673 FR0031 15-Nov-20 14.46523%
Total 2006 13 Auction 54,177 31,179
Total 2007 9 Auctions 30,68
