ProdukHukum BankIndonesia
REPUBLIC OF INDONESIA
Recent Economic Developments
March, 2010
Published by Investors Relations Unit – Republic of Indonesia
Address
Tel
Facsimile
E-mail
Website
Bank Indonesia
International Directorate
Investor Relations Unit
Sjafruddin Prawiranegara Building, 5 th floor
Jalan M.H. Thamrin 2
Jakarta, 10110 Indonesia
+6221 381 8316
+6221 381 8298
+6221 350 1950
Elsya Chani: [email protected]
Dyah Miranti Wulandari: [email protected]
www.bi.go.id/iru
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.
3
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 rate decided 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.
4
Indonesia Story: as Acknowledged by Rating Agencies
Despite of the global crisis, the Republic continued to receive good review from Rating agencies:
Moody’s Investors Service (September 16, 2009): upgraded Indonesia’s foreign and local-currency sovereign debt ratings to 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): upgraded Indonesia’s long-term foreign currency rating to BB from BB- with positive outlook which 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 the country’s public finances.
BBB+
Baa1
BBB
BBB-
Economic Crisis
in 1998
BB+
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
Baa2
Baa3
Ba1
BB
Ba2
BB-
Ba3
Sep 09: Moody’s
upgrade to Ba2 (stable
outlook)
B+
B
CCC+
CCC
CCCCC
R/C
SD/DDD
B1
B2
B3
B-
5
Mar 10: S&P
upgrade to BB
(positive outlook)
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:
Caa1
Fitch
upgrades to Caa2
BB+ (stable
Caa3
outlook)
Ca
C
Positive Macroeconomic Developments
Real Sector: Indonesia Development Policy
Indonesia Development Policy is based on a ‘Triple Track Strategy’
1st
2nd
Pro-Growth:
Increase Growth by prioritizing export and investment
Pro-Job :
Boost up the real sector in order to create jobs
Pro-Poor:
3rd
7
Revitalize agriculture, forestry, maritime, and rural economy
to reduce poverty
Source: Coordinating Ministry for Economic Affairs
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 2009
Tax and Administrative Reforms:
Continue tax policy and administration reform
Simplify tax regulations and broaden tax base for taxpayers
Maintain Social Welfare
Continue welfare programs and provide budget for education sector
Fiscal Policy for 2010 to Promote Economic Recovery
Energy incentive
Fiscal Policy for 2010 to Enhance Indonesia’s Competitiveness
Infrastructure Development
8
Economic Growth Sustained
The growth is quite strong compared globally.
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.
Sustainable Economic Growth
% yoy
6.3
7.0
6.0
5.5
6.0
4.5
5.0
4.0
3.0
2.0
1.0
0.0
(*): Preliminary
Source: Ministry of Finance, BPS.
9
2006
2007
2008*
2009*
Source: Bank Indonesia.
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
Declining NPLs (%)
Sufficient CAR (%)
3.60%
21.3%
19.3%
16.8%
17.4%
1.90%
1.50%
0.90%
2006
2007
2008
Average CAR (%)
Dec-09
2006
2007
Net NPL(%)
2008
Dec-09
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 quality
10
Source: Bank Indonesia.
Balance of Payments Q4-2009
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.
Balance of Payments
11
Source: Bank Indonesia.
Flexible monetary policy to support growth objectives
The monetary relaxation has offered ample support for the economic recovery and bank intermediation process
Sources of Inflation
BI Rate and Inflation
20
%
20
15
15
10
10
5
5
0
-5
0
Food
2006
12
2007
BI Rate (%)
2008
2009
Inflation (%y-o-y)
Processed Housing Clothing Health Education Transp. &
Food
Comm.
2006
2007
2008
2009
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.
Source: Bank Indonesia, BPS.
Inflation
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).
CPI Inflation
20
Monthly (m-t-m)
Annually (y-o-y)
15
10
9.17
6.71
5.27
5
3.81
0.30
Jan
Feb
Des
Okt
Nov
Sep
July
Aug
May
June
Apr
Feb
Mar
Jan
Dec
Nov
Oct
Sep
Aug
Jul
Jun
May
Apr
Mar
Jan
Feb
Dec
Oct
Nov
Sep
Jul
Aug
Jun
Apr
May
Mar
Jan
Feb
Dec
Oct
Nov
Sep
Jul
Aug
Jun
Apr
May
Mar
Jan
Feb
0
-5
2006
13
2007
2008
2009
2010
Source: Bank Indonesia
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 economic
recovery. 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 other
regional 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 yield of 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
14
Exchange Rate Movement – Indonesia Compared to Regional
Source: Bank Indonesia.
In 2010, the Indonesian economy is positioned to grow higher
2010 Forecast
Main Factors Behind The Forecast
GDP Growth
is forecasted at about
5.5%-6.0%
Export
is expected to chart
higher growth
Private
Consumption
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
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.
Household consumption is forecasted to remain strong. The strengthening global economic outlook for 2010 will
given added momentum to Indonesia’s exports, which in turn will produce an overall increase in private incomes.
Higher investment will also contribute to rising incomes, thus paving the way for stronger public purchasing power.
will remain strong
Inflation
is estimated to be on
target at range of
5.0% 1%
15
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.
Source: Bank Indonesia.
Bank Indonesia Monetary Policy
Monetary Policy Stance
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%.
BI Rate
14%
12.75%
12%
10%
8.75%
8.00%
8%
6.50%
6%
4%
2%
0%
Sep-05
17
Jun-06
Mar-07
Dec-07
Sep-08
Jun-09
Mar-10
Source: Bank Indonesia.
Inflation Expectation
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 – Consensus Forecast
CPI Inflation Forecasts
%, yoy
Ekspektasi Inflasi - Consensus Forecast
12.0
2009
2010
10.0
4.9
6.0
5.5
8.0
4.0
2.0
Jan-08
Feb-08
Mar-08
Apr-08
May-08
Jun-08
Jul-08
Aug-08
Sep-08
Oct-08
Nov-08
Dec-08
Jan-09
Feb-09
Mar-09
Apr-09
May-09
Jun-09
Jul-09
Aug-09
0.0
18
Source: Bank Indonesia
Latest Macroeconomic Indicators
19
Source: Bank Indonesia
Bank Indonesia Banking Policy
Banking Stability
The Indonesian banking sector continues to maintain financial stability and show positive performance
(as of December 2009):
Indicator
Total Assets (T Rp)
Deposits (T Rp)
- Demand Deposits
- Savings
- Time Deposits
Earning Assets (T Rp)
- Loans (incl. channeling)
- Loans (excl. channeling) (T Rp)
- BI Certificates
- Overnight Placements at BI
- Securities
- Interbank Placements
- Equity Placements
Net Interest Income--Cummulated (T Rp)
Capital Adequacy Ratio (%)
Loans/Earning Assets (%)
Gross NPL (incl. channeling) (%)
Gross NPL (excl. channeling) (%)
Net NPL (incl. channeling) (%)
Net NPL (excl. channeling) (%)
Return on Assets (%)
Net Interest Margin (%)
Ops Expense to Ops Income (%)
Loan to Deposit Ratio (%)
No. of banks
No. of bank office network
21
Dec-06
Dec-07
Dec-08
Mar-09
Jun-09
Sep-09
Dec-09
1,693.5
1,287.0
338.0
333.9
615.1
1,556.2
832.9
792.2
179.0
38.6
342.9
156.8
5.9
83.1
20.5
53.5
7.0
6.1
3.6
2.5
2.6
0.5
86.4
64.7
130
9,110
1,986.5
1,510.7
405.5
438.5
666.7
2,794.0
1,045.7
1,002.0
203.9
46.8
350.2
139.8
5.6
96.4
19.3
37.4
4.6
4.1
1.9
1.2
2.8
0.3
78.8
69.2
130
9,680
2,310.6
1,753.3
430.0
498.6
824.7
3,478.6
1,353.6
1,307.7
166.5
71.9
358.5
213.8
6.6
113.1
16.2
38.9
3.8
3.2
1.5
0.8
2.3
0.3
84.1
77.2
124
10,936
2,352.1
1,786.2
437.0
492.5
856.7
3,520.4
1,342.1
1,305.4
208.1
46.8
374.0
236.9
7.0
31.4
17.4
38.1
4.5
3.9
1.9
1.2
2.8
0.4
82.3
75.1
123
12,039
2,354.3
1,824.3
447.1
515.0
862.1
3,567.0
1,368.9
1,335.4
204.2
58.6
363.3
229.5
7.0
63.5
17.0
38.4
4.5
3.9
1.7
1.0
2.7
0.3
82.2
75.0
122
12,556
2,388.6
1857.3
460.4
536.2
860.7
3607.3
1399.9
1366.1
182.4
44.8
351.7
252.9
9.6
94.6
17.7
38.8
4.3
3.8
1.3
0.7
2.6
0.3
82.0
75.4
121
12,652
2,534.1
1973.0
465.9
605.4
901.7
3823.0
1470.8
1437.9
212.1
84.4
346.2
261.5
10.0
129.3
17.4
38.5
3.8
3.3
0.9
0.3
2.6
0.3
81.6
74.5
121
12,971
Source: Bank Indonesia
The Indonesian Banking sector: Weathering the Global Crisis
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
22
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
Source: Bank Indonesia
Prudential Measures To Mitigate Instability
Bank Indonesia has exercised several regulatory measures to prevent banks from crisis:
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.
23
Source: Bank Indonesia
Enhanced International Collaboration
• 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
24
Source: Bank Indonesia
Balance of Payments Q4-2009
Balance of Payments Q4–2009
Overall Balance and Current Account
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.
26
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
requiring
commodities
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% (Q3-2009: 11.1%). Meanwhile, the non-oil and
gas import posted a smaller negative
growth
in
Q4-2009
(-8.4%)
compared to Q3-2009 (-24.3%).
27
as
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
operation.
28
LNG
plant
entering
Balance of Payments Q4 – 2009
Services, Income, and Current Transfers
• 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
transfers
on
was
current
slightly
increase mainly accounted for
by
increase
in
general
government receipt of current
transfers.
29
Balance of Payments Q4 – 2009
Financial Account
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
2009,
instrument
the
in
December
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
conditions
liquidity.
30
and
macroeconomic
improving
global
Balance of Payments Q4 – 2009
Financial Account: Foreign Direct Investment
Foreign
Direct
Investment
(FDI) in Q4-2009 posted a net
inflows
of
million,
slightly
US$962
lower
than
US$987 billion net inflows in
Q3-2009.
more
This condition was
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
sector.
31
in manufacturing
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
improved
in
still
Q4-2009
compared to one quarter earlier.
Also
contributed
improvement
was
to
this
the
direct
issuance of corporate bond in
global market such as one
conducted
Indonesia.
32
by
PT
Adaro
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
increased as scheduled.
33
State Budget
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
Fiscal Policy for 2010 to Promote Economic Recovery
Incentives on
General Taxation
Energy
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 items
Provide tax incentive on imports (both income tax and VAT on imports) for the oil and gas exploration
sector
Fiscal Policy for 2010 to Enhance Indonesia’s Competitiveness
Infrastructure
Development and
Social Welfare
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 policy
35
Source: Ministry of Finance
Budget Deficit / GDP
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 (%)
India
(8,0%)
Vietnam
Russia
(7,7%)
Turkey
Thailand
China
(1,4%)
(6,0%)
(1,3%)
(8,0%)
(1,6%)
(1,6%)
(1,8%)
(10,0%)
(9,1%)
(0.9%)
(6,3%)
(4,0%)
(1,0%)
(5,7%)
(0,8%)
(3,2%)
(2,0%)
(3,0%)
(0,6%)
(1,6%)
0,0%
(0,4%)
(1,2%)
(3,8%)
(0,1%)
(0,2%)
Philippines
0,0%
(3,7%)
2009*
Brazil
2008
Colombia
2007
Indonesia
2006
Budget Deficit / GDP 2009* vs. Emerging Markets Countries
(12,0%)
* Realized budget
36
Source: Ministry of Finance
State Budget 2009 - 2010
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
2009 (Realization in IDR Trillion)
ITEMS
A. Revenues and Grants
I. Domestic Revenue
1. Tax revenue
- Stimulus
2. Non Tax revenue
II. Grants
B. Expenditure
I. State Expenditure
A. Expenditure Ministries/Agencies
- Stimulus
B. Expenditure Non Ministries/Agencie
eg: Subsidi
- Stimulus (Fuel and Electric)
II. Transfer to region
D. Overall Balances
% deficit to GDP
E. Financing
I. Domestic Financing
II. Foreign Financing
38
Rev Budget
871.0
870.0
652.0
56.3
218.0
1.0
1,000.8
691.5
314.7
12.2
376.8
158.1
4.2
309.3
Realization % to Rev
% to GDP
*)
budget
866.8
865.7
641.2
45.8
224.5
1.1
954.0
645.4
301.6
10.2
343.9
159.5
4.2
308.6
99.5
99.5
98.3
81.3
103.0
110.5
95.3
93.3
95.8
83.2
91.3
100.9
100.0
99.8
(129.8)
(2.4)
(87.2)
(1.6)
67.2
16.2
16.2
12.0
0.9
4.2
0.0
17.9
12.1
5.7
0.2
6.4
3.0
0.1
5.8
0.0
-1.6
129.8
142.6
(12.7)
125.2
142.6
(17.4)
96.4
100.0
136.7
2.3
2.7
-0.3
Source: Ministry of Finance.
State Budget (Revised 2009 and 2010) - Revenue
39
Source: Ministry of Finance.
State Budget 2009 - Expenditures
40
Source: Ministry of Finance.
State Budget 2009 - Overall Balance
41
Source: Ministry of Finance.
Budget Deficit 2010
2010 Budget Deficit is proposed at 1.6%; taking into account the confidence in sustainability of government’s
financing resources ability
GDP – Outstanding Debt – Debt Ratio to GDP
Triillion Rp
7000
6000
85
89
77
5000
67
4000
61
57
47
3000
39
35
2000
33
32
30
2009*
2010*
1000
0
1999
2000
GDP
2001
2002
2003
2004
2005
Outstanding Debt
2006
2007
2008
%
100
90
80
70
60
50
40
30
20
10
0
Debt ratio to GDP
Main financing resources for 2010 financing deficit Rp98 T (US$9.8 bio)
42
Government bond issuances, net Rp104,4 T (US$ 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
Source: Ministry of Finance.
State Budget 2009 and 2010 Overview
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
Budget 2009 and 2010 (In Trillion of IDR)
Realized 2009 (Preliminary)
Budget 2010
866.8
949.7
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
224.5
205.4
954.0
1,047.7
645.4
725.2
94.5
106.5
308.6
322.4
(87.2)
(98.0)
(1.6)
(1.6)
125.2
98.0
A. Revenue and Grant
1. Tax
2. Non tax revenue
B. Expenditure
I. Central Government
-Energy Subsidies
II. Transfer to Region
C. Surplus/(Deficit) Budget (A -B)
% GDP
D. Financing
43
Source: Ministry of Finance
Debt Management and Debt Profile
Financing Strategy for the 2010 Budget Deficit
Financing Strategy
Main financing sources for 2010 financing deficit of IDR98 T
(US$9.8bn)
2010
Item
Budget (IDR T)
Government bond issuances, net IDR104.4 T
Financing Needs
Various tenors (long and short term)
Diversified Instruments
(Sukuk, conventional, GMTN, direct buying, retail, nontradable bonds)
External loans, gross IDR57.6 T (US$5.7bn)
Program loans, among others from World
Bank, 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 confidence
Deficit
(98.0)
Financing:
A Total domestic financing
Government Securities
107.9
104.4
B Total Foreign financing
Program Loan
Project Loan
Total gross drawing
On-lending to SOEs and local
governments
Amortizations
(9.9)
24.4
33.2
57.6
(8.6)
(58.8)
98.0
Total financing
45
Source: Ministry of Finance
State Budget Financing 2010
in trillion IDR
2010- Budget
Total Revenue & Grants
of which
Tax Revenue
Non Tax Revenue
Expenditure
of which
Interest payment
Domestic
Foreign
Subsidy
Primary Balance
Overall Balance (deficit)
Financing
Non Debt
Debt
Govt Securities (Net)
Domestic Official Borrowing
External Official Borrowing (Net)
Disbursement
Program Loan
Project Loan
On lending
Repayment
% of
GDP
949.7
742.7
207.0
1,047.7
115.6
15.7%
12.3%
3.4%
17.3%
1.9%
77.4
38.2
1.3%
0.6%
0.0%
154.9
2.6%
0.0%
0.0%
0.0
17.6
(98.0)
-1.6%
98.0
2.4
95.6
1.6%
0.0%
0.0%
1.6%
0.0%
104.4
1.7%
0.0%
1.00
(9.8)
57.6
24.4
33.2
(8.6)
(58.8)
0.0%
-0.2%
1.0%
0.4%
0.5%
-0.1%
-1.0%
Assumptions:
GDP (trillion)
Growth (%)
Inflation (%)
3-mo SBI (% avg)
Rp / USD (avg)
Oil Price (USD/barrel)
Oil Lifting (MBCD)
46
6,050.1
5.5
5.0
6.5
10,000.0
65.0
0.965
Source: Ministry of Finance.
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%
Debt to GDP Ratio
60%
Debt Composition
100%
57%
50%
47%
80%
50%
50%
47%
47%
50%
50%
53%
53%
2005
2006
2007^
52%
47%
39%
40%
35%
60%
33%
29%
30%
40%
20%
48%
53%
20%
10%
0%
2004
0%
2004
2005*
2006**
2007***
2008+
2009++
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
47
Domestic Debt
2008^^
2009^^^
External Debt
Notes:
^
: Preliminary
^^ : Very Preliminary
^^^ : Very Very Preliminary
Source: Ministry of Finance.
Debt To GDP
Outstanding as of December 31, 2009
2004
2005*
GDP
2,295,826.20
2,774,281.00
3,339,480.00
Debt Outstanding (billion IDR)
- Domestic Debt (Securities)
- Foreign Debt (Loan+Securities)
1,299,504.02
653,032.15
646,471.87
1,313,294.73
658,670.86
654,623.87
1,302,158.97
693,117.95
609,041.02
Debt to GDP Ratio
- Domestic Debt to GDP Ratio
- Foreign Debt to GDP Ratio
Notes:
*
=
**
=
***
=
+
=
++
=
48
End of Year
2006**
2007***
56.60%
28.44%
28.16%
47.34%
23.74%
23.60%
38.99%
20.76%
18.24%
2008+
2009++
3,949,321.40
4,954,028.90
5,401,640.30
1,389,415.00
737,125.54
652,289.46
1,636,740.72
783,855.10
852,885.62
1,589,780.96
836,308.91
753,472.05
35.18%
18.66%
16.52%
33.04%
15.82%
17.22%
29.43%
15.48%
13.95%
Preliminary
Very Preliminary
Very Very Preliminary
GDP Based on numbers from BPS
GDP Based on Assumption on 2009 Revised Budget
Source: Ministry of Finance.
Total Debt Maturity Profile
140
130
120
Promissory Notes
to BI
110
100
90
80
70
60
50
40
30
20
10
-
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
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
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
6.95
5.06
-
4.28
8.05
3.90
-
3.78
-
3.30
126.7
1.80
-
1.24
15.04
1.05
-
0.85
0.68
20.50 24.71
0.59
-
1.05
-
Notes:
• Preliminary, as of December 31, 2009
• Excluding amortization of Non Tradable Securities (SUN-002, SU-004, and SU-007)
49
Source: Ministry of Finance.
Outstanding of Total Central Government Debt
[Billion USD ]
180
160
140
120
100
104
73
77
71
71
82
85
83
71
68
62
61
59
64
69
69
63
62
62
67
65
1999
2000
2001
2002
2003
2004
2005
2006
2007+
2008++
Dec'09+++
64
80
60
40
20
-
Loan
Government Securities
Year
1999
2000
2001
2002
2003
2004
2005
2006
2007+
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%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Total Central Government Debt
2008++ Dec'09+++
+
Preliminary numbers
++ Very preliminary numbers
+++ Very very preliminary numbers, as of December, 2009
50
Source: Ministry of Finance.
Holders of Tradable Government Securities
There is an increasing proportion of foreign and non-bank holders of Indonesian Government securities.
Holders of Tradable Domestic Government Securities
100%
2.69%
25.29%
Developments in the Domestic Market
Yearly issuance schedule publicly available
7.78%
13.12%
16.36%
16.66%
18.56%
19.49%
19.61%
Established primary dealership infrastructure
Established benchmark series
17.15%
80%
20.82%
Active communication with market participants
24.30%
29.74%
37.71%
60%
37.89%
37.92%
Variety of domestic securities available
– T-Bills, fixed rate, floating rate, variable rate, zero
coupon, retail bonds and Sukuk (1)
40%
72.02%
75.07%
66.07%
59.34%
53.60%
20%
43.72%
42.62%
42.48%
Dec-09
Jan-10
February 2,
2010
0%
Dec-04
Dec-05
BANK
51
Dec-06
Dec-07
NON BANK
Dec-08
OFFSHORE HOLDER
Source: Ministry of Finance
REPUBLIC OF INDONESIA
Recent Economic Developments
Annexes
Table of Contents (Annexes)
I. Indonesian Debt Profile
II. Infrastructure Development
III. Energy and Mineral Resources – Profile and Policy
Annex I: Indonesian Debt Profile
2010 Funding Strategy on Track
The Government’s funding plans are well on-track with realized financing at 18.55% of gross issuance
required in the 2010 Budget
Net Issuance Realization as of February 2, 2010
2010 Issuance Program
IDR tr
2010 Budget
Government Securities Net Financing:
Redemption + Buyback (1)
Net Realization (February 2, 2010)
Gross Issuance:
Coupon GDS (2)
Retail bonds
Retail Sukuk
Zero coupon GDS (2)
T’bill for Local Govt
Domestic Sukuk
104.4
(70.54)
26.95
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
-
•
Indo GMTN
0.95
•
Samurai Bond
32.45
10.8
2.15
International bonds
International Sukuk
International bonds
18.55
Redemption + Buyback
(5.5)
Source: Ministry of Finance
1.
Redemption and buyback amount subject to change
2.
GDS stands for Government Debt Securities (SUN)
55
Source: Ministry of Finance.
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
3,805,000
3,781,000
4,222,000
3,067,700
14,875,700
313,000
178,000
116,000
1,261,000
1,868,000
2,295,000
4,163,000
2,866,000
1,552,000
10,876,000
1,100,000
1,450,000
2,700,000
2,250,000
7,500,000
55,000
105,000
790,000
950,000
1,050,000
1,900,000
1,050,000
1,450,000
5,450,000
3.46
2.61
1.56
1.36
1.98
5.69
1.70
12-Jan-10 SPN20110113
FR0027
FR0028
FR0052
14-Jan-10
13-Jan-11
15-Jun-15
15-Jul-17
15-Aug-30
9.50%
10.00%
10.50%
6.81%
8.19%
8.68%
10.55%
5,000,000
5,000,000
19-Jan-10 IFR0003
IFR0005
IFR0006
IFR0007
21-Jan-10
15-Sep-15
15-Jan-17
15-Jan-25
9.25%
9.00%
10.25%
8.70%
9.20%
10.52%
1,000,000
1,000,000
26-Jan-10 SPN20110113
FR0031
FR0040
FR0050
28-Jan-10
13-Jan-11
15-Nov-20
15-Sep-25
15-Jul-38
11.00%
11.00%
10.50%
6.86%
9.76%
10.50%
10.87%
5,000,000
5,000,000
1.60
1.97
2.19
2.19
2.73
1.07
2.00
Note: IFR: Islamic Fixed Rate (Sukuk)
56
Source: Ministry of Finance.
International Issuance (Global Bond 2010)
INDO-20 GMTN
1
2
3
Rating (S&P I Moody's I Fitch)
Size
Coupon
4
5
6
Pricing Date
Settlement Date
Maturity Date
7
Issue Format
8
9
10
11
BB- I Ba2 I BB
USD 2,000,000,000
5.875%
January 12, 2010
January 19, 2010
March 13, 2020
Rule 144A/Reg S
Yield when Issued
Price when Issued
Spread over US Treasury
US Treasury Yield
6.00%
99.044%
227.9 bps
3.721%
By Investors Type
By Region
By Region
Asia, 24%
USA,
49%
57
Europe ,
27%
Retails, 6%
Insurance
& others,
11%
Banks, 14%
Source: Ministry of Finance.
Asset
Managers,
69%
Samurai Bond Issuance 2009
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.
58
1
2
Size
Coupon
3
4
5
Pricing Date
Settlement Date
Maturity Date
6
Issue Format
Samurai Bond
JPY 35,000,000,000
2.730%
July 17, 2009
July 29, 2009
July 29, 2019
Private Placement
Source: Ministry of Finance.
Maturity Profile of Tradable Government securities as of February 2, 2010
trillion rupiah
60
40
20
0
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
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
Total
-
-
-
-
27.64
9.37
8.43
9.37
17.80
22.35
18.74
-
-
-
-
-
-
-
-
-
-
-
14.99
-
14.06
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
IB
ZCB : Zero Coupon bond
IB : International Bond
VR : Variable Rate Bond
59
SPN : T Bills
ORI : Retail Bond SR : Retail Sukuk
FR : Fixed Rate Bond
18.74 161.49
IFR : Islamic Fixed Rate Bond
Source: Ministry of Finance.
Daily Transaction & Offshore Ownership
Investor base is getting more diversified with the increased ownership by foreign investors. This depicts investor
confidence on Indonesia.
Diversified bondholders
Ever-increasing daily transaction
360
7,000
IDR
[Rp Billion
miliar]
125,000
320
5,899
6,000
280
100,000
5,000
240
4,277
4,235
4,000
3,776
3,536 3,566
3,307
3,306
3,819
3,636 3,598
3,530 3,473
2,960
3,000
3,018
2,631
2,645
2,549
200
75,000
72,09%
72,41%
18,08%
17,76%
9,83%
9,84%
160
50,000
120
2,122
2,000
1,395
80
25,000
1,000
40
522
20
08
Ja
n'
09
Fe
b'0
9
Ma
r'0
9
Ap
r'0
9
Me
i'0
9
Ju
n'0
9
Ju
l '0
9
Ag
us
t'0
9
Se
p'0
9
Ok
t'0
9
No
v'0
9
De
s'0
9
Ja
up
n'1
to
0
Fe
b2
'1
0
20
07
20
06
20
05
20
04
Volume (billion rupiah) - LHS
60
0
20
03
20
02
-
Frequency - RHS
Dec-07
Dec-08
Mar-09
Jun-09
Sep-09
Dec-09
Jan-10
2-Feb-10
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
Source: Ministry of Finance.
Ownership of IDR Tradable Government Securities (percentage and nominal)
Banks
State Banks - Recap
Private Banks - Recap
Non Recap Banks
Regional Banks
Shariah Banks
Govt Institutions
Bank Indonesia
Non-Banks
Mutual Funds
Insurance Company
Foreign Holders
Pension Fund
Securities Company
Others
Dec-07
268.65 56.2%
154.67 32.4%
72.63 15.2%
35.37 7.4%
5.97 1.3%
0.0%
14.86 3.1%
14.86 3.1%
194.24 40.7%
26.33 5.5%
43.47 9.1%
78.16 16.4%
25.50 5.3%
0.28 0.1%
20.50 4.3%
Dec-08
Mar-09
June-09
258.75 49.2% 279.12 51.1% 272.15 48.96%
144.72 27.5% 154.08 28.2% 146.26 26.31%
61.67 11.7% 66.45 12.2% 65.26 11.74%
45.17 8.6% 49.36 9.0% 52.83 9.50%
6.50 1.2%
8.45 1.5% 7.04 1.27%
0.69 0.1%
0.77 0.1% 0.77 0.14%
23.01 4.4% 21.32 3.9% 26.79 4.82%
23.01 4.4% 21.32 3.9% 26.79 4.82%
243.93 46.4% 246.22 45.0% 256.96 46.22%
33.11 6.3% 35.19 6.4% 36.02 6.48%
55.83 10.6% 60.25 11.0% 61.75 11.11%
87.61 16.7% 79.83 14.6% 87.15 15.68%
32.98 6.3% 34.52 6.3% 34.38 6.18%
0.53 0.1%
0.53 0.1% 0.62 0.11%
33.87 6.4% 35.89 6.6% 37.04 6.66%
Total
477.75 100.0% 525.69 100.0% 546.66 100.0% 555.91 100.00%
September-09
261.78 46.14%
142.27 25.08%
62.43 11.00%
49.87
8.79%
6.43
1.13%
0.79
0.14%
23.36
4.12%
23.36
4.12%
282.22 49.74%
41.17
7.26%
68.15 12.01%
93.23 16.43%
36.82
6.49%
0.72
0.13%
42.13
7.43%
October-09
255.20 44.38%
141.50 24.61%
59.80 10.40%
46.94
8.16%
6.05
1.05%
0.90
0.16%
24.15
4.20%
24.15
4.20%
295.62 51.42%
44.21
7.69%
70.51 12.26%
101.42 17.64%
37.60
6.54%
0.65
0.11%
41.23
7.17%
November-09
255.82
43.97%
143.31
24.63%
59.92
10.30%
44.71
7.69%
6.17
1.06%
1.71
0.29%
23.97
4.12%
23.97
4.12%
301.97
51.91%
44.79
7.70%
72.65
12.49%
104.47
17.96%
38.06
6.54%
0.53
0.09%
41.47
7.13%
December-09
254.36 43.72%
144.19 24.79%
59.98 10.31%
42.40
7.29%
6.02
1.03%
1.77
0.30%
22.50
3.87%
22.50
3.87%
304.89 52.41%
45.22
7.77%
72.58 12.48%
108.00 18.56%
37.50
6.45%
0.46
0.08%
41.12
7.07%
January-10
251.54 42.62%
2-Feb-10
250.69 42.48%
1.82
22.09
22.09
316.51
46.96
75.68
115.02
37.62
0.51
40.73
0.31%
3.74%
3.74%
53.63%
7.96%
12.82%
19.49%
6.37%
0.09%
6.90%
1.82
22.14
22.14
317.32
47.17
75.69
115.70
37.56
0.50
40.69
0.31%
3.75%
3.75%
53.77%
7.99%
12.83%
19.61%
6.36%
0.09%
6.89%
567.37
574.97
581.76
581.75
590.15
100%
590.15
100%
100.00%
100.00%
100.00%
100.00%
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
61
Source: Ministry of Finance.
IDR Government Bonds : Yield Curve (IDMA)
[in percentage]
15.50
14.50
13.50
12.50
11.50
10.50
Tenor
9.50
8.50
7.50
6.50
2 Feb '10
Dec '09
Aug '09
26 Jan '10
Oct '09
Feb '09
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
5.50
1Y 2Y 3Y 4Y 5Y 6Y 7Y 8Y 9Y 10Y
62
15Y
20Y
30Y
Source: IDMA, Bloomberg
Profile of Government Debt
Recent Economic Developments
March, 2010
Published by Investors Relations Unit – Republic of Indonesia
Address
Tel
Facsimile
Website
Bank Indonesia
International Directorate
Investor Relations Unit
Sjafruddin Prawiranegara Building, 5 th floor
Jalan M.H. Thamrin 2
Jakarta, 10110 Indonesia
+6221 381 8316
+6221 381 8298
+6221 350 1950
Elsya Chani: [email protected]
Dyah Miranti Wulandari: [email protected]
www.bi.go.id/iru
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.
3
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 rate decided 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.
4
Indonesia Story: as Acknowledged by Rating Agencies
Despite of the global crisis, the Republic continued to receive good review from Rating agencies:
Moody’s Investors Service (September 16, 2009): upgraded Indonesia’s foreign and local-currency sovereign debt ratings to 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): upgraded Indonesia’s long-term foreign currency rating to BB from BB- with positive outlook which 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 the country’s public finances.
BBB+
Baa1
BBB
BBB-
Economic Crisis
in 1998
BB+
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
Baa2
Baa3
Ba1
BB
Ba2
BB-
Ba3
Sep 09: Moody’s
upgrade to Ba2 (stable
outlook)
B+
B
CCC+
CCC
CCCCC
R/C
SD/DDD
B1
B2
B3
B-
5
Mar 10: S&P
upgrade to BB
(positive outlook)
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:
Caa1
Fitch
upgrades to Caa2
BB+ (stable
Caa3
outlook)
Ca
C
Positive Macroeconomic Developments
Real Sector: Indonesia Development Policy
Indonesia Development Policy is based on a ‘Triple Track Strategy’
1st
2nd
Pro-Growth:
Increase Growth by prioritizing export and investment
Pro-Job :
Boost up the real sector in order to create jobs
Pro-Poor:
3rd
7
Revitalize agriculture, forestry, maritime, and rural economy
to reduce poverty
Source: Coordinating Ministry for Economic Affairs
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 2009
Tax and Administrative Reforms:
Continue tax policy and administration reform
Simplify tax regulations and broaden tax base for taxpayers
Maintain Social Welfare
Continue welfare programs and provide budget for education sector
Fiscal Policy for 2010 to Promote Economic Recovery
Energy incentive
Fiscal Policy for 2010 to Enhance Indonesia’s Competitiveness
Infrastructure Development
8
Economic Growth Sustained
The growth is quite strong compared globally.
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.
Sustainable Economic Growth
% yoy
6.3
7.0
6.0
5.5
6.0
4.5
5.0
4.0
3.0
2.0
1.0
0.0
(*): Preliminary
Source: Ministry of Finance, BPS.
9
2006
2007
2008*
2009*
Source: Bank Indonesia.
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
Declining NPLs (%)
Sufficient CAR (%)
3.60%
21.3%
19.3%
16.8%
17.4%
1.90%
1.50%
0.90%
2006
2007
2008
Average CAR (%)
Dec-09
2006
2007
Net NPL(%)
2008
Dec-09
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 quality
10
Source: Bank Indonesia.
Balance of Payments Q4-2009
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.
Balance of Payments
11
Source: Bank Indonesia.
Flexible monetary policy to support growth objectives
The monetary relaxation has offered ample support for the economic recovery and bank intermediation process
Sources of Inflation
BI Rate and Inflation
20
%
20
15
15
10
10
5
5
0
-5
0
Food
2006
12
2007
BI Rate (%)
2008
2009
Inflation (%y-o-y)
Processed Housing Clothing Health Education Transp. &
Food
Comm.
2006
2007
2008
2009
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.
Source: Bank Indonesia, BPS.
Inflation
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).
CPI Inflation
20
Monthly (m-t-m)
Annually (y-o-y)
15
10
9.17
6.71
5.27
5
3.81
0.30
Jan
Feb
Des
Okt
Nov
Sep
July
Aug
May
June
Apr
Feb
Mar
Jan
Dec
Nov
Oct
Sep
Aug
Jul
Jun
May
Apr
Mar
Jan
Feb
Dec
Oct
Nov
Sep
Jul
Aug
Jun
Apr
May
Mar
Jan
Feb
Dec
Oct
Nov
Sep
Jul
Aug
Jun
Apr
May
Mar
Jan
Feb
0
-5
2006
13
2007
2008
2009
2010
Source: Bank Indonesia
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 economic
recovery. 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 other
regional 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 yield of 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
14
Exchange Rate Movement – Indonesia Compared to Regional
Source: Bank Indonesia.
In 2010, the Indonesian economy is positioned to grow higher
2010 Forecast
Main Factors Behind The Forecast
GDP Growth
is forecasted at about
5.5%-6.0%
Export
is expected to chart
higher growth
Private
Consumption
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
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.
Household consumption is forecasted to remain strong. The strengthening global economic outlook for 2010 will
given added momentum to Indonesia’s exports, which in turn will produce an overall increase in private incomes.
Higher investment will also contribute to rising incomes, thus paving the way for stronger public purchasing power.
will remain strong
Inflation
is estimated to be on
target at range of
5.0% 1%
15
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.
Source: Bank Indonesia.
Bank Indonesia Monetary Policy
Monetary Policy Stance
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%.
BI Rate
14%
12.75%
12%
10%
8.75%
8.00%
8%
6.50%
6%
4%
2%
0%
Sep-05
17
Jun-06
Mar-07
Dec-07
Sep-08
Jun-09
Mar-10
Source: Bank Indonesia.
Inflation Expectation
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 – Consensus Forecast
CPI Inflation Forecasts
%, yoy
Ekspektasi Inflasi - Consensus Forecast
12.0
2009
2010
10.0
4.9
6.0
5.5
8.0
4.0
2.0
Jan-08
Feb-08
Mar-08
Apr-08
May-08
Jun-08
Jul-08
Aug-08
Sep-08
Oct-08
Nov-08
Dec-08
Jan-09
Feb-09
Mar-09
Apr-09
May-09
Jun-09
Jul-09
Aug-09
0.0
18
Source: Bank Indonesia
Latest Macroeconomic Indicators
19
Source: Bank Indonesia
Bank Indonesia Banking Policy
Banking Stability
The Indonesian banking sector continues to maintain financial stability and show positive performance
(as of December 2009):
Indicator
Total Assets (T Rp)
Deposits (T Rp)
- Demand Deposits
- Savings
- Time Deposits
Earning Assets (T Rp)
- Loans (incl. channeling)
- Loans (excl. channeling) (T Rp)
- BI Certificates
- Overnight Placements at BI
- Securities
- Interbank Placements
- Equity Placements
Net Interest Income--Cummulated (T Rp)
Capital Adequacy Ratio (%)
Loans/Earning Assets (%)
Gross NPL (incl. channeling) (%)
Gross NPL (excl. channeling) (%)
Net NPL (incl. channeling) (%)
Net NPL (excl. channeling) (%)
Return on Assets (%)
Net Interest Margin (%)
Ops Expense to Ops Income (%)
Loan to Deposit Ratio (%)
No. of banks
No. of bank office network
21
Dec-06
Dec-07
Dec-08
Mar-09
Jun-09
Sep-09
Dec-09
1,693.5
1,287.0
338.0
333.9
615.1
1,556.2
832.9
792.2
179.0
38.6
342.9
156.8
5.9
83.1
20.5
53.5
7.0
6.1
3.6
2.5
2.6
0.5
86.4
64.7
130
9,110
1,986.5
1,510.7
405.5
438.5
666.7
2,794.0
1,045.7
1,002.0
203.9
46.8
350.2
139.8
5.6
96.4
19.3
37.4
4.6
4.1
1.9
1.2
2.8
0.3
78.8
69.2
130
9,680
2,310.6
1,753.3
430.0
498.6
824.7
3,478.6
1,353.6
1,307.7
166.5
71.9
358.5
213.8
6.6
113.1
16.2
38.9
3.8
3.2
1.5
0.8
2.3
0.3
84.1
77.2
124
10,936
2,352.1
1,786.2
437.0
492.5
856.7
3,520.4
1,342.1
1,305.4
208.1
46.8
374.0
236.9
7.0
31.4
17.4
38.1
4.5
3.9
1.9
1.2
2.8
0.4
82.3
75.1
123
12,039
2,354.3
1,824.3
447.1
515.0
862.1
3,567.0
1,368.9
1,335.4
204.2
58.6
363.3
229.5
7.0
63.5
17.0
38.4
4.5
3.9
1.7
1.0
2.7
0.3
82.2
75.0
122
12,556
2,388.6
1857.3
460.4
536.2
860.7
3607.3
1399.9
1366.1
182.4
44.8
351.7
252.9
9.6
94.6
17.7
38.8
4.3
3.8
1.3
0.7
2.6
0.3
82.0
75.4
121
12,652
2,534.1
1973.0
465.9
605.4
901.7
3823.0
1470.8
1437.9
212.1
84.4
346.2
261.5
10.0
129.3
17.4
38.5
3.8
3.3
0.9
0.3
2.6
0.3
81.6
74.5
121
12,971
Source: Bank Indonesia
The Indonesian Banking sector: Weathering the Global Crisis
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
22
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
Source: Bank Indonesia
Prudential Measures To Mitigate Instability
Bank Indonesia has exercised several regulatory measures to prevent banks from crisis:
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.
23
Source: Bank Indonesia
Enhanced International Collaboration
• 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
24
Source: Bank Indonesia
Balance of Payments Q4-2009
Balance of Payments Q4–2009
Overall Balance and Current Account
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.
26
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
requiring
commodities
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% (Q3-2009: 11.1%). Meanwhile, the non-oil and
gas import posted a smaller negative
growth
in
Q4-2009
(-8.4%)
compared to Q3-2009 (-24.3%).
27
as
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
operation.
28
LNG
plant
entering
Balance of Payments Q4 – 2009
Services, Income, and Current Transfers
• 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
transfers
on
was
current
slightly
increase mainly accounted for
by
increase
in
general
government receipt of current
transfers.
29
Balance of Payments Q4 – 2009
Financial Account
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
2009,
instrument
the
in
December
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
conditions
liquidity.
30
and
macroeconomic
improving
global
Balance of Payments Q4 – 2009
Financial Account: Foreign Direct Investment
Foreign
Direct
Investment
(FDI) in Q4-2009 posted a net
inflows
of
million,
slightly
US$962
lower
than
US$987 billion net inflows in
Q3-2009.
more
This condition was
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
sector.
31
in manufacturing
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
improved
in
still
Q4-2009
compared to one quarter earlier.
Also
contributed
improvement
was
to
this
the
direct
issuance of corporate bond in
global market such as one
conducted
Indonesia.
32
by
PT
Adaro
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
increased as scheduled.
33
State Budget
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
Fiscal Policy for 2010 to Promote Economic Recovery
Incentives on
General Taxation
Energy
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 items
Provide tax incentive on imports (both income tax and VAT on imports) for the oil and gas exploration
sector
Fiscal Policy for 2010 to Enhance Indonesia’s Competitiveness
Infrastructure
Development and
Social Welfare
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 policy
35
Source: Ministry of Finance
Budget Deficit / GDP
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 (%)
India
(8,0%)
Vietnam
Russia
(7,7%)
Turkey
Thailand
China
(1,4%)
(6,0%)
(1,3%)
(8,0%)
(1,6%)
(1,6%)
(1,8%)
(10,0%)
(9,1%)
(0.9%)
(6,3%)
(4,0%)
(1,0%)
(5,7%)
(0,8%)
(3,2%)
(2,0%)
(3,0%)
(0,6%)
(1,6%)
0,0%
(0,4%)
(1,2%)
(3,8%)
(0,1%)
(0,2%)
Philippines
0,0%
(3,7%)
2009*
Brazil
2008
Colombia
2007
Indonesia
2006
Budget Deficit / GDP 2009* vs. Emerging Markets Countries
(12,0%)
* Realized budget
36
Source: Ministry of Finance
State Budget 2009 - 2010
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
2009 (Realization in IDR Trillion)
ITEMS
A. Revenues and Grants
I. Domestic Revenue
1. Tax revenue
- Stimulus
2. Non Tax revenue
II. Grants
B. Expenditure
I. State Expenditure
A. Expenditure Ministries/Agencies
- Stimulus
B. Expenditure Non Ministries/Agencie
eg: Subsidi
- Stimulus (Fuel and Electric)
II. Transfer to region
D. Overall Balances
% deficit to GDP
E. Financing
I. Domestic Financing
II. Foreign Financing
38
Rev Budget
871.0
870.0
652.0
56.3
218.0
1.0
1,000.8
691.5
314.7
12.2
376.8
158.1
4.2
309.3
Realization % to Rev
% to GDP
*)
budget
866.8
865.7
641.2
45.8
224.5
1.1
954.0
645.4
301.6
10.2
343.9
159.5
4.2
308.6
99.5
99.5
98.3
81.3
103.0
110.5
95.3
93.3
95.8
83.2
91.3
100.9
100.0
99.8
(129.8)
(2.4)
(87.2)
(1.6)
67.2
16.2
16.2
12.0
0.9
4.2
0.0
17.9
12.1
5.7
0.2
6.4
3.0
0.1
5.8
0.0
-1.6
129.8
142.6
(12.7)
125.2
142.6
(17.4)
96.4
100.0
136.7
2.3
2.7
-0.3
Source: Ministry of Finance.
State Budget (Revised 2009 and 2010) - Revenue
39
Source: Ministry of Finance.
State Budget 2009 - Expenditures
40
Source: Ministry of Finance.
State Budget 2009 - Overall Balance
41
Source: Ministry of Finance.
Budget Deficit 2010
2010 Budget Deficit is proposed at 1.6%; taking into account the confidence in sustainability of government’s
financing resources ability
GDP – Outstanding Debt – Debt Ratio to GDP
Triillion Rp
7000
6000
85
89
77
5000
67
4000
61
57
47
3000
39
35
2000
33
32
30
2009*
2010*
1000
0
1999
2000
GDP
2001
2002
2003
2004
2005
Outstanding Debt
2006
2007
2008
%
100
90
80
70
60
50
40
30
20
10
0
Debt ratio to GDP
Main financing resources for 2010 financing deficit Rp98 T (US$9.8 bio)
42
Government bond issuances, net Rp104,4 T (US$ 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
Source: Ministry of Finance.
State Budget 2009 and 2010 Overview
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
Budget 2009 and 2010 (In Trillion of IDR)
Realized 2009 (Preliminary)
Budget 2010
866.8
949.7
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
224.5
205.4
954.0
1,047.7
645.4
725.2
94.5
106.5
308.6
322.4
(87.2)
(98.0)
(1.6)
(1.6)
125.2
98.0
A. Revenue and Grant
1. Tax
2. Non tax revenue
B. Expenditure
I. Central Government
-Energy Subsidies
II. Transfer to Region
C. Surplus/(Deficit) Budget (A -B)
% GDP
D. Financing
43
Source: Ministry of Finance
Debt Management and Debt Profile
Financing Strategy for the 2010 Budget Deficit
Financing Strategy
Main financing sources for 2010 financing deficit of IDR98 T
(US$9.8bn)
2010
Item
Budget (IDR T)
Government bond issuances, net IDR104.4 T
Financing Needs
Various tenors (long and short term)
Diversified Instruments
(Sukuk, conventional, GMTN, direct buying, retail, nontradable bonds)
External loans, gross IDR57.6 T (US$5.7bn)
Program loans, among others from World
Bank, 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 confidence
Deficit
(98.0)
Financing:
A Total domestic financing
Government Securities
107.9
104.4
B Total Foreign financing
Program Loan
Project Loan
Total gross drawing
On-lending to SOEs and local
governments
Amortizations
(9.9)
24.4
33.2
57.6
(8.6)
(58.8)
98.0
Total financing
45
Source: Ministry of Finance
State Budget Financing 2010
in trillion IDR
2010- Budget
Total Revenue & Grants
of which
Tax Revenue
Non Tax Revenue
Expenditure
of which
Interest payment
Domestic
Foreign
Subsidy
Primary Balance
Overall Balance (deficit)
Financing
Non Debt
Debt
Govt Securities (Net)
Domestic Official Borrowing
External Official Borrowing (Net)
Disbursement
Program Loan
Project Loan
On lending
Repayment
% of
GDP
949.7
742.7
207.0
1,047.7
115.6
15.7%
12.3%
3.4%
17.3%
1.9%
77.4
38.2
1.3%
0.6%
0.0%
154.9
2.6%
0.0%
0.0%
0.0
17.6
(98.0)
-1.6%
98.0
2.4
95.6
1.6%
0.0%
0.0%
1.6%
0.0%
104.4
1.7%
0.0%
1.00
(9.8)
57.6
24.4
33.2
(8.6)
(58.8)
0.0%
-0.2%
1.0%
0.4%
0.5%
-0.1%
-1.0%
Assumptions:
GDP (trillion)
Growth (%)
Inflation (%)
3-mo SBI (% avg)
Rp / USD (avg)
Oil Price (USD/barrel)
Oil Lifting (MBCD)
46
6,050.1
5.5
5.0
6.5
10,000.0
65.0
0.965
Source: Ministry of Finance.
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%
Debt to GDP Ratio
60%
Debt Composition
100%
57%
50%
47%
80%
50%
50%
47%
47%
50%
50%
53%
53%
2005
2006
2007^
52%
47%
39%
40%
35%
60%
33%
29%
30%
40%
20%
48%
53%
20%
10%
0%
2004
0%
2004
2005*
2006**
2007***
2008+
2009++
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
47
Domestic Debt
2008^^
2009^^^
External Debt
Notes:
^
: Preliminary
^^ : Very Preliminary
^^^ : Very Very Preliminary
Source: Ministry of Finance.
Debt To GDP
Outstanding as of December 31, 2009
2004
2005*
GDP
2,295,826.20
2,774,281.00
3,339,480.00
Debt Outstanding (billion IDR)
- Domestic Debt (Securities)
- Foreign Debt (Loan+Securities)
1,299,504.02
653,032.15
646,471.87
1,313,294.73
658,670.86
654,623.87
1,302,158.97
693,117.95
609,041.02
Debt to GDP Ratio
- Domestic Debt to GDP Ratio
- Foreign Debt to GDP Ratio
Notes:
*
=
**
=
***
=
+
=
++
=
48
End of Year
2006**
2007***
56.60%
28.44%
28.16%
47.34%
23.74%
23.60%
38.99%
20.76%
18.24%
2008+
2009++
3,949,321.40
4,954,028.90
5,401,640.30
1,389,415.00
737,125.54
652,289.46
1,636,740.72
783,855.10
852,885.62
1,589,780.96
836,308.91
753,472.05
35.18%
18.66%
16.52%
33.04%
15.82%
17.22%
29.43%
15.48%
13.95%
Preliminary
Very Preliminary
Very Very Preliminary
GDP Based on numbers from BPS
GDP Based on Assumption on 2009 Revised Budget
Source: Ministry of Finance.
Total Debt Maturity Profile
140
130
120
Promissory Notes
to BI
110
100
90
80
70
60
50
40
30
20
10
-
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
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
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
6.95
5.06
-
4.28
8.05
3.90
-
3.78
-
3.30
126.7
1.80
-
1.24
15.04
1.05
-
0.85
0.68
20.50 24.71
0.59
-
1.05
-
Notes:
• Preliminary, as of December 31, 2009
• Excluding amortization of Non Tradable Securities (SUN-002, SU-004, and SU-007)
49
Source: Ministry of Finance.
Outstanding of Total Central Government Debt
[Billion USD ]
180
160
140
120
100
104
73
77
71
71
82
85
83
71
68
62
61
59
64
69
69
63
62
62
67
65
1999
2000
2001
2002
2003
2004
2005
2006
2007+
2008++
Dec'09+++
64
80
60
40
20
-
Loan
Government Securities
Year
1999
2000
2001
2002
2003
2004
2005
2006
2007+
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%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Total Central Government Debt
2008++ Dec'09+++
+
Preliminary numbers
++ Very preliminary numbers
+++ Very very preliminary numbers, as of December, 2009
50
Source: Ministry of Finance.
Holders of Tradable Government Securities
There is an increasing proportion of foreign and non-bank holders of Indonesian Government securities.
Holders of Tradable Domestic Government Securities
100%
2.69%
25.29%
Developments in the Domestic Market
Yearly issuance schedule publicly available
7.78%
13.12%
16.36%
16.66%
18.56%
19.49%
19.61%
Established primary dealership infrastructure
Established benchmark series
17.15%
80%
20.82%
Active communication with market participants
24.30%
29.74%
37.71%
60%
37.89%
37.92%
Variety of domestic securities available
– T-Bills, fixed rate, floating rate, variable rate, zero
coupon, retail bonds and Sukuk (1)
40%
72.02%
75.07%
66.07%
59.34%
53.60%
20%
43.72%
42.62%
42.48%
Dec-09
Jan-10
February 2,
2010
0%
Dec-04
Dec-05
BANK
51
Dec-06
Dec-07
NON BANK
Dec-08
OFFSHORE HOLDER
Source: Ministry of Finance
REPUBLIC OF INDONESIA
Recent Economic Developments
Annexes
Table of Contents (Annexes)
I. Indonesian Debt Profile
II. Infrastructure Development
III. Energy and Mineral Resources – Profile and Policy
Annex I: Indonesian Debt Profile
2010 Funding Strategy on Track
The Government’s funding plans are well on-track with realized financing at 18.55% of gross issuance
required in the 2010 Budget
Net Issuance Realization as of February 2, 2010
2010 Issuance Program
IDR tr
2010 Budget
Government Securities Net Financing:
Redemption + Buyback (1)
Net Realization (February 2, 2010)
Gross Issuance:
Coupon GDS (2)
Retail bonds
Retail Sukuk
Zero coupon GDS (2)
T’bill for Local Govt
Domestic Sukuk
104.4
(70.54)
26.95
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
-
•
Indo GMTN
0.95
•
Samurai Bond
32.45
10.8
2.15
International bonds
International Sukuk
International bonds
18.55
Redemption + Buyback
(5.5)
Source: Ministry of Finance
1.
Redemption and buyback amount subject to change
2.
GDS stands for Government Debt Securities (SUN)
55
Source: Ministry of Finance.
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
3,805,000
3,781,000
4,222,000
3,067,700
14,875,700
313,000
178,000
116,000
1,261,000
1,868,000
2,295,000
4,163,000
2,866,000
1,552,000
10,876,000
1,100,000
1,450,000
2,700,000
2,250,000
7,500,000
55,000
105,000
790,000
950,000
1,050,000
1,900,000
1,050,000
1,450,000
5,450,000
3.46
2.61
1.56
1.36
1.98
5.69
1.70
12-Jan-10 SPN20110113
FR0027
FR0028
FR0052
14-Jan-10
13-Jan-11
15-Jun-15
15-Jul-17
15-Aug-30
9.50%
10.00%
10.50%
6.81%
8.19%
8.68%
10.55%
5,000,000
5,000,000
19-Jan-10 IFR0003
IFR0005
IFR0006
IFR0007
21-Jan-10
15-Sep-15
15-Jan-17
15-Jan-25
9.25%
9.00%
10.25%
8.70%
9.20%
10.52%
1,000,000
1,000,000
26-Jan-10 SPN20110113
FR0031
FR0040
FR0050
28-Jan-10
13-Jan-11
15-Nov-20
15-Sep-25
15-Jul-38
11.00%
11.00%
10.50%
6.86%
9.76%
10.50%
10.87%
5,000,000
5,000,000
1.60
1.97
2.19
2.19
2.73
1.07
2.00
Note: IFR: Islamic Fixed Rate (Sukuk)
56
Source: Ministry of Finance.
International Issuance (Global Bond 2010)
INDO-20 GMTN
1
2
3
Rating (S&P I Moody's I Fitch)
Size
Coupon
4
5
6
Pricing Date
Settlement Date
Maturity Date
7
Issue Format
8
9
10
11
BB- I Ba2 I BB
USD 2,000,000,000
5.875%
January 12, 2010
January 19, 2010
March 13, 2020
Rule 144A/Reg S
Yield when Issued
Price when Issued
Spread over US Treasury
US Treasury Yield
6.00%
99.044%
227.9 bps
3.721%
By Investors Type
By Region
By Region
Asia, 24%
USA,
49%
57
Europe ,
27%
Retails, 6%
Insurance
& others,
11%
Banks, 14%
Source: Ministry of Finance.
Asset
Managers,
69%
Samurai Bond Issuance 2009
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.
58
1
2
Size
Coupon
3
4
5
Pricing Date
Settlement Date
Maturity Date
6
Issue Format
Samurai Bond
JPY 35,000,000,000
2.730%
July 17, 2009
July 29, 2009
July 29, 2019
Private Placement
Source: Ministry of Finance.
Maturity Profile of Tradable Government securities as of February 2, 2010
trillion rupiah
60
40
20
0
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
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
Total
-
-
-
-
27.64
9.37
8.43
9.37
17.80
22.35
18.74
-
-
-
-
-
-
-
-
-
-
-
14.99
-
14.06
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
IB
ZCB : Zero Coupon bond
IB : International Bond
VR : Variable Rate Bond
59
SPN : T Bills
ORI : Retail Bond SR : Retail Sukuk
FR : Fixed Rate Bond
18.74 161.49
IFR : Islamic Fixed Rate Bond
Source: Ministry of Finance.
Daily Transaction & Offshore Ownership
Investor base is getting more diversified with the increased ownership by foreign investors. This depicts investor
confidence on Indonesia.
Diversified bondholders
Ever-increasing daily transaction
360
7,000
IDR
[Rp Billion
miliar]
125,000
320
5,899
6,000
280
100,000
5,000
240
4,277
4,235
4,000
3,776
3,536 3,566
3,307
3,306
3,819
3,636 3,598
3,530 3,473
2,960
3,000
3,018
2,631
2,645
2,549
200
75,000
72,09%
72,41%
18,08%
17,76%
9,83%
9,84%
160
50,000
120
2,122
2,000
1,395
80
25,000
1,000
40
522
20
08
Ja
n'
09
Fe
b'0
9
Ma
r'0
9
Ap
r'0
9
Me
i'0
9
Ju
n'0
9
Ju
l '0
9
Ag
us
t'0
9
Se
p'0
9
Ok
t'0
9
No
v'0
9
De
s'0
9
Ja
up
n'1
to
0
Fe
b2
'1
0
20
07
20
06
20
05
20
04
Volume (billion rupiah) - LHS
60
0
20
03
20
02
-
Frequency - RHS
Dec-07
Dec-08
Mar-09
Jun-09
Sep-09
Dec-09
Jan-10
2-Feb-10
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
Source: Ministry of Finance.
Ownership of IDR Tradable Government Securities (percentage and nominal)
Banks
State Banks - Recap
Private Banks - Recap
Non Recap Banks
Regional Banks
Shariah Banks
Govt Institutions
Bank Indonesia
Non-Banks
Mutual Funds
Insurance Company
Foreign Holders
Pension Fund
Securities Company
Others
Dec-07
268.65 56.2%
154.67 32.4%
72.63 15.2%
35.37 7.4%
5.97 1.3%
0.0%
14.86 3.1%
14.86 3.1%
194.24 40.7%
26.33 5.5%
43.47 9.1%
78.16 16.4%
25.50 5.3%
0.28 0.1%
20.50 4.3%
Dec-08
Mar-09
June-09
258.75 49.2% 279.12 51.1% 272.15 48.96%
144.72 27.5% 154.08 28.2% 146.26 26.31%
61.67 11.7% 66.45 12.2% 65.26 11.74%
45.17 8.6% 49.36 9.0% 52.83 9.50%
6.50 1.2%
8.45 1.5% 7.04 1.27%
0.69 0.1%
0.77 0.1% 0.77 0.14%
23.01 4.4% 21.32 3.9% 26.79 4.82%
23.01 4.4% 21.32 3.9% 26.79 4.82%
243.93 46.4% 246.22 45.0% 256.96 46.22%
33.11 6.3% 35.19 6.4% 36.02 6.48%
55.83 10.6% 60.25 11.0% 61.75 11.11%
87.61 16.7% 79.83 14.6% 87.15 15.68%
32.98 6.3% 34.52 6.3% 34.38 6.18%
0.53 0.1%
0.53 0.1% 0.62 0.11%
33.87 6.4% 35.89 6.6% 37.04 6.66%
Total
477.75 100.0% 525.69 100.0% 546.66 100.0% 555.91 100.00%
September-09
261.78 46.14%
142.27 25.08%
62.43 11.00%
49.87
8.79%
6.43
1.13%
0.79
0.14%
23.36
4.12%
23.36
4.12%
282.22 49.74%
41.17
7.26%
68.15 12.01%
93.23 16.43%
36.82
6.49%
0.72
0.13%
42.13
7.43%
October-09
255.20 44.38%
141.50 24.61%
59.80 10.40%
46.94
8.16%
6.05
1.05%
0.90
0.16%
24.15
4.20%
24.15
4.20%
295.62 51.42%
44.21
7.69%
70.51 12.26%
101.42 17.64%
37.60
6.54%
0.65
0.11%
41.23
7.17%
November-09
255.82
43.97%
143.31
24.63%
59.92
10.30%
44.71
7.69%
6.17
1.06%
1.71
0.29%
23.97
4.12%
23.97
4.12%
301.97
51.91%
44.79
7.70%
72.65
12.49%
104.47
17.96%
38.06
6.54%
0.53
0.09%
41.47
7.13%
December-09
254.36 43.72%
144.19 24.79%
59.98 10.31%
42.40
7.29%
6.02
1.03%
1.77
0.30%
22.50
3.87%
22.50
3.87%
304.89 52.41%
45.22
7.77%
72.58 12.48%
108.00 18.56%
37.50
6.45%
0.46
0.08%
41.12
7.07%
January-10
251.54 42.62%
2-Feb-10
250.69 42.48%
1.82
22.09
22.09
316.51
46.96
75.68
115.02
37.62
0.51
40.73
0.31%
3.74%
3.74%
53.63%
7.96%
12.82%
19.49%
6.37%
0.09%
6.90%
1.82
22.14
22.14
317.32
47.17
75.69
115.70
37.56
0.50
40.69
0.31%
3.75%
3.75%
53.77%
7.99%
12.83%
19.61%
6.36%
0.09%
6.89%
567.37
574.97
581.76
581.75
590.15
100%
590.15
100%
100.00%
100.00%
100.00%
100.00%
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
61
Source: Ministry of Finance.
IDR Government Bonds : Yield Curve (IDMA)
[in percentage]
15.50
14.50
13.50
12.50
11.50
10.50
Tenor
9.50
8.50
7.50
6.50
2 Feb '10
Dec '09
Aug '09
26 Jan '10
Oct '09
Feb '09
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
5.50
1Y 2Y 3Y 4Y 5Y 6Y 7Y 8Y 9Y 10Y
62
15Y
20Y
30Y
Source: IDMA, Bloomberg
Profile of Government Debt