Investor Meeting Presentation December 2012 Directorate General of - - PowerPoint PPT Presentation
Investor Meeting Presentation December 2012 Directorate General of Debt Management Ministry of Finance of The Republic of Indonesia www.dmo.or.id Tab able le of of Con ontent tent Government Debt Position Prudent Fiscal Management
December 2012
Directorate General of Debt Management Ministry of Finance of The Republic of Indonesia www.dmo.or.id
Government Debt Position Prudent Fiscal Management Preserved Macroeconomic Stability to Support Further Growth
4
Notes: + Provisional as of October 31, 2012
Gov’t. Debt Outstanding 2007-2012
803 906 979 1,064 1,188 1,359 586 730 611 617 621 633
400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 2007 2008 2009 2010 2011 2012+
Pinjaman/ Loans SBN/ Securities
[ triliun rupiah/ in trillion IDR ]
[ dalam triliun Rupiah dan %/ in trillion IDR and % ] Tahun/ Year Pinjaman/ Loans 586 42% 730 45% 611 38% 617 37% 621 37% 633 32% SBN/ Securities 803 58% 906 55% 979 62% 1,064 63% 1,188 63% 1,359 68% Total Utang Pemerintah Pusat/ Central Govt. Debt Total 1,389 100% 1,637 100% 1,591 100% 1,682 100% 1,809 100% 1,992 100% 2012+ 2010 2009 2007 2011 2008
5
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2030 2031 2032 2033 2035 2036 2037 2038 2041 2042 TOTAL 15,4 77,0 71,5 77,1 51,6 49,5 68,7 56,7 69,7 59,8 92,1 31,5 18,0 28,0 19,6 44,2 30,1 25,6 27,1 42,8 13,8 15,3 4,11 27,5 34,9 13,5 33,6 SUKUK USD
7,34 18,9
7,91
6,74
7,03
9,61 8,64 9,61 18,2 19,2 19,2 24,0 19,2
19,2
SUN IDR 15,4 68,2 35,8 48,5 43,0 38,7 33,0 33,4 43,2 35,8 55,1 31,5 18,0 26,4 19,6 41,4 30,1 23,5 27,1 42,8 13,8
15,6 13,5 12,0
40,00 60,00 80,00 100,00 23 74 72 77 52 50 66 57 70 60 76 32 18 28 20 44 28 26 27 43 13 15 4 27 35 47 14 57 57 55 51 45 44 43 42 36 31 26 22 18 15 12 11 9 8 8 8 7 5 2 1 1 1 1 2
40 60 80 100 120 140 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 2040-2055
Pinjaman/ Loans SBN/ Securities
[triliun Rupiah/ in trillion IDR]
Debt Maturity Profile
As of October 31, 2012 As of December 5, 2012
6
Debt Risk Indicators, 2007-2011
26.7 22.9 21.2 20.3 18.8 16.1 30.2 28.2 28.2 26.1 25.9 22.3
2007 2008 2009 2010 2011 Q3-2012
Interest Rate Risk
Variable rate ratio [%] Refixing rate [%] 16.5 17.2 13.4 12.1 10.9 11.0 46.9 52.1 47.4 46.2 45.1 44.8
2007 2008 2009 2010 2011 Q3-2012
Exchange Rate Risk
FX Debt to GDP ratio (%) FX Debt to total debt ratio (%) 10.4 10.0 9.7 9.5 9.3 9.8
2007 2008 2009 2010 2011 Q3-2012
Average Time To Maturity (ATM)-Years
Average Time to Maturity (in percentage) 6.8 6.4 7.6 7.1 8.2 8.3 19.4 18.6 20.3 20.8 22.7 22.3 30.6 31.1 33.2 34.2 34.6 33.7
2007 2008 2009 2010 2011 Q3-2012
Debt Maturing in 1, 3 and 5 Years
Maturity debt portion < 1 year (%) Maturity debt portion < 3 year (%) Maturity debt portion < 5 year (%)
7
Financing Trend, 2006 – 2012 Budget Deficit Financing
(trillion IDR)
Notes: + Based on Audited Budget Report ++ Based on Realized Budget 2011 (preliminary figure) +++ Based on Revised Budget 2012
2006+ 2007+ 2008+ 2009+ 2010+ 2011++ 2012+++ Govt Securities - net 36,0 57,2 85,9 99,5 91,1 119,9 159,6 Domestic Loan
1,0 External Loan - net (26,6) (26,6) (18,4) (15,5) (4,57) (19,2) (4,4) Others/Non-Debt - net 20,0 9,1 16,5 28,6 5,0 28,3 33,9 Budget Defisit, % to GDP 0,9 1,3 0,1 1,6 0,7 1,3 2,2
0,9 1,3 0,1 1,6 0,7 1,3 2,2 (0,5)
1,0 1,5 2,0 2,5
50 100 150 200
8
35,2% 33,1% 28,3% 26,1% 24,4% 23,2%
0% 10% 20% 30% 40% 2007 2008 2009 2010 2011 2012*
Debt to GDP Ratio and Debt Service Ratio 2005 – 2012
Debt to GDP Ratio (% of GDP) Debt Service to GDP Ratio (%) Interest Expenses to Revenue and Expenditure Ratio (%) Interest Expenses to Tax Revenue & Central Government Expenditure Ratio (%)
Notes: * Based on Revised Budget 2012
5,0% 4,0% 3,8% 3,4% 3,1% 3,3% 0% 1% 2% 3% 4% 5% 6%
2007 2008 2009 2010 2011 2012* 11,28% 9,01% 11,05% 8,88% 7,70% 10,53% 8,97% 10,00% 8,48% 7,20%
0% 2% 4% 6% 8% 10% 12% 2007 2008 2009 2010 2011
Interest to Revenue Interest to Expenditure
17,0% 14,2% 15,1% 12,2% 10,7% 11,4% 15,8% 12,8% 14,9% 12,7% 10,6% 12,2%
0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 2007 2008 2009 2010 2011 2012*
to Tax Revenue to Central Gov't Expenditure
9
Gov’t Debt Securities Issuance Plan 2012
Gov’t Debt Operation – Policy Combination
Samurai Bond)
debt securities issuance
liability management (USD bonds) Benchmark Series for 2012
Indicative Tenor in Domestic Market
* as percentage of total gross securities issuance in the domestic market ^ Retail bond
IDR (trillion) $ USD (billion) IDR (trillion) $ USD (billion)
Deficit (124,0) (12,89) (190,1) (19,75) Amortization (167,6) (17,42) (158,8) (16,50) External Loan (47) (5) (50) (5) Govt Securities (incl Buyback) (120) (12) (109) (11) Domestic Loan (0,14) (0,01) (0,14) (0,01) Non Debt Financing Expenditures (18,77) (1,95) (26,62) (2,77) Two Steps Loan (8,9) (0,93) (8,4) (0,88) Financing Needs (319,3) (33,2) (384,0) (39,9) Financing Sources 319,3 33,2 384,0 39,9 Non Debt (Gross) 9,2 0,96 60,6 6,29 Debt (Gross) 310,1 32,22 323,4 33,60 Govt Securities 254,8 26,5 268,5 27,9 Program Loan 15,3 1,6 15,6 1,6 Project Loan (Bruto) 39,0 4,1 38,1 4,0 Domestic Loan 1,0 0,1 1,1 0,1
Exchange Rate Assumption (IDR/USD 1) a.o December 7, 2012 : 9.625 IDR
2012 - Budget 2012 - Revised Budget
10
2012 Funding Strategy Progress
2012 Revised Budget
Realization (ao Dec 7, 2012)
% Realization Government Securities Maturity 2012 107.822.708 92.337.565 85,64% Government Securities Net 159.587.623 175.072.766 109,70% Buyback 1.137.527 1.137.527 100,00% Issuance Need 2012 268.547.858 268.547.858 100,00% Government Debt Securities (GDS) 211.459.053 Domestic GDS 165.441.745
122.245.000
30.520.000
12.676.745 International Bonds 46.017.308
39.005.000
7.012.308 Government Islamic Debt Securities 57.088.805 Domestic Government Islamic Debt Securities 47.449.805
17.114.000
1.380.000
13.613.805
15.342.000 International Sukuk 9.639.000 [in IDR Billion]
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Debt Issuance Program 2012
Calendar of Issuance
11
Month Date Type Tenor (sector) 1) Realization (IDR)
60.387.000.000.000 41.370.000.000.000 42.393.000.000.000 October October 2, 2012 IFR/PBS 5, 25 year SPN-S 6 month October 9, 2012 ON 15, 20 year SPN 3 month, 1 year October 16, 2012 IFR/PBS 5, 25 year SPN-S 6 month October 23, 2012 ON 5, 10 year SPN 1 year October 30, 2012 IFR/PBS 5, 25 year SPN-S 6 month November November 12, 2012 ON 15, 20 year SPN 3 month, 1 year November 27, 2012 ON 5, 10 year SPN 1 year December December 4, 2012 ON 10, 15 year SPN 3 month, 1 year 29.000.000.000.000
1) Tenor (sector) means that the tenor to be issued will be around the tenor stated in column "Tenor (sector)". 2) The total of issuance is excluding Sukuk Retail, ORI, and International Bonds.
Issuance in 3rd Quarter 2) Total Issuance in 4th Quarter 2) Issuance in 1st Quarter 2) Issuance in 2nd Quarter 2)
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Domestic Market is Arising
The amount of incoming bids for long tenor bonds from local institutional buyers (pension funds, insurance companies and mutual funds) has improved significantly in recent auctions
Others : Domestic pension funds, insurance companies and mutual funds
Increasing demand in domestic primary market align with downward trend in borrowing cost
12
24% 14% 19% 29% 35% 24% 33% 24% 35% 37% 23% 52% 48% 51% 45% 45% 51% 51% 32% 41% 49% 59%
24% 38% 30% 26% 20% 24% 16% 44% 24% 14% 17%
Foreign Local Bank & Central Bank Others Incoming Bid - Long Tenor (≥ 10 years)
24,60 53,98 48,73 95,57 189,46 136,18 198,23 315,91 393,41 430,59
11,71 23,57 22,54 39,30 70,78 66,06 79,20 101,90 138,85 152,7711,92 10,42 13,97 10,14 10,01 11,86 10,04 7,57 5,96 5,30
3 6 9 12 15
200 300 400 500
2003 2004 2005 2006 2007 2008 2009 2010 2011
2012
Total Incoming Bid Total Bid Accepted Yeild at Tenor 10 year
13
Government Debt Securities Auction in 2012
27,7 50,1 42,4 22,3 10,6 14,1 19,5 14,8 14,7 13,3 14,2 13,3 16,5 27,7 20,0 8,5 14,1 11,9 18,8 18,0 28,9 9,2 10,0 10,5 12,0 12,0 1,6 7,3 9,0 2,2 7,6 0,8 7,5 6,9 7,0 9,0 9,0
7,5 9,0 7,5 1,2 0
4 8 12 16 20 11 22 33 44 55
10 Jan 26-Jan 7-Feb 21-Feb 6-Mar 20-Mar 3-Apr 17-Apr 2-May 14-May 5-Jun 19-Jun 3-Jul 17-Jul 9-Aug 28-Aug 11-Sep 25-Sep 4-Oct 23-Oct 12-Nov 3-Dec
Incoming Bids Awarded Bids Bid to cover [RHS]
IDR Trillion
14
2,00 4,00 6,00 8,00 10,00 12,00 14,00 16,00 18,00 20,00 22,00
Jan'08 Apr'08 Jul'08 Okt'08 Jan'09 Apr'09 Jul'09 Okt'09 Jan'10 Apr'10 Jul'10 Okt'10 Jan'11 Apr'11 Jul'11 Okt'11 Jan'12 Apr'12 Jul'12 Okt'12 5Y 10Y 15Y 20Y
Global Financial Crisis
Eurozone sovereign debt crisis
Secondary Market Performance of Government Bonds
Average daily trading Yield of Benchmark Series
Average daily trading significantly increased, while yield on benchmark series steadily decreased
[In Percentage]
As of Dec 7, 2012
14
3.307 5.899 4.235 3.420 4.963 7.671 8.259 10.912 7.415 5.767 6.566 8.794 9.711 13.324 10.458 9.907 12.074 10.927
160 240 320 400 480 560 640 720
4.000 6.000 8.000 10.000 12.000 14.000 2006 2007 2008 2009 2010 2011 Jan '12 Feb '12 Mar '12 Apr'12 May'12 Jun'12 Jul'12 Aug'12 Sep'12 Okt'12 Nov'12 Dec 6 '12
Volume (billion rupiah) - LHS Frequency - RHS
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Des-08 Banks 258,75 49,2% 254,36 43,72% 217,27 33,88% 265,03 36,63% 293,16 38,54% 297,98 37,66% 317,43 39,05% 309,03 37,05% 304,02 36,43% 304,34 36,41% Govt Institutions 23,01 4,4% 22,50 3,87% 17,42 2,72% 7,84 1,08% 3,12 0,41% 20,36 2,57% 4,63 0,57% 13,62 1,63% 6,23 0,75% 3,63 0,43% Non-Banks 243,93 46,4% 304,89 52,41% 406,53 63,40% 450,75 62,29% 464,30 61,05% 472,85 59,76% 490,73 60,38% 511,88 61,36% 524,30 62,82% 527,79 63,15% Mutual Funds 33,11 6,3% 45,22 7,77% 51,16 7,98% 47,22 6,53% 46,95 6,17% 48,60 6,14% 47,01 5,78% 46,66 5,59% 45,87 5,50% 45,40 5,43% Insurance Company 55,83 10,6% 72,58 12,48% 79,30 12,37% 93,09 12,86% 100,63 13,23% 106,86 13,51% 109,54 13,48% 108,06 12,96% 108,05 12,95% 95,13 11,38% Foreign Holders 87,61 16,7% 108,00 18,56% 195,76 30,53% 222,86 30,80% 224,72 29,55% 224,42 28,37% 240,98 29,65% 250,33 30,00% 269,85 32,33% 274,35 32,83% Insurance 0,03 0,0% 0,06 0,01% 1,35 0,21% 2,94 0,41% 3,16 0,42% 2,72 0,34% 3,21 0,39% 3,32 0,40% 3,32 0,40% 3,32 0,40% Pension Fund 0,17 0,0% 1,23 0,21% 2,31 0,36% 2,76 0,38% 2,83 0,37% 3,04 0,38% 3,19 0,39% 3,26 0,39% 3,65 0,44% 3,95 0,47% Corporate 0,69 0,1% 3,66 0,63% 5,71 0,89% 6,59 0,91% 7,40 0,97% 6,87 0,87% 6,63 0,82% 7,23 0,87% 10,16 1,22% 10,41 1,25%
83,38 15,9% 78,41 13,48% 126,69 19,76% 133,63 18,47% 134,00 17,62% 130,38 16,48% 141,27 17,38% 146,15 17,51% 160,25 19,20% 163,69 19,59% Individual 0,06 0,0% 0,06 0,01% 0,10 0,02% 0,09 0,01% 0,07 0,01% 0,08 0,01% 0,09 0,01% 0,10 0,01% 0,09 0,01% 0,09 0,01% Mutual Fund 0,49 0,1% 21,53 3,70% 53,53 8,35% 68,30 9,44% 65,08 8,56% 66,97 8,46% 68,73 8,46% 70,38 8,43% 71,05 8,51% 71,05 8,50% Securities 2,67 0,5% 2,65 0,45% 4,34 0,68% 4,88 0,67% 4,36 0,57% 4,34 0,55% 5,53 0,68% 5,64 0,68% 5,61 0,67% 5,61 0,67% Foundation 0,07 0,01% 0,06 0,01% 0,02 0,00% 0,03 0,00% 0,05 0,01% 0,06 0,01% 0,07 0,01% 0,07 0,01% Others 0,11 0,0% 0,39 0,07% 1,64 0,26% 3,60 0,50% 7,78 1,02% 10,00 1,26% 12,28 1,51% 14,18 1,70% 15,64 1,87% 16,15 1,93% Pension Fund 32,98 6,3% 37,50 6,45% 36,75 5,73% 34,39 4,75% 33,93 4,46% 34,56 4,37% 34,35 4,23% 35,84 4,30% 35,29 4,23% 47,91 5,73% Securities Company 0,53 0,1% 0,46 0,08% 0,13 0,02% 0,14 0,02% 0,53 0,07% 0,27 0,03% 0,51 0,06% 0,41 0,05% 0,33 0,04% 0,30 0,04% Others 33,87 6,4% 41,12 7,07% 43,43 6,77% 53,05 7,33% 57,54 7,57% 58,14 7,35% 58,35 7,18% 70,59 8,46% 64,92 7,78% 64,70 7,74% Total 525,69 100% 581,75 100% 641,21 100% 723,61 100% 760,58 100% 791,18 100% 812,80 100% 834,53 100% 834,55 100% 835,75 100% 06-Dec-12 30-Nov-12 Oct-12 Dec-09 Dec-11 Sep-12 Dec-10 Jun-12 Mar-12
Ownership of Tradable Government Securities
In IDR Trillion
Domestic financial institutions are picking up in size, however demand for Gov’t bonds from foreign investors keep growing above the demand from financial institutions. 15
16
Foreign Investor Activity
Net Buyer (Seller) - Non Resident Foreign Ownership - Proportion by Tenor
Source: Ministry of Finance
Foreign investors mostly dominated by high quality long term investors
In IDR Trillion
2% 4% 10% 12% 13% 11% 12% 13% 11% 11% 9% 8% 10% 9% 9% 9%
5% 5% 5% 8% 8% 8% 6% 6% 7% 5% 5% 3% 1% 3% 3% 3%
23% 20% 18% 17% 17% 17% 17% 19% 18% 17% 19% 18% 19% 16% 16% 16%
17% 22% 21% 25% 24% 24% 24% 22% 25% 29% 29% 29% 29% 28% 28% 28%
53% 49% 46% 38% 38% 39% 40% 41% 39% 38% 39% 41% 41% 43% 44% 44% 17% 19% 31% 31% 32% 30% 30% 30% 29% 28% 29% 29% 30% 30% 32% 33%
0% 20% 40%
0% 20% 40% 60% 80% 100%
Dec-08 Dec-09 Dec-10 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 6-Dec- 12
>10 >5-10 >2-5 >1-2 0-1 % Kepemilikan Asing Thd Total Kepemilikan (RHS) 4,56 8,06 13,11 (8,99) (2,27) 4,15 (4,37) (0,08) 10,13 (1,41) 7,83 9,35 19,52 4,50 (0,06) (0,04) (0,02) 0,00 0,02 0,04 0,06 0,08 0,10 (15,00) (10,00) (5,00) 0,00 5,00 10,00 15,00 20,00 25,00
Dec-10 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 06-Des-12
Capital Inflows Capital Inflows of Average of Foreign Holder
17
200 400 600 800 1000 1200 1400 1600
2 4 6 8 10 12 14 16
Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12
Yield - 10 y Global Bond CDS 10 y (RHS)
400 600 800 1.000 1.200 1.400 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Indonesia Phillipine Turkey
Global Bonds Issuance Result (10 – year) & Yield Secondary Market
Cost of 10 y global bonds is declining, along side its spread over treasury
Source : Bloomberg
36% 53% 40% 30% 24% 19% 30% 24% 29% 37% 66% 35% 29% 28% 31% 21% 29% 47% 20% 27% 22% 12% 17% 31% 35% 18% 29% 49% 47% 34% 50% 49% 49% 51% 17% 34% 0% 20% 40% 60% 80% 100%
INDO-14 INDO-15 INDO-16 INDO-17 Indo-18 INDO-18 (Reopening) Indo-19 Indo- 20 INDO-21 R10142 R10422 R10142 (Reopening) 2004 2005 2006 2008 2009 2010 2011 2012Asia Europe USA
As of December 10, 2012
10Y CDS (as of Dec 10, 2012)
18
Government Securities Profile
002 & SU-004) with new bond (SU-007) and omitted indexation of SU-002 & SU-004
GOVERNMENT DEBT SECURITIES (GDS) Des '07 Des '08 Dec-09 Dec-10 Dec-11 May-12 Oct-12 Nov-12 5-Dec-12
IDR 477.747 IDR 520.995 IDR 570.215 IDR 615.498 IDR 684.618 IDR 721.522 IDR 770.974 IDR 771.516 IDR 772.716
IDR 14.669 IDR 21.503 IDR 33.386 IDR 32.307 IDR 32.412 IDR 33.212 IDR 28.332 IDR 23.883 IDR 25.083
IDR 4.169 IDR 10.012 IDR 24.700 IDR 29.795 IDR 29.900 IDR 30.700 IDR 25.820 IDR 22.620 IDR 23.820
IDR 10.500 IDR 11.491 IDR 8.686 IDR 2.512 IDR 2.512 IDR 2.512 IDR 2.512 IDR 1.263 IDR 1.263
IDR 463.078 IDR 499.492 IDR 536.829 IDR 583.191 IDR 652.206 IDR 688.310 IDR 742.642 IDR 747.633 IDR 747.633
IDR 294.453 IDR 353.558 IDR 393.543 IDR 440.396 IDR 517.142 IDR 553.247 IDR 619.887 IDR 624.879 IDR 624.879
IDR 168.625 IDR 145.934 IDR 143.286 IDR 142.795 IDR 135.063 IDR 135.063 IDR 122.755 IDR 122.755 IDR 122.755
IDR 259.404 IDR 258.160 IDR 251.875 IDR 248.432 IDR 244.636 IDR 243.463 IDR 241.056 IDR 241.056 IDR 240.144
IDR 737.151 IDR 779.155 IDR 822.090 IDR 863.930 IDR 929.254 IDR 964.985 IDR 1.012.030 IDR 1.012.572 IDR 1.012.861
USD 7.000 USD 11.200 USD 14.200 USD 16.200 USD 18.700 USD 22.950 USD 22.950 USD 22.950 USD 22.950 35.000 ¥ 95.000 ¥ 95.000 ¥ 95.000 ¥ 95.000 ¥ 155.000 ¥ 155.000 ¥
IDR 803.084 IDR 901.795 IDR 959.130 IDR 1.020.062 IDR 1.109.922 IDR 1.196.036 IDR 1.244.179 IDR 1.251.055 IDR 1.251.459 GOVERNMENT ISLAMIC DEBT SECURITIES (GIDS)
IDR 4.700 IDR 11.533 IDR 25.717 IDR 38.988 IDR 58.753 IDR 63.027 IDR 63.035 IDR 63.035
IDR 4.700 IDR 11.533 IDR 25.717 IDR 37.668 IDR 57.568 IDR 61.927 IDR 62.840 IDR 62.840
IDR 1.320 IDR 1.185 IDR 1.100 IDR 195 IDR 195
IDR 2.686 IDR 12.783 IDR 23.783 IDR 33.783 IDR 35.783 IDR 35.783 IDR 35.783
USD 650 USD 650 USD 1.650 USD 1.650 USD 1.650 USD 2.650 USD 2.650
IDR - IDR 4.700 IDR 17.643 IDR 31.561 IDR 53.950 IDR 74.535 IDR 78.892 IDR 88.488 IDR 88.488
IDR 803.084 IDR 906.495 IDR 979.458 IDR 1.064.406 IDR 1.187.655 IDR 1.304.354 IDR 1.358.854 IDR 1.375.326 IDR 1.375.730 Notes:
IDR 18.885 IDR 34.699 IDR 40.149 IDR 40.672 IDR 51.672 IDR 29.775 IDR 42.451 IDR 42.451 IDR 42.451
IDR 5.556 IDR 13.590 IDR 20.931 IDR 28.989 IDR 28.989 IDR 28.989 IDR 28.989
IDR 9.419 IDR 10.950 IDR 9.400 IDR 8.991 IDR 9.068 IDR 9.565 IDR 9.615 IDR 9.605 IDR 9.605
IDR 101,70 IDR 110,29 IDR 116,80 IDR 121,41 IDR 120,90 IDR 116,44 IDR 117,18
19
4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 20.0 22.0 1Y 2Y 3Y 4Y 5Y 6Y 7Y 8Y 9Y10Y 15Y 20Y 30Y
7 Dec '12 30 Nov '12 23 Sep '11 7 May '10 27 Oct '08 13 Sep'05 [in percentage] [in percentage]
Sources: IDMA, Bloomberg
Yield Curve of Government Securities (IDMA/Himdasun)
Tenor 7-Dec-12 30-Nov-12 23-Sep-11 7-May-10 27-Oct-08 1Y 4.02 4.11 5.29 6.64 19.37 2Y 4.52 4.61 6.01 7.10 17.35 3Y 4.65 4.74 6.13 7.45 19.93 4Y 4.73 4.78 6.54 8.03 17.17 5Y 4.76 4.86 6.69 8.77 17.46 6Y 5.03 5.06 6.81 8.93 17.05 7Y 5.13 5.16 7.08 9.03 17.06 10Y 5.33 5.36 7.43 9.29 20.91 15Y 5.91 5.90 7.83 9.89 16.65 20Y 6.24 6.22 8.20 10.46 20.27 30Y 6.41 6.40 8.29 10.55 20.37
20
Implementing Crisis Management Protocol
1
Implementing Bond Stabilization Framework
2
Enhancing coordination between government institutions and continuous dialogue with market participants
3
Pre-emptive measures
Buyback of government bonds by the DMO from the state budget Potential purchase of government bonds by State Owned Enterprises
Purchase of government bonds by the Treasury office Purchase of government bonds by the DMO from accumulated cash surplus
Specific policies in place to address crisis enacted in the 2012 budget law
4
Swap facility arrangements based on international cooperation
5
1. Indicators to determine crisis level of Government Securities Market condition (normal, aware, alert, crisis) 2. There are some indicators that are monitored:
a. Benchmark yield on Government securities b. Exchange rate c. Jakarta Composite Index (JCI) d. Foreign ownership in Government securities
3. Policies to address the crisis at every level:
a. Re-purchase Gov. securities at secondary market b. Postpone or stop the issuance of Govt. securities
Bond Stabilization Framework Crisis Management Protocol
Policies to Address and Mitigate Sudden Reversal
21
R&I – 18 October 2012 “With the global economy slowing down, Indonesia maintains relatively high economic growth. Its fiscal management remains conservative, and the government’s debt burden is kept low. The financial system has also become more stable. Greater trust in its economy has led to an increase in foreign investment, and reinforcement of the industrial bas has been progressing gradually .”
Mar-99 Nov-99 Jul-00 Feb-01 Oct-01 Jun-02 Jan-03 Sep-03 Apr-04 Dec-04 Aug-05 Mar-06 Nov-06 Jul-07 Feb-08 Oct-08 May-09 Jan-10 Sep-10 Apr-11 Dec-11
Moody's S&P Fitch
Indonesia’s credit ratings
Solid economic fundamentals have been supporting the improvement of Indonesia’s sovereign credit ratings since 2001
Rating agencies comments
International rating agencies are recognising the improvements in the Indonesian economy
B3/B-/B- B2/B/B B1/B+/B+ Ba3/BB-/BB- Ba2/BB/BB Ba1/BB+/BB+ Baa3/BBB-/BBB-
Investment grade
Rating history
CCC+/CCC+/Caa1 CCC/CCC/Caa2 Positive outlook Negative outlook Stable outlook Positive Watch Source: Moody’s, Fitch, S&P Moody’s – 18 January 2012 “Indonesia‘s cyclical resilience to large external shocks points to sustainably high trend growth…Economic strength is underpinned by gains in investment spending, improved prospects for infrastructure development following key policy reforms, and a well-managed financial system.”
Baa3 / Stable
Fitch – 15 December 2011 “The rationale behind the upgrade is improved economic performance, strengthened external liquidity, low and declining public debt ratios, and a prudent overall macro policy framework. Rapid progress in tackling structural weaknesses combined with sustained economic growth in line with or better than Fitch’s projections without a build-up of external imbalances or a severe inflation shock would enhance Indonesia’s economic and sovereign credit fundamentals and exert upward pressure on the rating.”
BBB- / Stable
JCR – 24 August 2011 “The ratings reflect (i) the country’s sustainable economic growth outlook underpinned by solid domestic demand, (ii) alleviated public debt burden brought by prudent fiscal management, (iii) reinforced resilience to external shocks stemming from accumulated foreign exchange reserves and an improved external debt management capacity.…”
BBB- / Stable BBB- / Stable
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2012 Budget Highlights – 2013 Budget Preview
Revised 2012 and proposed 2013 state budget
Manageable 2012 budget deficit of US$21.1 billion or 2.23% of GDP, 1.65% of GDP in 2013
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2012 Budget Realization
Revised Budget (APBNP) Semester I Realization % of APBNP Revised Budget (APBNP) Semester I Realization % of APBNP
1,169.9 497.0 42.5 1,358.2 593.3 43.7
1,165.3 496.9 42.6 1,357.4 592.6 43.7
878.7 387.6 44.1 1,016.2 456.8 44.9 Tax Ratio (% of GDP) 12.16 10.84
11.51 96.80
286.6 109.3 38.2 341.1 135.8 39.8
4.7 0.1 2.5 0.8 0.8 91.0 1,320.8 442.3 33.5 1,548.3 629.4 40.7
908.2 259.8 28.6 1,069.5 393.9 36.8
412.5 182.5 44.3 478.8 235.5 49.2 (44.3) 101.4 (229.2) (72.3) 13.5 (18.7) (150.8) 54.7 (36.3) (190.1) (36.1) 19.0 Deficit of GDP (%) (2.09)
(0.91)
62.4 41.4 190.1 101.6 53.5
153.6 78.9 51.3 194.5 120.9 62.1
(2.8) (16.5) 592.5 (4.4) (19.2) 434.8 SURPLUS/(DEFICIT) of FINANCING 0.0 117.1
65.5
ITEMS 2011 2012
IDR Trillion
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The Inflation Remains Under Control
0.01% (mtm) or 4.31% (yoy), while administered, volatile food and core inflation recorded at 2.74%(yoy), 6.71%(yoy) and 4.12% (yoy). Core inflation charted at low level as demand soften after Eid al- Fitr festivities and correction in the global commodity prices, as well as well-anchored inflation expectation. Meanwhile, sharp correction in the global food prices, adequate food supply, and intensive measures by the government to manage food prices was the key behind the lower volatile food inflation. Going forward, inflation is expected to remain contained and stay within its target range of 4.5% ± 1% in 2012 and 2013.
Inflation – by component
Source: Bank Indonesia
6.66% 4.59% 2.80% 4.61%
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Source: Bank Indonesia
Balance of Payments Q2/2012
account as well as higher surplus in capital and financial account. In line with previous forecast, current account deficit is expected to be lower than that in Q2-2012 due to the trade balance improvement in August 2012. Meanwhile, surplus in the capital and financial account is expected to pick up, driven by favorable portfolio inflow and Foreign Direct Investment. At the end of September 2012, international reserves reached USD110.2 billion, or equivalent to 6.1 months of imports and government’s external debt services.
Balance of Payments
30 60 90 120 150
5 10 15 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1* Q2* Q3** 2008 2009 2010 2011* 2012 Cap & Fin. Account
Overall Balance Reserves Assets (RHS) billion USD billion USD
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Exchange Rate
average depreciated by 0.64% (mtm) to Rp9,554 per USD. Pressure on Rupiah was mainly associated with strong imports that lead to high demand for foreign currency. Pressure on Rupiah was subdued as measures to boost global economy and the prospects of the Indonesia’s economy have attracted more capital inflow to Indonesia. Rupiah Exchange Rate Monthly Appre/Depr.
Source: Bank Indonesia.
Directorate General of Debt Management Ministry of Finance of The Republic of Indonesia www.dmo.or.id