GOVERNMENT SECURITIES MANAGEMENT

Transcription

1 GOVERNMENT SECURITIES MANAGEMENT MAY 17, 2017 DIRECTORATE OF GOVERNMENT DEBT SECURITIES DIRECTORATE GENERAL OF BUDGET FINANCING AND RISK MANAGEMENT MINISTRY OF FINANCE OF THE REPUBLIC OF INDONESIA

2 DEBT FINANCING STRATEGY 2017

3 2017 STATE BUDGET Indicator Realization 1 Budget Economic growth (%, yoy) Inflation (%, yoy) Month Treasury Bill (SPN) (%) Exchange Rate (IDR/USD) 13,305 13,300 ICP (USD/barrel) Oil Production (thousand barrel/day) Gas Production (thousand barrel oil equivalent/day) 1,184 1,150 Credible and realistic budget with 2016 outlook number used as a base for formulating the 2017 State Budget Tax revenue grew 3.6%, between 2015 and 2016, which includes the contribution of IDR tn from tax amnesty Improved efficiency in government expenditure Discipline in managing budget deficit Description (IDR tn) Revised Budget Outlook Realization 1 % realization to revised budget % realization to outlook State budget % growth to realization A. Revenues and grants 1, , , % 98.3% 1, % I. Domestic revenue 1, , , % 97.9% 1, % 1. Tax revenue 1, , , % 97.3% 1, % 2. Non tax revenue % 100.5% % II. Grants % 410.0% % B. Expenditure 2, , , % 98.0% 2, % I. Total Central government expenditure 1, , , % 96.2% 1, % 1. Ministerial spending % 101.3% % 2. Non ministerial spending % 89.7% % II. Transfer to region and village Fund % 101.0% % 1. Regional transfer % 100.7% % 2. Village fund % 105.7% % C. Primary balance % 97.1% % D. Surplus (deficit) % 96.7% % % of GDP -2.35% -2.50% -2.46% 104.7% 98.4% -2.41% -2.0% E. Financing % 104.7% % 3

4 BUDGET FINANCING BREAKDOWN IN 2017 Redemption IDR350.9tn (eq. USD 26.3bn) Breakdown of budget financing IDR tn USD bn Government debt (net) Non-Debt Financing IDR54.5tn (eq. USD 4.1bn) Debt (Gross) IDR735.6tn (eq. USD 55.2bn) Budget Financing IDR330.2tn (eq. USD 24.8bn) Government securities (net) Domestic loans (net) Foreign loans (net) USD/IDR: 13,321 as of 31 Mar 2017 Source: Ministry of Finance Note: Subject to change in market conditions and other factors 4

5 GOVERNMENT SECURITIES INDICATIVE FINANCING PLAN FOR 2017 Instruments Indicative Target (IDR tn) 2017 Budget Government Securities (Net) 399,993 Redemption 162,842 Cash Management 119,000 Buyback 3,000 Government Securities (Gross) 684,835 Composition Domestic 79% Auction 93% Non-Auction 7% International Bond 21% Front loading issuance for budget financing Pre-funding to optimize cost ahead of potential Fed rate hike Anticipate developments in global environment Government Securities target for 1 st semester 2017 is 57.4% from gross issuance target; Government Securities target in Rupiah for 1 st semester 2017 is 42.7% from gross issuance target. Domestic Issuance Weekly Auction: Conventional Securities: 24x Islamic Securities: 24x Non-Auction: Retail bonds Private Placements: Based on request International Bonds Issuance (USD, EUR, JPY-denominated) Issuance of International Bonds as complement to avoid crowding out in domestic market consists of USD, YEN or EURO global bonds; International bond issuance can be maximized up to 25% from gross target, depends on financing need. Issuance targets for GDS, Sukuk and ATM target Government Debt Securities (SUN): 71 %; Sukuk : 29% ATM for Government Securities (SBN): 6-8 years. 5

6 2017 SECURITIES FINANCING REALIZATION (In Million IDR) Budget 2017 Budget Realization (as of May 12, 2017) % Realization to Budget 2017 Government Securities Net % Government Securities Maturing in 2017 and Buyback % Issuance Need for 2017* % Government Debt Securities (GDS) IDR Denominated GDS Coupon GDS Conventional T-Bills Private Placement - -Retail Bonds - International Bonds USD GMTN Euro GMTN - -Samurai Bonds - -Domestic Foreign Denominated Bonds Government Islamic Debt Securities Domestic Government Islamic Debt Securities IFR/PBS/T-Bills Sukuk (Islamic Fixed Rated Bond/Project Based Sukuk) Retail Sukuk Private Placement Global Sukuk *Adjusted with issuance related to cash management realization. 6

7 GOVERNMENT SECURITIES PERFORMANCE

8 GDS PRIMARY MARKET PERFORMANCE 2017 THROUGH AUCTION [In Trillion IDR ] Incoming Bids Awarded Bids % Bid to Cover Ratio (RHS) 4.72 as of May 9, 2017 Average incoming bids 2017 = IDR38.07T/auction Average awarded bids 2017= IDR17.01T/auction Average Incoming Bid 2016 = IDR25.55T while Average Awarded Bid 2016 = IDR13.37T 8 8

9 GS PRIMARY MARKET PERFORMANCE 2017 THROUGH AUCTION [In Trillion IDR ] 200 as of May 16, Incoming Bids Awarded Bids % Bid to Cover Ratio (RHS) Average Awarded bids 2017 = IDR11.43T/auction Average Incoming Bid 2017 = IDR26.98T/auction Jan-16 Feb-16 Mar-16 Apr-16 Mei-16 Jun-16 Jul-16 Agust-16 Sep-16 Okt-16 Nop-16 Des-16 Jan-17 Feb-17 Mar-17 Apr May-17 Average Incoming Bid 2016 = IDR19.05T, while Average Awarded Bid 2016 = IDR9.37T - 9 9

10 SECONDARY MARKET PERFORMANCE (%) Yields of Benchmark Series Average Daily Trading As of May 12, OUTRIGHT REPO BANK REPO BI As of May 10, 2017 Source: IBPA Jan-17 Feb-17 Mar-17 Apr-17 s.d. 10 Mei' LCY 10 Year Government Bonds (as of May 17, 2017) Peers 10y Govt Bonds Yield Latest Yield YTD Change (BP) MTD Change (BP) HK ID JP KR MY PH SG TH US VN Foreign Ownership V. 10Y Yield Movement [%] [Rp Triliun] Non Residen [RHS] Yield 10 Y [LHS] 0 0 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 10

11 OWNERSHIP OF TRADABLE DOMESTIC GOVT SECURITIES Description Dec-14 Dec-15 Jun-16 Dec-16 Jan-17 1) Non Resident consists of Private Bank, Fund/Asset Manager, Securities Company, Insurance Company, and Pension Fund. 2) Others such as Securities Company, Corporation, and Foundation. *) Including the Government Securities used in monetary operation with Bank Indonesia. **) net, excluding Government Securities used in monetary operation with Banks. (in trillion IDR) Banks* % % % % % % % Govt Institutions (Bank Indonesia**) % % % % % % % Bank Indonesia (gross) % % % % % GS used for Monetary Operation % % % % % Non-Banks % % % % % % % Mutual Funds % % % % % % % Insurance Company % % % % % % % Foreign Holders % % % % % % % Foreign Govt's&Central Banks % % % % % % % Pension Fund % % % % % % % Individual % % % % % % % Others % % % % % % % Total 1, % 1, % 1, % 1, % 1, % 1, % 1, % Apr May-17 11

12 FOREIGN INVESTOR ACTIVITY FOREIGN INVESTORS MOSTLY DOMINATED BY HIGH QUALITY LONG TERM INVESTORS Foreign Ownership - Proportion by Tenor Monthly Net Buyer (Seller) - Non Resident [In Trillion IDR ] As of May 12, % 80% 44.5% 42.8% 44.7% 36.0% 38.8% 39.2% 39.75% 40.32% 60% 40% 32.5% 38.1% 38.2% 37.5% 37.8% 38.2% 39.1% 38.5% 32.0% 33.6% 37.4% 38.0% 36.9% 36.26% 36.50% 20% 0% 39.0% 12.9% 17.8% 12.65% 15.2% 17.8% 16.7% 12.85% 11.8% 5.4% 3.7% 5.91% 5.85% 5.3% 1.9% 1.3% 2.0% 5.2% 4.6% 3.2% 3.5% 3.4% 5.2% 5.43% 4.48% Dec 13 Dec 14 Dec-15 Dec-16 Jan-17 Mar-17 Apr May %Foreign Ownership of Total 12

13 INVESTOR TYPE LOCAL INSURANCE AND PENSION FUND INCREASED THEIR GOVT SECURITIES PORTFOLIO SIGNIFICANTLY Others [In trillion IDR] Individual Pension Fund Insurance Company Foreign Holders Mutual Fund Bank Indonesia** Banks* NET BUY 2016 NET BUY 2015 *) Net, excluding Government Securities used in monetary operation with Banks. **) Gross, including the Government Securities used in monetary operation with Bank Indonesia. 13

14 DOMESTIC INSTITUTIONAL INVESTORS FSA (OJK) Regulation No 1/POJK.05/2016* on Investment in Government Securities for Non-Bank Financial Institution Life Insurance Company General Insurance, Reinsurance & Guarantee Company Employer Pension Fund BPJS Ketenagakerjaan (The Social Security Administration Body for Employment) BPJS Kesehatan (Healthcare Social Security Agency) Min. 20% of total investment ( by Dec ). Min. 10% of total investment ( by Dec ). Min. 20% of total investment ( by Dec ) Min. 50% of total investment of Employment Social Security Fund (by Dec ). Min. 30% of total investment of BPJS Kesehatan (by Dec ). Min 30% of total investment ( by Dec ). Min. 20% of total investment ( by Dec ). Min 30% of total investment ( by Dec ). Min. 30% of total portfolio investment of BPJS Ketenagakerjaan (by Dec ) *Since November 14, 2016 this regulation is revised to be FSA (OJK) Regulation No.36/POJK.05/2016. The revised regulation has added SOE infrastructure bonds as instrument other than Gov t Securities that can be utilized to fulfill the minimum investment requirement. 14

15 IMPLEMENT MEASURES TO MANAGE EXTERNAL VOLATILITY TO MITIGATE SUDDEN REVERSALS Pre-emptive Measures Implementing Crisis Management Protocol (CMP) Implementing Bond Stabilization Framework (BSF) Enhancing coordination between government institutions and continuous dialogue with market participants Specific policies in place to address crises enacted in 2017 budget law First Line of Defense State s Budget State Owned Enterprises (BUMN) s Budget Bond Stabilization Framework Buyback fund at DG of Budget Financing and Risk Management Investment fund at Public Service Agency (BLU) (min. level Aware) Related BUMNs (min. level Aware) Swap facility arrangements based on international cooperation Crisis Management Protocol Indicators to determine crisis level of Government Securities Market condition (normal, aware, alert, crisis) Several market indicators that are monitored daily: - Yield of benchmark series; - Exchange rate; - Jakarta Composite Index; - Foreign ownership in government securities Policies to address the crisis at every level : - Repurchase the government securities at secondary market - Postpone or stop the issuance Social Security Organizing Agency (BPJS) s Budget Second Line of Defense State s Budget State Owned Enterprises (BUMN) s Budget Social Security Organizing Agency (BPJS) s Budget BPJS (min. level Aware) State General Treasury Account (Rekening KUN) (min. level Alert) Accumulated cash surplus (SAL) (min. Level Crisis) Related BUMNs (min. level Alert) BPJS (min. level Alert) 15

16 DEBT OUTSTANDING & RISK PROFILE

17 TOTAL DEBT MATURITY PROFILE A.O. END OF APRIL, 2017 Maturity Profile of Central Government by Currencies (in trillion IDR) Domestic Foreign 58% Foreign 42% Domestic Maturity Profile of Central Government by Instruments (in trillion IDR) Loan Gov't Sec 20% Gov't Sec 80% Loan 17

18 OUTSTANDING CENTRAL GOVERNMENT DEBT BY INSTRUMENT Description Nominal % a. Foreign Loan (in billion USD) % Bilateral % Multilateral % Commercial % Suppliers % b Domestic Loan (in billion USD) % c. Government Securities (in billion USD) % Foreign Currency Denominated % Rupiah Denominated % Total Central Government Debt (in billion USD) *) Apr. 17**) Total Central Government Debt (in trilion IDR) Exchange Rate Assumption (IDR/USD1) GDP (in trillion IDR) Debt to GDP Ratio 23.1% 23.0% 24.9% 24.7% 27.4% 28.3% Note: *) Preliminary figures **) Exclude accrued interest 18

19 OUTSTANDING CENTRAL GOVERNMENT DEBT BY CURRENCY Description *) Apr. 17**) Original Currency IDR (in trillion) Gov't Securities Loan U SD (in billion) Gov't Securities Loan JPY (in billion) Gov't Securities Loan EU R (in billion) Gov't Securities Loan Other currencies Multiple Currencies Equivalent in Billion USD IDR % U SD % JPY % EU R % Other currencies % Total Eq. in Billion USD Equivalent in Trillion IDR IDR U SD JPY EU R Other currencies Total Eq. in Trillion IDR Foreign Currency Portion 45.1% 44.5% 46.8% 43.4% 44.5% 42.5% 41.5% Exchange Rate Assumption USD/IDR Note: *) Preliminary figures **) Exclude accrued interest 19

20 10.7% 10.3% 10.5% 11.6% 12.6% 13.0% 10.6% 9.9% 9.9% 11.1% 13.2% 16.1% 7.7% 7.2% 7.5% 6.7% 7.9% 6.8% 8.6% 7.5% 10.3% 8.6% 10.7% 8.9% CENTRAL GOVERNMENT DEBT RATIOS Debt to GDP Ratio Interest Payment to Revenue and Expenditure Ratio 30% 25% 20% 15% 10% 5% 4% 3% 2% 1% 0% 5% 0% 23.1% 23.0% 2.9% Debt Service to GDP Ratio 3.2% 24.9% 24.7% 2.9% 3.5% Notes: Using GDP at Current Market Prices [2010 Version] 27.4% 28.3% % Interest Payment to Tax Revenue & Central Government Expenditure Ratio 4.1% % 10% 8% 6% 4% 2% 0% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% to Revenue to Expenditure to Tax Revenue to Central Gov't Expenditures 20

21 DEBT RISK INDICATORS Interest Rate Risk Variable Rate Ratio (%) Refixing Rate (%) Exchange Rate Risk FX Debt to GDP Ratio (%)** FX Debt to Total Debt Ratio (%) *) Mar-17 Debt Average Time to Maturity *) Mar-17 Debt Maturing ATM (in years) In < 1 year In < 3 year In < 5 year *) Mar *) Mar-17 *) Preliminary figures **) Using GDP assumption in 2017 Budget -Risk indicators are improving amidst pressure from rupiah depreciation -Risk indicators show improvements in interest rate risk and stability in exchange and refinancing risks 21

22 END OF PRESENTATION Directorate General of Budget Financing and Risk Management Ministry of Finance of The Republic of Indonesia Directorate of Government Debt Securities Frans Seda building, 4 th Floor Jl. Wahidin Raya No. 1, Jakarta Pusat Postal Code: Phone: Fax. : Website: