Govtto Perform Prefunding at IDR 50 T

Jakarta, InfoPublik – Indonesian  government must increase funding at the beginning of the year due to deficit widening set out at 2.41 percent in the 2017 draft budget .

The government is allowed to perform prefunding by bonds issuance earlier this year. Ministry of Finance’s Director General of Finance and Risk Management (PPR) Robert Pakpahan said the government planed to withdraw IDR 50 trillion.

'' We will see financial market condition on January, whether it is more difficult  or not. If liquidity condition on December (this year) is better, there will be prefunding option,'' said Robert Pakpahan in Jakarta, Saturday (20/8).

In addition, Robert added that Director General of Finance and Risk Management (PPR) would consider tax amnesty program. As it is informed, the tax amnesty program is expected to lead the inflow of a number of repatriated funds that will be accommodated in financial instruments.

One of them is state debentures bond (SUN). "If heavy inflow occurs on December while the instrument is weak, the option is prefunding. Government will issue government bonds to absorb the repatriated funds,'' he said.

The IDR 50T at the beginning of the year will be used to finance government spending on January next year. Robert asserted, the prefunding fund will be used to address the needs that may not be covered by tax revenues.

"It's to help the management of the state treasury on 1 January 2017. Since tax revenue on January will be received after 10 January the government must prepare funds to finance the period of 1 to 10 January,” he said.

Robert said, the government decided to perform prefunding as a precaution if the budget surplus (SAL) is not sufficient to buffer next fiscal year.

As information, in addition to prefunding, the government relies on SAL. In the 2016 revised state budget (APBN-P), SAL is set at Rp 19.01 trillion. (Translator: Sugiarti)