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Government Securities Management

April 14, 2015

Directorate of Government Debt Securities


Directorate General of Budget Financing and Risk Management
Ministry of Finance of The Republic of Indonesia

OUTLINE

1.
2.
3.

4.

Government Securities Management and Financing


Strategy
Government Securities Performance
Crisis Management Protocol & Bond Stabilization
Framework
Debt Outstanding & Risk Profile

DISCLAIMER: This presentation does not constitute or form part of and should not be construed as an offer to sell or issue or the solicitation of an offer to buy or
acquire securities of the Republic in any jurisdiction or as an inducement to enter into investment activity. No part of this presentation, nor the fact of its
distribution, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. This presentation is not
and should not be construed as financial, legal, tax, investment or other product advice.
2

Government Securities
Management and
Financing Strategy

General Strategy for Debt Financing 2015


1. Optimizes Governments securities (SBN) issuance from domestic sources to fulfill Budget need and uses

foreign debts as complimentary;


2. Determines debt instrument by taken into account of market need in regard to market development and

portfolio management;
3. Issues Retail Bond for instrument diversification and financial inclusion;
4. Optimizes foreign and domestic loan instrument to fulfill Budget need on capital expenditure;
5. Conducts active portfolio management of Government securities through, among others, debt buyback

and debt switch, in order to promote market liquidity and stability;


6. Strengthens the function of Investor Relations Unit, among others, through the proactive dissemination of

information, rapid and effective responses, and effective communication with investors and other stakeholders.

Financing Trend, 2004 2015


(trillion IDR)

300

2.5
2.3
2.2

250

2.0
1.9

1.9

200
1.6

1.5

150
1.3

100

1.1

1.1

1.0
0.9
0.7

50

0.5

0.5

0
0.1

-50
-100
Govt Securities - net
Domestic Loan
External Loan - net
Others/Non-Debt - net
Budget Defisit, % to GDP

2004
6.9
(28.1)
42.0
1.1

2005
22.6
(10.3)
(1.2)
0.5

2006
36.0
(26.6)
20.0
0.9

2007
57.2
(26.6)
9.1
1.3

2008
85.9
(18.4)
16.6
0.1

2009
99.5
(12.4)
25.5
1.6

2010
91.1
0.4
(4.6)
4.6
0.7

2011
119.9
0.6
(17.8)
28.3
1.1

2012
159.7
0.8
(23.5)
38.1
1.9

2013
224.7
0.4
(5.8)
18.1
2.3

2014*
265.0
0.5
(15.4)
(12.2)
2.2

2015**
297.7
1.7
(20.0)
(65.5)
1.9

(0.5)

Notes:
* Preliminary 2014
** Revised Budget 2015
5

Government Budget FY 2015


In billion IDR

2015
Description

Budget

% to
GDP

Revised
Budget

1,793,588.9

16.1

1,761,642.8

15.1

B. Total Expenditure
Interest Payment

2,039,483.6
151,968.3

18.3
1.4

1,984,149.7
155,730.9

17.0
1.3

D. Deficit
E. Financing
I. Non Debt
II. Debt
1. Government Securities (Net)
2. Loan (Net)
i. Foreign Loan (Net)
Disbursement
- Program Loan
- Project Loan
On Lending
Foreign Loan Principal Payment
ii. Domestic Loan (Net)
Disbursement
Domestic Loan Principal Payment
Assumptions :
GDP (trillion IDR) (Y.o.Y)
Growth (%)
Inflation (%) y-o-y
3-month-SPN (%)
IDR/USD (average)

(93,926.4)

(0.8)

(66,776.0)

(0.6)

(245,894.7)

(2.2)

(222,506.9)

(1.9)

245,894.7
(8,961.2)

2.2
(0.1)

222,506.9
(56,874.0)

1.9
(0.5)

254,855.9
277,049.8
(22,193.9)
(23,815.1)
47,037.1
7,140.0
39,897.1
(4,319.4)
(66,532.8)
1,621.2

2.3
2.5
(0.2)
(0.2)
0.4
0.1
0.4
(0.0)
(0.6)
0.0

279,380.9
297,698.4
(18,317.5)
(20,008.1)
48,647.0
7,500.0
41,147.0
(4,471.9)
(64,183.2)
1,690.6

2.4
2.5
(0.2)
(0.2)
0.4
0.1
0.4
(0.0)
(0.5)
0.0

2,000.0
(378.8)
11,146,943.0
5.8
4.4
6.0
11,900

0.0
(0.0)

2,000.0
(309.4)
11,700,808.0
5.7
5.0
6.2
12,500

Financing
sources
Revised
Budget 2015 come from debt
financing
(85.78%
from
Government Securities, 9.62%
from Loan) and the rest 4.61%
from non debt financing.

In the Revised Budget 2015


(APBN-P
2015),
deficit
is
narrowing from 2.21% to 1.91%
of GDP

% to
GDP

A. Total Revenue

C. Primary Balance

0.0
(0.0)

Despite lower budget deficit, net


debt in 2015 is higher

To maintain resilience and fiscal


sustainability

Government injects equity to SOEs


to increase their capacity to support
the achievement of the national
priority agenda

Stand-by loans are in place


to
anticipate
adverse
situations.

Government Securities Financing (Gross) 2015


(in trillion Rp)

Indicative Target
Instruments

Budget

Revised
Budget

Govt Securities (net)

277.0

297.7

Redemption

135.6

136.1

15.0

15.0

3.0

3.0

430.7

451.8

Domestic

80.0%

77.4%

Retail

9.3%

8.9%

70.7%

68.5%

20.0%

22.6%

Cash Management
Buyback
Govt Securities (gross)

Auctions
International Bond

Domestic:

Auction:

conventional securities: 23 x

Islamic securities: 22 x

Non-Auction:

Issuance targets for GDS,


Sukuk and ATM target:

GDS (SUN): 79.9%


Sukuk: 20.1%
ATM for auctions: 8.2 year

retail bonds: ORI + Sukuk Retail.

International Bonds:

Issuance of International Bonds as


complement to avoid crowding out in
domestic
market
and
provide
benchmark for corporate issuance,
consist of USD, YEN or EURO global
bonds

Maximum issuance international bond


22.6% from target gross

Front Loading strategy:


in the first semester is targeted
at 63.4%.
for domestic issuance is also
targeted at first semester at
59.2%

Benchmark Series for 2014 & 2015

FR 69 5 Y

FR 70 10 Y

FR 71 15 Y

FR 68 20 Y

Securities Financing Realization 2015


*(Million IDR)
Budget 2015*
Government Securities Net
Government Securities Maturing in 2015
-Buyback
Issuance Need 2015*

277.049.800
153.612.324
3.000.000
430.662.124

Government Debt Securities (GDS)


Domestic GDS
-Coupon GDS
-Conventional T-Bills
-Private Placement
-Retail Bonds
International Bonds
-USD GMTN
-Euro GMTN
-Samurai Bonds

Revised Budget
2015*
297.698.382
154.112.324
3.000.000
451.810.706

Realization

% Realization to

(ao April 14,

Revised Budget

2015)*

2015

160.247.753
31.199.282
191.447.035

53,83%
20,24%
0,00%
42,37%

146.082.000
95.710.000
68.960.000
23.750.000
3.000.000
50.372.000
50.372.000
-

Government Islamic Debt Securities

45.365.035

Domestic Government Islamic Debt Securities


- IFR/PBS/T-Bills Sukuk (Islamic Fixed Rated
Bond/Project Based Sukuk)
- Retail Sukuk
- Private Placement
Global Sukuk

45.365.035
20.700.000
21.965.035
2.700.000
-

*Adjusted by changes in Cash Management & Debt Switch


8

Government Securities
Performance

Government Debt Securities Primary Market


Performance 2015
120,000

Incoming Bids

Awarded Bids

Foreign Incoming Bids

Foreign Awarded Bids

% Foreign Incoming Bids (RHS)

100,000

60%

50%

Average incoming bids


2014 = Rp22,65T/auction
80,000

40%

Average awarded bids


2014 = Rp10,97T/auction
60,000

30%

40,000

20%

20,000

10%

0%
Jan-14

Feb-14

Mar-14

Apr-14

May-14

Jun-14

Jul-14

Aug-14

Sept-14

Oct-14

Nov-14

Jan-15

Feb-15

Average Foreign incoming bids 2015 is Rp7,85T, compare to period in 2014, which reached 7,58T
Average incoming bids 2015 = Rp27,41T, increased from average incoming bids 2014 = Rp22,65T
Average awarded bid 2015 = Rp11,59T while average awarded bid 2014 = Rp10,97 T.
*as of April 14, 2015

Mar-15 14-Apr-15

10

10

Government Securities Primary


Market Performance 2015
140,000

Incoming Bids

Awarded Bids

Foreign Incoming Bids

Foreign Awarded Bids

60%

% Foreign Incoming Bids (RHS)

120,000

100,000

50%

Avr. Incoming Bid


2014: 14,02T

40%

Avr . Awarded bids


2014 = 6,52T

80,000

Avr. Foreign
Incoming Bid 2014:
4,42T

30%

60,000
20%

40,000

10%

20,000

0%

Jan-14

Feb-14

Mar-14

Apr-14

May-14

Jun-14

Jul-14

Aug-14

Sep-14

Oct-14

Nov-14

Jan-15

Feb-15

Average Foreign incoming bids 2015 is Rp5,91T


Average incoming bids 2015 = Rp19,31T, increased from average incoming bids 2014 = Rp14,02T
Average awarded bid 2015 = Rp7,56T, while average awarded bid 2014 = Rp6,52T.
*as of April 14, 2015

Mar-15

14-Apr-15

11

11

Secondary Market Performance


Yields of Benchmark Series steadily decrease
[In Percentage]

(IDR Trilion)

22,00

As of April 10, 2015

Global Financial
Crisis

20,00

OUTRIGHTof the domestic


REPO bonds
BANK
REPO BI
Activities
are growing

25,00

5Y

18,00

10Y

15Y

As of April 14, 2015

20,00
7,45

20Y

15,00

7,19(5Y), 7,35(10Y), 7,6(15Y), 7,61(20Y)

14,00

4,84

Triliun

16,00

12,00

1,14

6,70

0,77

3,45

0,34

8,00

5,00

6,00

3,55

Eurozone sovereign debt crisis

4,00

0,27
0,41

0,30
0,15
2,98

1,54
0,16

0,38

5,88

5,73

0,22
4,39

7,65

0,81

10,00

10,00

0,76

0,41

10,91

11,11

7,91

0,57
9,18
6,33

5,31

Apr'15

Okt'14

Jan'15

Jul'14

Apr'14

Okt'13

Jan'14

Apr'13

Jul'13

Okt'12

Jan'13

Apr'12

Jul'12

Okt'11

Jan'12

Jul'11

Apr'11

Jan'11

Okt'10

Apr'10

Jul'10

Okt'09

Jan'10

Apr'09

Jul'09

Jan'09

Okt'08

Apr'08

Jul'08

2,00

7,19

8,80

Turn Over 10 Y Government Bond

Bid Ask Spread 10 Y Government Bond


As of April 14, 2015

70

15.00

14.12

Spread (bid-ask)

12.88

60

12.00
50

40

Spread 5.4 bps


(ask 7.245%, bid
7.,299%)

10.75

10.53

2013

2014

9.00
7.04

30

6.00

5.15

5.12

20

10

3.00

2008

2009

2010

2011

2012

12

Yield GS on peers market


[in percentage]
LCY 10 Year
Government
Bonds

Latest Yield

YTD Change (BP)

MTD
Change
(BP)

22.0

20.0

HK

1.496

-42.7

-0.6

ID

7.252

-54.4

-18.7

JP

0.343

+1.4

-6.2

KR

2.107

-49.8

-5.0

12.0

MY

3.878

-26.9

-1.6

10.0

PH

4.193

+33.0

+2.6

8.0

SG

2.053

-22.7

-22.1

6.0

18.0

16.0

TH

2.663

-6.6

-1.8

4.0

US

1.927

-24.4

+0.4

2.0

VN

6.588

-64.2

+8.3

Market Watch as of April 14, 2015


Source: Asian Bonds Online

Tenor
1Y
2Y
3Y
4Y
5Y
6Y
7Y
10Y
15Y
20Y
30Y

14.0

14-Apr-15

6.43
6.90
7.08
7.19
7.23
7.23
7.24
7.37
7.61
7.65
7.94

7-Apr-15
6.49
6.83
7.10
7.15
7.21
7.25
7.26
7.38
7.60
7.66
7.96

13-Mar-15
6.52
6.87
7.11
7.17
7.29
7.31
7.35
7.51
7.73
7.76
8.13

9-Feb-12 23-Sep-11 27-Oct-08 13 Sep'05


3.30
5.29
19.37
4.21
6.01
17.35
14.59
4.33
6.13
19.93
4.39
6.54
17.17
14.14
4.44
6.69
17.46
14.96
4.79
6.81
17.05
15.24
4.88
7.08
17.06
16.17
5.02
7.43
20.91
15.75
5.47
7.83
16.65
14.12
5.96
8.20
20.27
6.17
8.29
20.37

14 Apr '15

7 Apr '15

13 Mar '15

9 Feb '12

23 Sep '11

27 Oct '08

13 Sep'05
1Y 2Y 3Y 4Y 5Y 6Y 7Y 8Y 9Y 10Y

15Y

20Y

30Y

Source: IDMA, Bloomberg, as of April 14, 2015


13

Ownership of Tradable Domestic Government


Securities
Dec-13

`
Banks

Dec-14

Jan-15

Feb-15

Mar-15

14-Apr-15

335,43

33,70%

375,55

31,04%

372,66

29,95%

373,22

29,43%

349,26

26,75%

360,70

27,47%

44,44

4,47%

41,63

3,44%

38,37

3,08%

53,03

4,18%

85,40

6,54%

80,87

6,16%

615,38
42,50

61,83%
4,27%

792,78
45,79

65,52%
3,78%

833,42
47,16

66,97%
3,79%

841,85
47,23

66,39%
3,72%

870,83
50,19

66,71%
3,84%

871,57
52,14

66,37%
3,97%

Insurance Company

129,55

13,02%

150,60

12,45%

149,95

12,05%

150,21

11,84%

155,54

11,91%

157,42

11,99%

Foreign Holders

323,83

32,54%

461,35

38,13%

500,83

40,25%

507,67

40,03%

504,08

38,61%

506,78

38,59%

Foreign Govt's&Central Banks**

78,39

7,88%

103,42

8,55%

104,66

8,41%

106,17

8,37%

101,41

7,77%

102,10

7,78%

Pension Fund

39,47

3,97%

43,30

3,58%

43,00

3,46%

43,77

3,45%

44,73

3,43%

44,42

3,38%

0,88

0,09%

0,81

0,07%

0,65

0,05%

0,66

0,05%

0,63

0,05%

1,15

0,09%

Individual

32,48

3,26%

30,41

2,51%

28,35

2,28%

26,39

2,08%

47,63

3,65%

40,96

3,12%

Others

46,68

4,69%

60,51

5,00%

63,49

5,10%

65,93

5,20%

68,03

5,21%

68,70

5,23%

100% 1.313,14

100%

Govt Institutions (Bank Indonesia*)


Non-Banks
Mutual Funds

Securities Company

Total

995,25

100% 1.209,96

100% 1.244,45

100% 1.268,11

100% 1.305,49

In the end of January 2015, foreign investor ownership record the highest percentage of ownership, showing their
increasing appetite on the Indonesias government securities.

14

Foreign Investor Activity (yearly)


Investors Net Buy/Sell (IDR trillion)
2011
55,3
27,1
82,4

Domestic
Foreign
Total

2012
49,0
47,7
96,7

2013
121,7
53,3
175,0

2014
77,2
137,5
214,7

Foreign investors (Asing) recorded a net buy of


IDR45.6 trillion (year to date). While during the
year of 2014 Foreign net buy reached IDR137.5
trillion.

2015
57,5
45,6
103,2

Note: *) as of April 10

Foreign Net Buy/Sell up to March (YTD) & yearly total (IDR trillion)

In March 2015 foreign investor recorded net buy of


IDR42,7 trillion, thus during April net buy is
recorded IDR2.9 trillion.

42,7
45,6

2015

21,3

2014

137,5
11,1

2013

53,3

Maret

YTD

4,1
2012

47,7
4,6

2011

27,1
0

20

Source: Bank Indonesia

40

60

80

100

120

140

160

15

Foreign Investor Activity (as of April 14, 2015)


Foreign Ownership - Proportion by Tenor

Net Buyer (Seller) - Non Resident


[In IDR Trillion]

100%

45%
40,03%

90%

39,41%
37,30%

80%
70%

60%

37,80%

40,25%
38,61%

38,13%

40%
38,59%

35,66%

32,98%
72,84%

32,54%

78,29%

74,51%

1,20
39,48

40,00

1,00

35%

33,64%

30,00
30%

76,50%

Capital Inflows
50,00

75,95%

76,16%

75,25%

76,39%

76,70%

78,21%

78,81%

23,98

19,52

20,00

79,38%

13,11

25% 10,00

50%
20%

0,00
(1,49)

15%

30%

(4,99)

(10,00)
(20,00)

18,29%

10%
7,84%
0%

>5

5,20%

16,15%
5,55%

>1-5

18,43%

7,06%

18,89%
5,16%

0-1

18,90%
4,94%

19,36%

5,39%

18,96%
4,65%

18,13%

5,16%

16,79%
4,99%

15,81%
5,38%

15,68%
4,94%

5%
0%

(0,08) (1,41)
(4,37)

4,22 2,81
(0,88)

(1,76)

0,80
6,84
2,70

(19,98)

0,60

(0,37)
(3,59)

(19,84)

0,40

0,20

(29,29)

(40,00)

0,00

Aug-11
Sep-11
Oct-11
Nov-11
Dec-11
Jan-12
Feb-12
Mar-12
Apr-12
May-12
Jun-12
Jul-12
Aug-12
Sep-12
Oct-12
Nov-12
Dec-12
Jan-13
Feb-13
Mar-13
Apr-13
May-13
Jun-13
Jul-13
Aug-13
Sep-13
Oct-13
Nov-13
Dec-13
Jan-14
Feb-14
Mar-14
Apr-14
May-14
Jun-14
Jul-14
Aug-14
Sep-14
Oct-14
Nov-14
Dec-14
Jan-15
Feb-15
Mar-15
Apr-15

19,32%

(2,27)

8,44
2,68
0,68

20,15
21,34
15,77
15,95
16,10
16,49
14,67 13,17
12,49
10,13
6,43
6,08 4,82

(8,99)

10%

(30,00)

7,839,35

4,15

1,69

40%

20%

10,13

8,06

17,97

% Kepemilikan Asing Thd Total Kepemilikan (RHS)

Foreign investors mostly dominated by high quality long term investors


16

Crisis Management Protocol


&
Bond Stabilization Framework

Implement Measures to Manage External Volatility


to mitigate sudden reversals
Pre-emptive Measures

Bond Stabilization Framework

Implementing Crisis Management Protocol


(CMP)

First Line of Defense

Implementing Bond Stabilization Framework


(BSF)

States Budget

Enhancing coordination between government


institutions and continuous dialogue with market
participants
Specific policies in place to address crises
enacted in 2015 budget law
SwapCrisis
facilityManagement
arrangements based
on
Protocol
international cooperation
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

Buyback fund at DG of Budget Financing


and Risk Management
Investment fund at Government Investment
Agency (PIP) (min. level Aware)

State Owned Enterprises


(BUMN)s Budget

Related BUMNs (min. level Aware)

Social Security Organizing


Agency (BPJS)s Budget

BPJS (min. level Aware)

Second Line of Defense


States Budget

State General Treasury Account


(Rekening KUN) (min. level Alert)
Accumulated cash surplus (SAL) (min.
Level Crisis)

State Owned Enterprises


(BUMN)s Budget

Related BUMNs (min. level Alert)

Social Security Organizing


Agency (BPJS)s Budget

BPJS (min. level Alert)

Debt Outstanding &


Risk Profile

Maturity Profile Central Government Debt


as of the end of February 2015
Maturity Profile of Central Government by Instruments (in trillion IDR)
240
220
200
180
160
140
120
100
80
60
40
20
0

Gov't Securities

Loan
Gov't
Securities

25.2%

Loan

2041-2060

2040

2039

2038

2037

2036

2035

2034

2033

2032

2031

2030

2029

2028

2027

2026

2025

2024

2023

2022

2021

2020

2019

2018

2017

2016

2015

74.8%

Maturity Profile of Central Government by Currencies (in trillion IDR)


240
220
200
180
160
140
120
100
80
60
40
20
0

Foreign

Domestic
Foreign

44.1%

2041-2060

2040

2039

2038

2037

2036

2035

2034

2033

2032

2031

2030

2029

2028

2027

2026

2025

2024

2023

2022

2021

2020

2019

2018

2017

2016

2015

55.9%

Domestik

20

Outstanding Central Government Debt by Instrument


Description
a. Foreign Loan (in billion USD)

2010

2011

2012

2013

2014*)

Feb-15
Nominal

68.6

68.4

63.6

58.1

53.9

53.4

25.0%

Bilateral

42.3

42.1

37.2

31.2

26.7

26.5

12.4%

Multilateral

23.2

23.5

23.8

23.6

23.5

23.3

10.9%

Commercial

3.0

2.8

2.5

3.2

3.7

3.6

1.7%

Suppliers

0.1

0.1

0.0

0.0

0.0

0.0

0.0%

0.0

0.1

0.19

0.2

0.2

0.3

0.1%

118.4

131.0

140.8

136.3

155.2

159.7

74.8%

18.0

21.6

27.4

32.8

36.7

40.6

19.0%

100.4

109.4

113.4

103.5

118.5

119.0

55.8%

Total Central Government Debt


(in billion USD)

187.0

199.5

204.5

194.6

209.4

213.4

Total Central Government Debt


(in trilion IDR)

1,681.7

1,808.9

1,977.7

2,371.4

2,604.9

2,744.4

Exchange Rate Assumption (IDR/USD1)

8,991.0

9,068.0

9,670.0

12,189.0

12,440.0

12,863.0

b Domestic Loan (in billion USD)


c. Government Securities (in billion USD)
Foreign Currency Denominated
Rupiah Denominated

Note:
*) Preliminary Figures
21

Outstanding Central Government Debt by Currency


2010
Original Currency
IDR (in trillion)
Gov't Securities
Loan
USD (in billion)
Gov't Securities
Loan
JPY (in billion)
Gov't Securities
Loan
EUR (in billion)
Gov't Securities
Loan
Other currencies
Equivalent in Billion USD
IDR
USD
JPY
EUR
Other currencies
Total Eq. in Billion USD
Equivalent in Trillion IDR
IDR
USD
JPY
EUR
Other currencies
Total Eq. in Trillion IDR
Foreign Currency Portion
Exchange Rate Assumption USD/IDR

902.6
902.4
0.2
39.6
16.9
22.8
2,689.8
95.0
2,594.8
5.4
5.4
100.4
39.8
33.1
7.2
6.5
187.0
902.8
357.6
297.6
65.0
58.6
1,681.7
46.3%
8,991

2011

2012

993.0
1,098.0
992.0
1,096.2
1.0
1.8
43.9
49.8
20.4
25.6
23.5
24.2
2,589.8
2,498.8
95.0
155.0
2,494.8
2,343.8
5.0
4.5
5.0
4.5
----------------Multiple
109.5
43.9
33.4
6.4
6.3
199.5
993.0
397.9
302.5
58.5
57.1
1,808.9
45.1%
9,068

113.5
49.8
29.1
6.0
6.1
204.5
1,098.0
481.9
281.2
57.5
59.1
1,977.7
44.5%
9,670

2013

2014*)

1,263.9
1,261.7
2.2
56.8
31.3
25.4
2,395.3
155.0
2,228.8
4.2
4.2
Currencies

1,477.5
1,534.5
1,474.6
1,531.2
2.9
3.3
61.0
64.9
34.2
38.2
26.8
26.7
2,204.0
2,204.0
155.0
155.0
2,049.0
2,056.9
5.1
5.2
1.0
1.0
4.1
4.2
-----------------------

103.7
56.8
22.8
5.8
5.8
194.9
1,263.9
692.0
278.3
71.1
70.2
2,375.5
46.8%
12,189.0

118.8
61.0
18.5
6.2
5.0
209.4
1,477.5
758.3
229.8
76.9
62.4
2,604.9
43.3%
12,440.0

Feb-15

123.4
67.1
19.2
6.0
5.0
220.6

55.9%
30.4%
8.7%
2.7%
2.3%

1,534.5
834.2
238.5
74.2
62.8
2,744.4
44.1%
12,863.0

*) Preliminary Figures
22

Central Government Debt Ratios

5%
0%

2010

2010

2011

2012

Interest to Revenue

7,6%

10%

6,8%

2014*

15%

7,9%

2013

20%

10%
9%
8%
7%
6%
5%
4%
3%
2%
1%
0%

6,7%

2012

24,7%

7,2%

2011

24,9%

7,7%

23,0%

8,5%

23,1%

8,9%

24,5%

2013

2014*

Interest to Expenditure

Interest Payment to Tax Revenue &


Central Government Expenditure Ratio

Debt Service to GDP Ratio


4,00%

14%

2,00%
2011

2012

2013

2014*

Notes: Using GDP at Current Market Prices [2010 Version]


* Preliminary Figures

2010

2011

to Tax Revenue

2012

2013

11,2%

11,7%

9,9%

9,9%

4%
2%
0%

10,8%

6%

2,50%

2010

12,7%

8%

2,9%

12,2%

2,9%

3,00%

10%
10,6%

3,2%

3,1%

12%

10,7%

3,4%

3,50%

10,5%

25%

7,5%

30%

8,7%

Interest Payment to Revenue and


Expenditure Ratio

Debt to GDP Ratio

2014*

to Central Gov't Expenditure


23

Risk Indicators
Interest Rate Risk
28,2
22,0

26,1

Exchange Rate Risk


47,4

25,9
23,2

22,5

20,3

18,8

16,2

16,0

2010

2011

2012

Variable rate ratio [%]

2013

12,1

11,0

10,7

2012
2013
2014*
FX Debt to total debt ratio (%)

Debt Maturing in 1,3, and 5 years

9,8

20,3
9,3

7,6

2012

2013

Average Time to Maturity (in years)

2014*

20,8

22,7

8,2

7,1

2009

34,6

34,2

33,2

9,6

2011

43,3

Refixing rate [%]

9,7

2010

12,2

10,6

2009
2010
2011
FX Debt to GDP ratio (%)

2014*

9,5

2009

46,7

44,4

14,8

Average Time To Maturity (ATM) - Years


9,7

45,1

21,0

13,4

2009

46,2

2010

21,5

2011

Maturity debt portion < 1 year (%)

21,8
8,6

7,2

2012

33,9

33,4

32,4

20,2
7,7

2013

2014*

Maturity debt portion < 3 year (%)

Maturity debt portion < 5 year (%)

*Preliminary Figures

Risk indicators are improving amidst pressure from rupiah depreciation


Risk indicators show improvements in interest rate risk and stability in exchange and refinancing risks

24

Primary Market Performance 2015: Global Bonds (USD)


Allocation by Geography
RI0125

RI0145

RI0125
RI0125

Summary Terms of Offering


Issuer
Issuer Ratings
Issue Ratings

Indonesia
13%

Republic of Indonesia

Baa3 (Moodys), BB+ (S&P), BBB- (Fitch)

USD2 billion

8 January / 15 January 2015

8 January / 15 January 2015

Maturity

10 years due 15 January 2025

30 years due 15 January 2045

Coupon

4.125% payable semi annually

5.125% payable semi annually

Reoffer Yield / Price

4.200% / 99.393%

5.200% / 98.867%

Format

Rule 144A / Reg S

Rule 144A / Reg S

USA
48%

USA
53%

Total Book Order

SGX-ST

SGX-ST

USD10.05 billion

USD9.23 billion

Europe
23%

Europe
24%

Allocation by Investor Type


RI0125
Private Banks
2%
Insurance /
Pension Funds
9%

RI0145
Private Banks
2%
Insurance /
Pension Funds
13%

SWF
2%

SWF
2%

Banks
8%

Banks
14%

Listing

Asia
20%

USD fixed rate


USD2 billion

Pricing / Settlement Date

Indonesia
4%
Asia
15%

Baa3 Stable (Moodys), BB+ Stable (S&P), BBB- Stable (Fitch)

Issue
Size

RI0145

RI0145

Fund / Asset
Managers
73%

Fund / Asset
Managers
75%

25

END OF PRESENTATION
Directorate General of Budget Financing and Risk Management
Ministry of Finance of Republic of Indonesia
Directorate of Government Debt Securities
Frans Seda building, 4th floor,
Jl. Wahidin Raya No. 1, Jakarta Pusat Postal Code: 10710
Phone: +6221 3810175
Fax. : +6221 3846516
Website: www.djpu.kemenkeu.go.id

Key Initiatives to Develop Domestic Gov. Securities


Market
Facilitating the development of derivative instrument and Government securities repo:
Develop a deep and liquid repo market, coordinate with FSA
Facilitating the development of Government Bond Futures

Focused on a few benchmark series with large outstanding


Introduction of an electronic trading platform (ETP)
Strengthening Investor Relations (IR)

Launch a new primary dealer system


Increase domestic participation from key investors
Continuously improving bond stabilization framework
27

Securities Financing Realization 2014


*(Million IDR)
Revised Budget
2014*
Government Securities Net
Government Securities Maturing in 2014
-Buyback
Issuance Need 2014*

264,983,700
163,151,013
1,350,968
428,134,713

% Realization to

Realization
(ao Dec 31, 2014)*

264,978,114
163,151,013
1,350,968
428,129,127

Government Debt Securities (GDS)

352,588,379

Domestic GDS
-Coupon GDS (Auction, Private Placement)
-Conventional T-Bills (Auction, Private Placement)
-SPNNT 20140303
-Retail Bonds
International Bonds
-USD Global Bonds
-USD Domestic Bonds
-Euro Denominated Bonds

284,376,795
199,870,000
48,500,000
12,400,000
23,606,795
68,211,584
48,466,366
3,985,450
15,759,767

-Samurai Bonds

Revised Budget Remaining target*


2014

100.00%
100.00%
100.00%
100.00%

5,586

Government Islamic Debt Securities

75,540,748

Domestic Government Islamic Debt Securities


- IFR/PBS/T-Bills Sukuk (Islamic Fixed Rated Bond/Project Based Sukuk)
- Retail Sukuk
Global Sukuk

57,794,345
38,471,000
19,323,345
17,746,403

*Adjusted by changes in Cash Management & Debt Switch


28

Domestic Institutional Investors


Insurance Company

Pension Fund
180
150

Rp169.53
27.91%

120

Rp156.45
27.43%

Rp108.39

Rp141.51

21.90%

Rp164.15 Rp167.23

600

30.00%

Rp545.54

27.09%
24.11%

24.01%

500
Rp136.53
20.00%
19.68%
18.36%

Rp90.11

19.46%

19.74%

400

30.00%

Rp497.03 Rp497.99

21.77%

22.64%

Rp567.13

21.02%
20.00%

Rp356.45 Rp361.37
Rp326.23

18.33%

300

90

12.95%

Rp241.67

60

13.98%

200

10.00%

10.00%

100

30
0

0.00%
2008

2009

2010

2011

2012

Govt. Securities (GS)


Deposit
Mutual Funds

2013

Mar-14

0.00%

2008

Jun-14

Bond
Stock
Others

2009
2010
Govt. Securities (GS)
Deposit
Mutual Funds

2011

2012

2013
Bond
Stock
Others

Mar-14

Jun-14

Mutual Fund
270

60%
244.32

240
50%

210

45%

180

180.28

37%

33%

150

40%

159

28%
120

110.13

30%

25%

142.97

20%
90

20%
71.48

60
10%

30

Source: Financial Service Authority (OJK), data


processsed

0%

Government Securities (GS)

Deposit

Bond

Stock

Others

% SBN (RHS)

29

Individual & Retail Investors


Individual Ownership
4.00%

3.65%

Nominal (IDR Trillion) RHS

60
50

3.28%
2.51%

2.50%

2.28%

40

2.08%

50,000

47,434

45,000

Percent

3.50%
3.00%

Retail Govt Securities investors in primary market

40,000
35,000

1.50%

23,617

30

25,000

20

20,000 16,561

10

0.50%
0.00%

0
December 2013

Dec, 2014

Jan, 2015

Feb, 2015

March 27, 2015

23,127
14,295 17,231 15,487
15,239 15,198

15,000

1.00%

34,692
32,638
29,706

30,000

2.00%

34,776

33,546

17,606

17,783

10,000

6,412

5,000
-

2006

2007

2008

2009

Conventional Retail bonds

2010

2011

Islamic Retail bonds

2012

2013

2014

2015

Retail Saving bonds

30