According to the latest data from the Finance Ministry's Financing and Risk Management Office (DJPPR), foreign ownership of government securities has risen rapidly so far in 2016. In late-April 2016 foreign ownership of government securities stood at IDR 624.95 trillion (approx. USD $47 billion) - equivalent to 38.8 percent of total issued government securities - a new record high. Most of foreign funds flow into the government bonds (SUN), which currently offer an attractive yield around 8 percent. The problem is, however, that when foreigners own a high degree of the nation's securities, it makes Indonesia vulnerable to sudden capital outflows in case of global shocks.

Indonesian's government securities (Surat Berharga Negara, or SBN) consist of government bonds (Surat Utang Negara, SUN) and Sharia government bonds (Surat Berharga Syariah Negara, SBSN).

Chief Economics Minister Darmin Nasution said he is concerned about the government's rising burden with the coupon rate around 8 percent. However, he added that the government - at this point - is not considering to cut its planned bond issuances. In the first four months of 2016 the government sold IDR 293.08 trillion (approx. USD $22.2 billion) of government securities, or 52.7 percent of the full-year target (IDR 556.06 trillion) set in the 2016 State Budget.

Indonesia's debt-to-GDP ratio is currently at the safe level of 27 percent.

Indonesia's Government Securities January-April 2016:

Securities Funds
Fixed Rate Bonds IDR 96.04 trillion
Treasury bills (SPN) IDR 21.40 trillion
private placement IDR 17.11 trillion
Conventional SUN                         
IDR 134.55 trillion
Securities Funds
Auctions IDR 42.48 trillion
Sukuk Negara Ritel (SR008) IDR 31.50 trillion
Private Placement IDR 2.50 trillion
Islamic Bonds (Sukuk Negara)
IDR 76.48 trillion

Source: Kontan

Indonesia's Foreign Debt - 2016:

2016     Public Debt
    Private Debt      Total Debt
January     $143.4 billion     $164.6 billion     $308.0 billion
February     $146.9 billion     $164.6 billion     $311.5 billion

Indonesia's Foreign Debt - 2015:

2015     Public Debt
    Private Debt      Total Debt
January     $135.7 billion     $162.9 billion     $298.6 billion
February     $134.8 billion     $164.1 billion     $298.9 billion
March     $132.8 billion     $165.3 billion     $298.1 billion
April     $132.9 billion     $167.2 billion     $300.1 billion
May     $133.5 billion     $168.7 billion     $302.3 billion
June     $134.6 billion     $169.7 billion     $304.3 billion
July     $134.5 billion     $169.2 billion     $303.7 billion
August     $134.0 billion     $169.3 billion     $303.2 billion
September     $134.2 billion     $168.2 billion     $302.4 billion
October     $136.6 billion     $167.5 billion     $304.1 billion
November     $137.7 billion     $166.8 billion     $304.6 billion
December     $143.0 billion     $167.7 billion     $310.7 billion

Source: Bank Indonesia


Lex McGuir |

The government should thnk God that foreign countries wanted to buy Indonesian bonds. The foreign countries are helping Indonesia if Indonesia uses the money wisely.