Pay Debt Falling Tempo 2025, Government Uses Hole Cover Scheme

SERANG - The Ministry of Finance (Kemenkeu) noted that the maturity profile of government debt in 2025 reached Rp800.33 trillion, consisting of the maturity of Government Securities (SBN) of Rp705.5 trillion and a loan maturity of Rp94.83 trillion.

Director of Strategy and Portfolio Financing of the Ministry of Finance, Riko Amir, said that the debts would be repaid because the government had the ability to finance deficits and debts.

"Every debt due must be paid, so until now we have not made any more negotiations that we will be in installments again (asking for additional time). We still have the ability to pay the deficit plus the debt is due," Riko said in the media gathering of the Ministry of Finance 2024, Thursday, September 26.

Riko explained that the source of funding for debt payments, one of which came from refinancing, namely a funding scheme by applying for a new loan with a smaller interest.

This strategy was carried out by issuing government bonds to pay the maturing debt.

"With the principle of refinancing. Because of the reflection, our credit rating is the investment grid, which states that our economic foundation is good enough to make us still able to refinancing the debt that has matured," he explained.

To note, the Ministry of Finance (Kemenkeu) noted that the position of government debt until August 2024 was IDR 8,461.93 trillion, down IDR 40.76 trillion when compared to the end of July 2024 which amounted to IDR 8,502.69 trillion.

Based on the State Revenue and Expenditure Budget (APBN) document, the ratio of government debt to Gross Domestic Product (GDP) was 38.49 percent or decreased when compared to the previous month which was 38.68 percent.

The debt ratio recorded until the end of August 2024 is still below the safe limit of 60 percent of GDP in accordance with Law Number 17 of 2023 concerning State Finance.

Until the end of August 2024, the government's debt maturity profile is quite safe with a weighted average maturity at 7.95 years.

Interest rate risk and exchange rate risk are also under control, using fixed interest rates (80 percent total debt) and in rupiah (72.12 percent total debt).

This is in line with the general policy of debt financing to optimize domestic financing sources and utilize foreign debt as a complement.

"Disciplinary government debt management also supports the results of the credit rating assessment of Indonesia's sovereign rating," he wrote.

For information, based on instruments, the composition of government debt is dominated by State Securities (SBN) instruments whose contributions are 88.07 percent.

Until the end of August 2024, the issuance of SBN was recorded at IDR 7,452.56 trillion divided into domestic SBN and foreign currency SBN (foreign currency).

Meanwhile, the Domestic SBN was recorded at IDR 6,063.41 trillion, which was divided into Government Securities (SUN) amounting to IDR 4,845.68 trillion and State Sharia Securities (SBSN) amounting to IDR 1,217.73 trillion.

Meanwhile, the remaining foreign exchange (valas) SBN of Rp. 1,389.14 trillion was divided into Government Securities worth Rp. 1,025.14 trillion and State Sharia Securities of Rp. 364 trillion.