Not Only Relying On The State Budget, Now Local Governments Are Encouraged To Apply For Loans To The Central Government

Illustration. (Photo: By courtesy)

JAKARTA - The Ministry of Finance (Kemenkeu) through the Directorate General of Fiscal Balance (DJPK) revealed that the central government has currently received a letter of proposal for local government (Pemda) PEN loans with a total loan value of IDR 48 trillion for the 2021 fiscal year.

Director of Capacity and Transfer Implementation of the Ministry of Finance's DGT, Bhimantara Widyajala, said that this year the allocation of regional PEN loan funds sourced from the state budget (APBN) is IDR 10 trillion. Meanwhile, regional loan funds in order to support the PEN program sourced from PT Sarana Multi Infrastruktur (SMI) amounting to IDR 5 trillion.

"The government will continue to review policies in providing stimulus so that it is right on target and on target to keep the wheels of the Indonesian economy moving and the national economy recovering", he said in an official statement, Tuesday, March 30.

Bhimantara added that SMI as an extension of the Ministry of Finance focuses on monitoring and evaluating regional PEN loans while maintaining the principles of good governance.

"I hope that regional heads can use all their resources to supervise the implementation of activities funded by regional PEN loans," he said.

To note, the PEN (National Economic Recovery) loan is alternative financing for regions in funding priority activities, especially in dealing with the impact of the pandemic.

"This instrument is basically a potential alternative financing scheme and is very likely to be implemented by local governments in order to overcome the regional budget (APBD) deficit and limited regional financial capacity", he explained.

In order to smooth out this strategy, the government then took PT Sarana Multi Infrastruktur as a business entity that provides regional PEN loan facilities.

For information, the government has consistently strived to accelerate the process of national economic recovery through the pouring of hundreds of trillions of funds to overcome the impact of the pandemic.

VOI editorial team noted that in the 2021 State Budget, the state budgeted for PEN funds amounting to IDR 699.4 trillion. This amount is distributed to several sectors, namely the health sector IDR 176.3 trillion, support for MSMEs, and cooperatives IDR 184.8 trillion, priority programs IDR 122.4 trillion, incentives for the business world IDR 58.4 trillion, and social protection IDR 157.4 trillion.

The realization of the 2020 PEN fund is known to be IDR 579.8 trillion, or 83.4 percent of the total budgeted budget, which is IDR 695.2 trillion.