Govt foreign debt drops to $61.3 billion
Govt foreign debt drops to $61.3 billion
JAKARTA (JP): The government's foreign debt amounted to US$ 61.3 billion as of September, Minister of Finance Mar'ie Muhammad in a hearing with the budgetary commission of the House of Representatives here yesterday.
Set against the $64 billion -- the total amount of official foreign debts as of May, which the central bank announced in June -- Mar'ie figure represented a significant decline.
Mar'ie said 72.2 percent of the $61.3 billion total debt consisted of overseas soft loans, 25.5 percent of export credits and the remaining 2.3 percent of commercial loans.
He said foreign loan commitments of $21.2 billion, including $2 billion in standby commercial loans, had not yet been disbursed as of September.
Most of the foreign loans, which were obtained mainly from Japan, the United States, Germany, France and multilateral institutions, such as the World Bank and the Asian Development Bank, are soft in nature with maturities of 15 years to 30 years, grace periods of five years to 10 years and interest rates of between 2.5 percent and 5.5 percent.
Mar'ie gave the explanations on the first day of his four-day hearing with the budgetary commission on the implementation of the first semester of the 1995-1996 state budget.
He told the commission that new official foreign borrowings in the next fiscal year (1996-1997) would not likely increase from the current fiscal year.
"We will instead try to early amortize the part of our foreign debt, which bears high interest rates, or more than 10 percent a year," Mar'ie added.
The minister that in anticipation of the appreciation of foreign currencies, especially the yen, the government will minimize borrowings in yen and will seek more loans in U.S dollars, or other foreign currencies.
The minister said that during the first half of 1995-1996 (April-September), net capital inflows amounted to $5.6 billion.
"The big capital inflows more than offset the current account deficit, so that the overall balance of payments ended up the first semester with a surplus of $913 million."
He added that only $100 million of the total net capital inflows consisted of official capital and the remainder consisted of foreign direct or portfolio investments.
Small
"Gross official capital inflows amounted only to $2.5 billion, while government debt installments reached $2.4 billion," he said in explaining why the net official capital inflow was so small.
Mar'ie estimated that net capital inflows in the second semester would reach $4.9 billion, of which $4.5 billion would be private capital and the rest official loans.
Most of the foreign direct capital will be invested in the electricity, chemical, textile, paper and food industries, he added.
Speaking about budget estimates, Mar'ie said internal revenues for this fiscal year could be Rp 2.9 trillion ($1.26 billion) larger than the Rp 66.2 trillion envisaged in the budget due mainly to larger than estimated tax receipts from the oil and non-oil sectors.
He said tax revenues from oil and natural gas during the first semester were estimated at Rp 7.42 trillion on the basis of an average oil price of $17.17 per barrel.
He added that though oil tax receipts might be smaller in the second semester due to expected lower oil prices, the receipt target for the whole year would still be achieved due to the larger revenues in the first semester. (13)