Patriot Bond and Merah Putih Bond Seen as Expanding National Financing Sources
The government is continuously seeking new sources of financing to support development while reducing dependence on foreign funding. The presence of Patriot Bond and Merah Putih Bond is considered a potential alternative to strengthen national financing, provided they are supported by legal certainty and good governance.
Constitutional law expert Radian Syam assessed that the two instruments, regulated under Law Number 4 of 2026 concerning Amendments to Law Number 4 of 2023 on the Development and Strengthening of the Financial Sector (P2SK), aim to broaden sources of development financing. “Patriot Bond and Merah Putih Bond are policy instruments that, in principle, have a positive objective. This is part of an alternative for national development financing,” Radian said.
According to Radian, from a constitutional law perspective, the regulation of Patriot Bond and Merah Putih Bond is part of the open legal policy of the legislature. The House of Representatives (DPR) and the government have the authority to formulate policies to expand state financing sources. However, Radian noted that the effectiveness of these instruments will be determined by their implementation. Therefore, the government needs to promptly issue implementing regulations to provide legal certainty.
“The main concern lies not in the existence of the instrument, but in the quality of the implementation of Article 50A. The mandate of the law must be immediately followed up through a government regulation to provide legal certainty, governance, transparency, supervisory mechanisms, and protection for the interests of both the state and investors,” he said.
Radian also assessed that the government’s effort to attract the repatriation of funds held by Indonesian citizens abroad is a rational step. According to him, the entry of these funds into the domestic financial system has the potential to increase liquidity while supporting the financing of national strategic projects. “Domestic liquidity will certainly increase and provide benefits for development financing. This instrument also serves as an alternative for diversifying financing sources so that dependence on external financing can be reduced. We certainly do not want to continuously rely on foreign debt,” he said.
He added that it is inaccurate to view Patriot Bond and Merah Putih Bond merely as a parking place for funds. What is more important is the strengthening of regulations, risk management, and coordination between the government, the Financial Services Authority (OJK), and Bank Indonesia. Radian stated that investor interest in both instruments will heavily depend on legal certainty, transparency, and accountability in their execution. “Investors need legal certainty. They want to ensure their invested money is safe and their business activities are protected. I am optimistic that Patriot Bond and Merah Putih Bond will attract investors, whether foreign, domestic, or from the Indonesian diaspora, if the government can provide legal certainty, transparency, and accountability in their implementation,” Radian concluded.