Seeking Alternative APBN Financing Sources, Purbaya to Issue Panda Bond in June 2026

Jakarta, VIVA – Finance Minister Purbaya Yudhi Sadewa is set to issue global debt securities denominated in Yuan, or Panda Bonds, in June 2026. He stated that he has received a report from the Director General of Risk Management and Financing (DJPPR) of the Ministry of Finance, Suminto, urging an immediate trip to China. “Possibly next month (for the Panda Bond issuance), but Mr Suminto has already invited me to China,” Purbaya said in the Kebon Sirih area, Central Jakarta, on Wednesday, 6 May 2026. He explained that issuing Panda Bonds is a diversification strategy to make the APBN more robust by not depending on a single source. For the record, budget financing realisation was recorded at Rp 257.4 trillion as of 31 March 2026, consisting of debt financing of Rp 258.7 trillion and non-debt financing of Rp 1.3 trillion. “We continue to diversify so as not to depend on financing from the United States or Western countries,” he said. Purbaya explained that China has sufficient liquidity and a large-capacity financial market, making it capable of absorbing Indonesian government debt instruments. Additionally, China’s financial market offers competitive yields, ranging from 2.3 per cent to 2.5 per cent. Another potential factor is Purbaya’s confidence that the Chinese market has strong trust in Indonesia’s economic fundamentals, so its assessment is not vulnerable to credit rating influences. He also mentioned having met with the Industrial and Commercial Bank of China (ICBC), where China expressed readiness to participate in the Panda Bond issuance. “We have been in contact with ICBC; they are ready to proceed,” he said. As a reciprocal gesture for the intent to issue Panda Bonds, the Indonesian Government is also opening opportunities for China to issue debt securities or bonds in the domestic market. This option emerged in bilateral discussions between Purbaya and Chinese Finance Minister Lan Fo’an on the sidelines of the IMF-World Bank Spring Meeting from 13-17 April in Washington, DC, United States. According to Purbaya, this step can provide opportunities for Indonesian investors to access Chinese debt instruments while expanding bilateral financing cooperation between the two countries.