The medium-term debt management program in 2016 – 2018
14:59 05/07/2017
The medium-term debt management program in 2016 – 2018 period is approved on April 20, 2017.
Program’s objectives:
a) General objectives:
Mobilize capital with appropriate costs and level of risks and satisfy the requirements for balancing the state budget and social – economic development in each period; allocate and use loan capital for proper purposes and guarantee the solvency; keep the indices of public debts, government debts and foreign debts of the country within the safe limit; and ensure the national financial security in conformity with the reality of Vietnam and international practices.
b) Specific objectives:
- Gradually reduce domestic and foreign loans taken to make up state budget deficits. The state budget deficit is expected to be reduced to 5.4% of GDP in 2016; the central-government budget deficit is expected to be reduced to approximately 3.38% of GDP in 2017 and 3.3% of GDP in 2018.
- Significantly cut down on government-backed loans by minimizing the provision of government guarantee to new applicants; control the issuance of government-backed bonds by two banks for social policies at the limit of not exceeding the annual debt repayment amount; control the annual net disbursement granted to in-progress programs/projects at 1,000 USD/year.
- Minimize risks of refinancing, liquidation, exchange rate, and currency, set up the mechanism to boost the development of government bond market and strive for extension of loan term by issuing domestic government bonds for the period 2016-2018; the expected average loan term is expected to hit 6 – 8 years, and the rate of bonds issued with a term of 5 years or longer is expected to reach at least 70% of total volume of issued government bonds.
- Maintain public debts (including government debts, government-guaranteed debts and local government debts) less than 65% of GDP, in which the outstanding government debt is less than 54% of GDP and the outstanding foreign debt of the whole country is less than 50% of GDP.
- Maintain total amount of debts payable by the Government in the year (excluding on-lend amount) less than 25% of total state budget revenues, and total amount of national foreign debts payable in the year less than 25% of the value of exported goods and services.
- Maintain the annual ratio of the national foreign exchange reserves to total amount of outstanding short-term foreign debts of the country more than 200%.
- The Government loans mobilized to offset the state budget deficit is approximately VND 606.4 trillion, including VND 247.2 trillion in 2016, VND 172.3 trillion in 2017 and VND 186.9 trillion in 2018.
- Total amount of loans for repayment of principals to the central-government state budget are approximately VND 414.4 trillion, including VND 132.4 trillion in 2016, VND 144 trillion in 2017 and VND 138 trillion in 2018. New loans used for repaying annual principals shall be decided by the National Assembly as reported by the Government and stated in the Resolution on annual state budget estimates on the basis of aggregating and balancing sources of revenues, expenditures and budget surplus, and maintaining the government debts and public debts within the limits as prescribed in Resolutions of the National Assembly.
This Decision shall come into force as from the date on which it is signed.
Program’s objectives:
a) General objectives:
Mobilize capital with appropriate costs and level of risks and satisfy the requirements for balancing the state budget and social – economic development in each period; allocate and use loan capital for proper purposes and guarantee the solvency; keep the indices of public debts, government debts and foreign debts of the country within the safe limit; and ensure the national financial security in conformity with the reality of Vietnam and international practices.
b) Specific objectives:
- Gradually reduce domestic and foreign loans taken to make up state budget deficits. The state budget deficit is expected to be reduced to 5.4% of GDP in 2016; the central-government budget deficit is expected to be reduced to approximately 3.38% of GDP in 2017 and 3.3% of GDP in 2018.
- Significantly cut down on government-backed loans by minimizing the provision of government guarantee to new applicants; control the issuance of government-backed bonds by two banks for social policies at the limit of not exceeding the annual debt repayment amount; control the annual net disbursement granted to in-progress programs/projects at 1,000 USD/year.
- Minimize risks of refinancing, liquidation, exchange rate, and currency, set up the mechanism to boost the development of government bond market and strive for extension of loan term by issuing domestic government bonds for the period 2016-2018; the expected average loan term is expected to hit 6 – 8 years, and the rate of bonds issued with a term of 5 years or longer is expected to reach at least 70% of total volume of issued government bonds.
- Maintain public debts (including government debts, government-guaranteed debts and local government debts) less than 65% of GDP, in which the outstanding government debt is less than 54% of GDP and the outstanding foreign debt of the whole country is less than 50% of GDP.
- Maintain total amount of debts payable by the Government in the year (excluding on-lend amount) less than 25% of total state budget revenues, and total amount of national foreign debts payable in the year less than 25% of the value of exported goods and services.
- Maintain the annual ratio of the national foreign exchange reserves to total amount of outstanding short-term foreign debts of the country more than 200%.
- The Government loans mobilized to offset the state budget deficit is approximately VND 606.4 trillion, including VND 247.2 trillion in 2016, VND 172.3 trillion in 2017 and VND 186.9 trillion in 2018.
- Total amount of loans for repayment of principals to the central-government state budget are approximately VND 414.4 trillion, including VND 132.4 trillion in 2016, VND 144 trillion in 2017 and VND 138 trillion in 2018. New loans used for repaying annual principals shall be decided by the National Assembly as reported by the Government and stated in the Resolution on annual state budget estimates on the basis of aggregating and balancing sources of revenues, expenditures and budget surplus, and maintaining the government debts and public debts within the limits as prescribed in Resolutions of the National Assembly.
This Decision shall come into force as from the date on which it is signed.