Republic of Indonesia Presentation Book - October 2020

Republic of Indonesia
Synergy to Drive National Economic Recovery,

Mitigating Covid-19 Risk
October 2020
About Investor Relations Unit of the Republic of Indonesia
Investor Relations Unit (IRU) of the Republic of Indonesia has been established as a joint effort between Coordinating Ministry of Economic Affairs, Ministry of
Finance and Bank Indonesia since 2005. The main objective of IRU is to actively communicate Indonesian economic policy and to address concerns of
investors, especially financial market investors.
As an important part of its communication measures, IRU maintains a website under Bank Indonesia website which is administered by
International Department of Bank Indonesia. However, day-to-day activities of IRU are supported by all relevant government agencies, among others: Bank
Indonesia, Ministry of Finance, Coordinating Ministry for Economic Affairs, Investment Coordinating Board, Ministry of Trade, Ministry of State Owned
Enterprises, Ministry of Energy and Mineral Resources and Financial Services Authority.
IRU also convenes an investor conference call on a quarterly basis, answers questions through email, telephone and may arrange direct visit of banks/financial
institutions to Bank Indonesia and other relevant government offices.
Published by Investor Relations Unit – Republic of Indonesia

Website: http://www.bi.go.id/en/iru/default.aspx
Contact:
Rosita Dewi (International Department - Bank Indonesia, Phone: +6221 2981 8232)
Thasya Pauline (Deputy Ministry for Macroeconomic and Finance Coordinator - Coordinating Ministry for Economic Affairs, Phone: +6221 3521843)
Putri Rizki Yulianti (Fiscal Policy Office - Ministry of Finance, Phone: +6221 345 0012)
Subhan Noor (Directorate General of Budget Financing and Risk Management - Ministry of Finance, Phone: +62213510714)
E-mail: contactIRU-DL@bi.go.id
This Presentation Book also can be downloaded from: http://www.bi.go.id/en/iru/presentation/red/Default.aspx

1
What’s New in This Edition
New Section on Economic Fiscal Policy Update

Recovery Program and Its Updates
…page 72-81
…page 5-35
Bank Indonesia Board of Meeting

Job Creation Law Decision
…page 42-45
…page 106
Investment Realization Progress on Infrastructure Projects
…page 50-52
…page 158-181
2
Overview
1 Economic Recovery Program and Its Updates

5
Fiscal Performance and Flexibility:
Strong Commitment in Maintaining
Fiscal Credibility
Institutional and Governance Effectiveness:

2 Accelerated Reforms Agenda with
Institutional Improvement 6 Commitment to Sustainability and Climate
Change Mitigation
Economic Factor: Monetary and Financial Factor:

3 Stable Growth Prospects
Amid Temporary Moderation
7 Credible Monetary Policy Track Record
and Favourable Financial Sector
External Factor: Progressive Infrastructure Development:

4 Improved External Resilience 8 Strong Commitment on Acceleration
of Infrastructure Provision
3
Section 1
Economic Recovery Program and Its Updates
Concerted Efforts to Mitigate Covid-19 Risk
General Measures
1 8
Establishment of a COVID-19 Task Force to Accelerate Decentralized tests by increasing the number of Covid-19
Coronavirus Disease 2019 (COVID-19) Handling. test laboratories throughout Indonesia.
2 Extension of the emergency status for COVID-19 until 29th 9 Providing Designated Hospitals, including additional
May 2020. designated hospital in Galang Island.
3 Permission for civil servants to work from home, while 10 Utilization of four (4) of ten (10) Wisma Atlet Kemayoran
maintaining the continuity of public services.
Towers (former Athletes Hotel) as emergency hospital.
Promoting massive prevention of the spread of Covid-19; Preparation of 606 health workers and 192 non-health
application of health protocols in public areas, public 11 workers in Wisma Atlet Kemayoran and recruitment of 328
4 transportation, and offices; calls for carrying out social medical volunteers and 2590 non-medical personnel in the
distancing and the prohibition of carrying out activities that field of logistics and operations.
involve large crowds.
12
5 Establishment of Contingency Plans in the regions level.
Closing and limiting the mobility of Indonesian citizens
abroad and foreigners to enter Indonesian territory with
strict immigration and health protocols. 13 Preparation of drugs that have been used for Covid-19
patients in China according to doctor's prescription. The
6 drug has been distributed to designated facilities and its
Evacuation of Indonesian citizens from affected countries
and strict quarantine processes with complete medical stock is continuously being augmented with domestic
facilities. pharmaceutical production.
14
7 Speed up the procurement and distribution of personal
Conducting Rapid Test in 17 provinces with positive patients
protective equipment for designated hospitals and the
of Covid-19.
provision of incentives for medical personnel.
5
Government Measures to Mitigate Covid-19 Risk
Fiscal and Non Fiscal Stimuli
Fiscal Stimuli Phase 1 Fiscal Stimuli Phase 2
1 Brought forward the launch of the Pre-Employment Card in

Bali, North Sulawesi and the Riau Islands. 1 Relaxation of Income Tax (PPh Article 21).
Increased disbursements of the Noncash Food Assistance

2 Program (BPNT) from IDR150,000 to IDR200,000 for a six-
month period commencing March 2020. 2 Relaxation of Income Tax on Imports (PPh Article 22).
3 Provided a stimulus package for housing in the form of an

IDR800 billion subsidy as well as a subsidy on down payments
totalling IDR700 billion. 3 Relaxation of Income Tax (PPh Article 25).
4 Provided incentives for domestic and international travellers. 4 Relaxation of Value Added Tax (VAT) Restitution.
5 Reduced the air passenger service fee (PSF) by 20% for

March-May 2020. Non-Fiscal Stimuli
Discounted the price of aviation fuel at airports located

6 around nine travel destinations for March-May 2020. 1 Reduce and simplify restrictions on export activities to
maintain export performance and competitiveness.
Subsidised or provided grants totalling IDR3.3 trillion to local

7 governments affected by lower tax revenues food service 2 Reduce and simplify restrictions on import activities to ensure
the availability of raw materials.
activities.
6
Bank Indonesia’s Measures to Mitigate Covid-19 Risk
To maintain Monetary and Financial Market Stability
Measures Launched on March 2, 2020 Measures Launched on March 18-19, 2020
Strengthening the intensity of triple intervention policy to

1
Strengthening the intensity of triple intervention policy to
maintain rupiah exchange rate stability in line with the
1 maintain rupiah exchange rate stability in line with the currency's
fundamental value and market mechanisms.
currency's fundamental value and market mechanisms
Extending the SBN repo tenor to 12 months and providing daily
2 Reducing the foreign currency reserve requirement ratio for
2 auctions to loosen rupiah liquidity in the banking industry.
conventional commercial banks from 8% to 4%, effective
16th March 2020. Increasing the frequency of FX swap auctions for 1, 3, 6 and 12-
3 month tenors from three times per week to daily auctions in
order to ensure adequate liquidity.
3 Reducing the rupiah reserve requirement ratio by 50bps for
Strengthening foreign currency term deposit instruments in order
banks engaged in export-import financing activity in 4 to enhance foreign currency liquidity management in the
coordination with the Government.
domestic market.
Expediting the enforcement of domestic vostro rupiah accounts

Expanding the types of underlying transactions available to 5 for foreign investors as underlying transactions for Domestic NDF,
4 foreign investors as hedging alternatives against rupiah
thus increasing hedging alternatives against rupiah holdings.
holdings in Indonesia. Expanding the incentive of a 50bps looser daily rupiah reserve
6 requirement beyond banks that are engaged in export-import
financing to include the financing of MSMEs and other priority
sectors.
5 Global investors may utilise global and domestic custodian
banks for investment activity in Indonesia. 7 Strengthening payment system policy to support COVID-19
mitigation efforts .
Source: Bank Indonesia

7
COVID-19 Handling and National Economic Recovery Committee:
Integrating Economic and Health Policies
• Presiden Joko Widodo has signed Presidential Regulation No.82/2020 on the Covid-19 Response and National Economic Recovery Committee, enacted on
July 2020
• The government hopes that all efforts and steps in formulating and implementing programs and policies can be carried out in a more coordinated and
integrated manner, so that they can accelerate national economic recovery and save the economy from potential economic crises.
COMMITTEE COMPOSITION
Chairman Coordinating Minister of Economic Affairs
PRESIDENT Vice Chairman I Coordinating Minister for Maritime and

Investment
Vice Chairman II Coordinating Minister for Politics, Law and
Security
Vice Chairman III Coordinating Minister for Human Development
and Culture
Policy Committee Vice Chairman IV Minister of Finance
(Chairman: Coordinating Minister of Vice Chairman V Minister of Health
Economic Affairs) Vice Chairman VI Minister of Home Affairs
Chief Executive Minister of State-owned Enterprises
Executive Secretary I Raden Pardede
Executive Secretary II Secretary of Economic Affairs
National Economic TASKS

COVID-19 Handling
Recovery and Preparing Integrate and determine Monitor and
Task Force Transformation Task Force strategic policy the steps for evaluate the
(Chairman: Head of BNPB) recommendation implementing strategic implementation of
(Chairnan: Vice Minister BUMN I) s to the President policies and the strategic policies
necessary breakthroughs
Source: Coordinating Ministry for Economic Affairs

8
Main Programs & Strategies in Facing the Covid-19 Pandemic
MAIN PROGRAMS Two Strategies Facing the Covid-19 Pandemic
Maintaining Life (Health) Maintaining Livelihoods

Safe Indonesia – Indonesian are Safe From
1 Covid-19
• Overcoming/suppressing • Support and help the
viruses and anticipating community
Healthy Indonesia – Health Service Reform new cases
2 Based On Mutual Cooperation • Expanding testing,
• Support and help
affected businesses to
quarantine and re-open and expand
treatment capacity and
health protocols • Priority for job creation,
Powerful Indonesia – People's Purchasing assistance, upskill
3 Power Improvement Program • Get medicine, and do
• Maintaining the
research
availability of liquidity
• Increase capacity and and financial system
Growing Indonesia – Program For Increasing services in the health safety nets
4 State Revenue sector
• Public infrastructure
• Planning vaccine investment, both hard
production and and network
distribution infrastructure
Working Indonesia – Workforce Acceleration
5 Program
Covid-19 Handling Task Force National Economic Recovery &

Source: Coordinating Ministry for Economic Affairs Transformation Task Force
9
Committee's Priority Policies/Program
1. Healthy Indonesia
Public trust  Activity increases  Public consumption increases
Main Key Driving investment  Capacity utilization increases
2. Working Indonesia
Purchasing power of the middle to lower class increased  Public consumption increases
Creating jobs Driving investment Capacity utilization increases
3. Growing Indonesia
Socio-economic Transformation. Don't waste the opportunity to carry out this post-
pandemic transformation

10
Illustration of Health And Economic Recovery In One Wheel
Brake
 Health Safety Net Gas Pedal
Need to step on the brakes
to suppress (contain) the  Social Safety Net
covid-19 contagion  Real Sector Safety Net
Need: Brake fluid Oil/Gas

 Medicine  Source of funding
 Health Workers  Make sure the drain is
 Vaccine smooth and doesn't
leak
Strong SEATBELT: Driver safety while driving

 Financial Sector Safety Nets Step on The Gas!
Brake
11
Covid-19 Handling Strategy
Reducing Implementation
the spread Improvement 3T
of Covid-19
(Involving Campaign
various
elements of
Massive 3M
society) Program Put on a
mask
Wash
hands
Keep the
distance
Decreased Improvement of Health Service Facilities

Mortality & Health Worker Support
Rate

12
Economic Recovery and Covid-19 Handling Requires a Medium-
Term Plan (up to 2023/2024)

13
Government Regulation In UU 2/2020, Previously Perppu No.1 2020
Regulates two topics: (1) National Budget (APBN) and (2) Financial Sector Policy
National Budget (APBN) Financial Sector Policy
1. Relaxation Deficit exceeds 3%, but starting in 2023 it returns

to the maximum level of 3%.
2. Relaxation is related to the allocation/reallocation of
expenditure between institutions, between functions, and
between programs and mandatory spending.
1. Improved Coordination among KSSK members
3. Relaxation of allocation / reallocation of Regional Government 2. Provide the necessary authority to 4 institutions to
Expenditures. prevent a crisis (forward looking) in the KSSK forum for
4. Lending to LPS. example to issue instruments, BI buys SUN on the primary
5. Issuance of SUN and SBSN can be purchased by BI, BUMN, market, lending to LPS and OJK may request a merger or
corporate investors and / or retail investors. consolidation of Financial Services Institutions.
6. Use of alternative budget sources for example SAL, education 3. Foreign exchange management (LLD) management for
endowment funds, and funds managed by the Public Service residents
Agency.
7. Taxation Policy: a) Decrease in Corporate Income Tax Rates
4. Increase public confidence without causing moral hazard.
gradually to 20% starting in 2022; b) Taxation Incentives in
the Capital Market for public ownership <40%; c) Taxation of
Electronic Transactions; d) Extension of tax administration
time; e) Customs facilities in the context of COVID-19.

14
Budget Refocusing Policy
I. Presidential Regulation (Perpres) No 7/2020 on Taskforce to Manage COVID-19 Outbreak → Renewed through Presidential Regulation
(Perpres) No 9/2020
1. Answer to the President → Director (Chair: Coordinating Minister for Economic Affairs) and Implementer (Chair: Head of Indonesian
National Board for Disaster Management), focusing on accelerating the mitigation of COVID-19 through synergy between ministries and
government
2. Funding comes from the state budget, regional budget, and other legal sources
II. Presidential Instruction (Inpres) No 4/2020 concerning Refocusing of Activities, Reallocation of Ministry/Agency Budget, and
Procurement of Goods and Services in the Framework of Mitigating COVID-19 Outbreak and Ministry of Finance Circular (SE) No
6/2020 on Refocusing Activity and Reallocation of Ministry/Agency Budget in the Framework of Mitigating COVID-19 Outbreak
1. Minister / Head of Institution prioritizes the use of budget allocations for the acceleration of mitigating COVID-19 outbreak in
accordance with COVID-19 Handling Protocol
2. Done through a budget revision mechanism (done quickly, simply and accountably)
III. Policy to support efforts to adjust regional allocations and relax transfers for handling Covid-19
1. Minister of Finance Regulation (PMK)19/2020 concerning Distribution and Use of Profit Sharing Fund (DBH), General Allocation Fund
(DAU), and Regional Incentive Fund (DID) budget year 2020 in the context of COVID-19 Countermeasures;
2. Minister of Finance Decree (KMK) 6/2020 concerning Distribution of Physical Special Allocation Fund (DAK) on Health and
Health Operational Assistance (BOK) in the framework of Prevention and/or Handling of COVID-19;
3. Ministry of Home Affairs Regulation (Permendagri) 20/2020 on acceleration of COVID-19 Mitigation in the Scope of
Regional Government
IV. Government Regulation Number 23 of 2020 for Implementation of the National Economic Recovery Program in the Context of
Supporting State Financial Policies for Handling Corona Virus Disease 2019 (COVID-19) and / or Facing Threats that Harm Nation
Source: National Development Planning Agency 15

Covid-19 Handling Fund and National Economic Recovery
Health Sector Economy Sector

(COVID-19 Handling) (National Economic Recovery)
Policies Comittee
(Chairman: Coordinating Minister for
Economic Affairs Airlangga Hartarto) NER and
Covid-19
Reducing the Spread of Covid-19 2020 2021
Stimulus
Budget
Government Responsibilities: 3T
• Test of Covid-19 for Public
• Tracing for Every Positive Result, and TOTAL IDR 695,2 T IDR 356,5 T
• Treat Every Case Well COVID-19 Task
Force NER Task Force
(Chairman: BUMN 1st Vice
1. Health IDR 87,55 T IDR 25,40 T
Community Responsibilities: 3M (Chairman:
Chairman of BNPB)
Ministry)
• Mask Awareness,
2. Social Safety
• Make Sure to Wash Hand Regularly, and IDR 203,90 T IDR 110,20 T
net
• Make Sure to Maintain Social Distancing
Covid-19 Handling and NER formed as a 3. Business
IDR 120,61 T IDR 20,40 T
strategy to accommodate Health Facilities Incentives
Reducing COVID-19 Death Rate
and Economic Recovery by Integrating
Health and Economic Policies 4. SME’s
Government Responsibilities: IDR 123,46 T IDR 48,80 T
Support
• Optimizing Health Facilities (Public Health
Center& Hospital)
5. Corporate
• Supporting Health Workers IDR 53,57 T IDR 14,90 T
Financing
Health and Economic 6. Sectoral
COVID-19 Vaccines Provision Policies need to Institution/Minis
Integrated to Encounter try and Regional
IDR 106,11 T IDR 136,7 T
Government
Presidential Law No. 99/2020 as Vaccination Covid-19 Support for
Roadmap
Economy

The Government of Indonesia’s Relief Program Budget
To deal with health, social protection, and support of MSMEs, the business world, and
local governments
Social Business Corporate Sectoral & SMEs Health

NATIONAL ECONOMIC RECOVERY PROGRAMS (PEN)
Protection Incentives Financing Regional

Gov’t
COVID-19
IDR203.90 T IDR120.61 T IDR53.57 T IDR106.11 T IDR123.46 T IDR87.55 T Handling
Costs
• Conditional Cash
IDR695.2 T
Transfer Program • Interests Subsidy • Expenditure for
IDR37.40T; • Government-Borne • Line Ministries labor
IDR35.28T; Covid-19 Handling
• Basic Foods Income Tax Intensive Program
• Fund Placement IDR65.80T;
IDR43.60T; IDR39.66T; IDR18.44T;
• Social Assistance - IDR78.78T; • Incentives for
• Income Tax • Labor Intensive- • Housing Incentives
Jabodetabek • Guarantee Return Paramedic
Exemption on Import Fund Placement IDR1.30T;
IDR6.80T; IDR5.00T; IDR5.90T;
IDR14.75T; IDR3.42T; • Tourism IDR3.80T;
• Social Assistance – • Working Capital • Death
• Tax Deduction • State Equity • Regional Incentive
Non - Jabodetabek Guarantee (Stop Compensation
IDR14.40T; Participation Fund (DID) IDR5.00T;
IDR32.40T; Loss) IDR1.00T; IDR0.30T;
• Pre-Working • VAT Return (PMN) IDR20.50T; • Physical Special
• Government-Borne • National Health
IDR20.00T; IDR5.80T; • Working Capital Allocation Fund
Final Income Tax Insurance Fee
• Electricity Discount • Corporate IT Rate Investment Reserve IDR8.70;
IDR2.40T; & IDR3.00T;
IDR6.90T; Reduction IDR29.65T • Regional Loan Facility
• Investment • Covid-19 Task
• Logistical / Foods / IDR20.00T; & IDR1.00T; &
Basic Foods Financing to Force IDR3.50T; &
• Other Stimulus • Diversification
UDR25.00T; Cooperatives • Tax Incentives in
IDR26.00T Reserve IDR58.87T
• Village Fund - Cash IDR1.00T Health IDR9.05T
Transfer IDR31.80T
Source: Ministry of Finance 17

NATIONAL ECONOMIC RECOVERY PROGRAM (PEN) REALIZATION
Acceleration of Realization and Implementation of the COVID-19 Relief Package
PEN Realization as of 21 Oct 2020 (%)

Budget
Social Protection Sectoral and Regional Business Support for MSME Corporate
IDR 695.2 Tn Health
Gov’t Incentives Financing*
Realization
IDR 356.8 Tn
(51.3% of budget) 35.2% 69.6% 41.9% 29.4% 80.6% 0.0%
*Provision of this program

is based on necessary
circumstances
Trend of PEN Fund Absorption (IDR Tn)
356,8  In the first four months of the National Economic Recovery (PEN)
318,48 program implementation, the absorption has reached 49.5%The
realization.
 PEN program has experienced a significant acceleration during August
211,6
and September 2020.
147,67 ∆ 38.33 T
 The social protection and support for MSME realization have been
∆ 106.88 T
∆ 63.93 T effectively executed.
 The government will accelerate the PEN progress to reach 100%
realization.
July August September 21-Oct  The PEN program drives the accelerated government spending in Q4.
• Source: Ministry of Finance

National Economic Recovery Program (PEN)
Comprehensive coverage to mitigate the impact of COVID-19 on the economy
PEN Funding (excl. Health)

Demand Side IDR 607.65 T Supply Side
IDR205.20 T IDR402.45 T
Households MSMEs
Conditional Cash Transfer Program , Basic Interest subsidy, Fund Placement for SMEs,
Foods, Social Assistance - Jabodetabek, Social Fee for Guarantee Services (IJP) expenditure,Tax
incentive, IDR123.46T
Assistance Non-Jabodetabek, Pre-Working,
IDR205.2T Working Capital Guarantee (Stop Loss), Investment
Electricity Discount, Logistic/Foods/Basic
Foods, Village Fund - Cash Transfer, Housing Financing to Cooperatives through Cooperatives and SMEs
Incentives – Low Income Households Revolving Fund
CORPORATION
Fund Placement for labor intensive restructuring, State
Equity Participation (PMA) and Debt Securities to State- IDR169.97T
Owned Asset Management Company, Tax Incentives,
Labor Intensive program, Physical-Specific Allocation
Fund reserve, Tourism Incentives
SOEs
State Equity Participation (PMA) and Working Capital IDR12.0T
Investment
Regional Government
Regional Incentive Funds For Economic Recovery, Loan to IDR15.00T
Regional Government
Diversification Reserve IDR58.87T

2021 BUDGET ALLOCATIONS FOR PEN
Gaining the momentum for economic recovery
IDR25.40T IDR48.80T IDR110.20T
HEALTH MSME SOCIAL PROTECTION

1. PKH 10 million KPM
1. the COVID-19 vaccine 1. Regular KUR interest subsidy
2. SEMBAKO Card 18.8 million KPM
2. Immunization, Lab, R & D 2. Financing Support to MSME
3. Pre Work
3. Reserve BPJS Contribution 3. Placement of funds in banking
4. Village Fund (BLT Desa and
Assistance for PBPU / BP 4. Loss Limit Guarantee supporting BUMDes)
5. PEN Financing Reserve 5. Cash Social Assistance 10 million KPM
*) IDR356.5T @ IDR 200 thousand for 6 months
IDR372.3T IDR14.90T IDR20.40T IDR136.70T
CORPORATE FINANCE BUSINESS INCENTIVE SECTORAL AND LOCAL GOV’T

1. PMN to Guarantee Institution 1. Tax borne by the government 1. Tourism Support
(LPEI) 2. 22 Import Income Tax 2. Food security
2. PMN to SOEs carrying out Exemption 3. ICT development
assignments (HK, ITDC, Pelindo 3. Preliminary VAT refund 4. Loans to the regions
III, KIW) 5. Industrial Area
6. PEN Expenditure Proposal
3. Guarantee of backstop loss limit
7. Labor intensive program
*) Temporary agreement on PEN budget allocation

with additional PEN expenditure reserves of Rp15.8T
Main Program Policy Matrix: Timetable and Intensity

21
Various Forms of Business Support in PEN
(National Economic Recovery) Program
FUND PLACEMENT
IN BANKS AS A MSME CREDIT
MEANS OF MSME
GUARANTEE AND
TAX AND LABOR
MSME SUBSIDY
INCENTIVES INTENSIVE
COMPANIES FOR CREDIT
CREDIT INTEREST
RESTRUCTURING
INVESTMENT DOMESTIC
CORPORATE
FINANCING INVESTMENT
CREDIT
FOR AND CREDIT
GUARANTEE
COOPERATIVES FOR SOEs

Fiscal Incentives:
Super Deduction For Research & Development
Income Tax Law (Law No.7/1983 jo. Law
The Government developing a super deduction tax scheme to provide No. 36/2018)
businesses with incentives to conduct research and development in Article 35:
the hopes of spurring innovation
Matters that have not been sufficiently
regulated by law are further regulated by
Object Subject Government Regulation
Certain R&D activities in Domestic coIDRorate taxpayers who
Indonesia, the costs of which are carry out certain research and
charged within a certain period. development (R&D) activities in Law No. 45/2019
Indonesia.
Article 29C:
 Facility for reducing gross income for domestic
Amount of facilities (proposed) taxpayers conducting certain research and
development activities in Indonesia
Stages RPMK  The maximum gross income reduction facility is
Real Cost 100% 300% of the cost
Additional:  Further arrangements through technical regulations
- Commercialisasion 100%
- Registration of Intellectual Property Rights (IPR) in the form of 50%
Patents or Plant Variety Protection Rights (PVT) in the country Technical Regulations (RPMK)
- Registration of IPR abroad / product innovation 25%
In the process of coordinating the drafting of the
- Collaboration with government / private R&D institutions 25%
Minister of Finance Regulation (IDRMK) with the
Total 300% Ministry of Finance, the Ministry of Research and
Technology, and the Ministry of Industry
23
National Economic Recovery Strategy Through Import Substitution
Program (35% Reduction) in 2022
SECTORS
INDUSTRIAL CONDITIONS FOCUS STRATEGIC STEPS
Import Reduction Increasing
• Require to deepen Industrial Structure Food and through Import Production
• Necessary to be independent on raw Beverage Substitution in Utilisation of All
Industries with Large Manufacturing
materials and production
Textiles and Import Value Industry Sectors
• Unsupportive regulations and incentives
• The P3DN Program is not yet optimal Clothing Encouraging the Increase in Investment and
Deepening of Absorption of New Workers
Automotive Industrial Structure
Chemical
Utilisation Utilisation Utilisation
Electronic 60% 75% 85%
35% IMPORT (2020) (2021) (2022)
SUBSTITUTION Pharmacy
PROGRAM BY 2020 • Absorption of workers affected by layoffs
Medical Devices • Increased domestic spending capacity
• Increase in the export market
Source: Ministry of Industry

24
Government Support for MSMEs During the Covid-19 Pandemic
In the form of relaxation of asset quality assessments, postponement of principal & interest subsidies, low-interest working capital loans guaranteed by Askrindo
and Jamkrindo, tax incentives for MSMEs borne by the government, and Productive Presidential Assistance for Micro Enterprises
MSMEs CREDIT RESTRUCTURING WORKING CAPITAL CREDIT
ASSET QUALITY POSTPONEMENT OF PRINCIPAL & 3 LOW INTEREST

1 2
ASSESSMENT INTEREST SUBSIDIES
Placement of Rp30 Trillion Government Funds
According to POJK No. KUR Super Mikro : Loan up to IDR 10 million at Bank Himbara
11/POJK.03/2020 & • Interest subsidy will be 19%, debtors pays 0%
14/POJK.05/2020 interest from Aug – Dec 2020.
4 GUARANTEE
KUR MKM (SMEs):
Asset Quality
Loan up to Rp10 million up to IDR 500 million Government support in the form of guarantees
Arrangement:
by Askrindo and Jamkrindo
Loans ≤ IDR 10 billion can • Postponement of installments and a 6% interest
be based only on the subsidy for the period from Apr-Dec 2020 to 0%.
OTHER SUPPORT
accuracy of principal / • Loan > Rp500 million up to IDR 10 billion
interest payments • Postponement of installments and interest Income Tax for MSMEs is borne by
5 Government
Restructurisation: subsidies from 3% to 3% for the period Apr-Jun
2020 and interest subsidies from 2% to 4% for the MSMEs receive a final PPh rate of 0.5% (PP
The credit quality for period Jul-Sep 2020. 23/2018) borne by the government (DTP).
affected debtors is UMi, Mekaar, Pegadaian (Pawnshop)
determined to be current
• Postponement of principal installments and interest
since restructuring MICRO BUSINESS PRODUCTIVE
subsidies for 6 months from Apr-Sep 2020
6 PRESIDENT ASSISTANCE
The restructuring is carried • Fintech Loan, Co-op, Farmers, LPDB, LPMUKP,
out without a ceiling limit / UMKM PEMDA Direct assistance to 12 million Micro-Business
type of financing Actors in the amount of IDR 2.4 million per
• Relaxation is given a 6% interest subsidy for 6
recipient
months

25
Integration of Various Types of Social Assistance and Financing for
Super Micro and MSMEs is Continually Encouraged
• Super micro, micro and small businesses that are un-bankable have begun to be empowered by the Government with the Productive Presidential Assistance &
Pre-Work Card programs, while the BUMN through the partnership and community development program (PKBL) and private parties with CSR.
• KUR Super Micro scheme, people enjoy loans with 0% interest until December 31, 2020. Meanwhile, People's Business Credit (KUR) for micro small and
medium enterprises (UMKM) is given a subsidy of 6% until 31 Dec 2020 A
Fully commercial loan
B
Commercial Financing Patterns
Subsidizedloan Special scheme of

commercial loan
Rolling softloan
C
CSR D
Social
Assistance E
F Unbanked Bankable
MSMEs Financing
Productive Presidential Partnership and Community KUR Super People's Business Credit
Mekaar UMi
Assistance & Pre- Development Program (PKBL) & Commercial
Private CSR
BWM LPDB* Micro (KUR) Regular
employment Card
Facilities Social grants Private PKBL & CSR Funds Interest Subsidy from the Government Market
Government Guarantee Mechanism
Business Ability
*Fostering Prosperous Family (Mekaar), Micro Waqf Bank (BMW), Ultra Micro (UMi), Revolving Fund Management Agency (LPBD)
Source: Coordinating Ministry for Economic Affairs 26
Government Assistance in the form of Salaries / Wages Subsidy
Regulated in Regulation of the Minister of Manpower (Permenaker) No.14/2020 concerning Wage Subsidized Government Assistance
AIM:
To protect, maintain, and increase the Recipient Target
economic capacity of workers / laborers in
the handling due to Covid-19
15.7 million
Salary/Wage Subsidy Budget
Given in the form of money
IDR37.87 Trillion amounting to IDR600,000 per
month for 4 months and to be paid
with a benefit of IDR 2.4 million per
every two months
worker
Recipient Requirements
1 Indonesian citizens proven by NIK (ID Number)
2 Registered as an active participant in the BPJS Ketenagakerjaan social security program
3 Workers / Laborers who receive Salaries / Wages
4 Registered in social security program membership until June 2020
5 Salaries / wages below IDR5 million according to the latest salary / wages reported by the employer to
BPJS Ketenagakerjaan
6 Have an active bank account
Source: National Economic Recovery and Transformation Task Force 27
Internet Data Assistance
Internet quota assistance for students from elementary to higher education, teachers and lecturers to support the
implementation of effective teaching and learning activities.
BUDGET MAIN TARGET

48 Million
IDR6.73 Trillion students, teachers, &
Period of Implementation
lecturers
Oct - Dec 2020
STUDENTS STUDENTS TEACHERS

LECTURERS &
Early Childhood Elementary to Senior Early Childhood to Senior
UNIVERSITY STUDENT
Education High School High School
20 GB/MONTH 35 GB/MONTH 42 GB/MONTH 50 GB/MONTH

• 5 GB General Quota • 5 GB General Quota • 5 GB General Quota • 5 GB General Quota
• 15 GB Study Quota • 30 GB Study Quota • 37 GB Study Quota • 45 GB Study Quota
• Duration : 4 Months • Duration : 4 Months • Duration : 4 Months • Duration : 4 Months
Internet quota assistance consists of:

• GENERAL QUOTA– Quota that can be used to access all webpages and applications
• STUDY QUOTA– Quota that can only be used to access learning pages and applications
Presidential Assistance for Productive Micro Enterprises (BPUM)
Social assistance of IDR 2.4 Million per business actor provided to Ultra Micro & Micro businesses that are not
currently receiving credit from banks
Existing Programs Expansion Programs

• Grant (one-time distribution) of IDR2.4 million per Micro
Business Actor
• The target is 12 million micro business actors who are • The target is expanded to 12 million Micro Business
not currently receiving working capital credit and Actors
investment from banks
• The initial stage is 9.1 million micro-entrepreneurs
The additional budget needed is ranging from

Budget Value: IDR22 Trillion
IDR6 Trillion to IDR28 Trillion
Implementation Time: August - September 2020 Implementation Time: October - December 2020

Apart from financial support, affected MSME workers are also encouraged
to take advantage of the pre-employment card program
1 Training Fee Assistance: IDR1.000.000
Total benefits per beneficiary:

2 Training Incentives: IDR600.000/month
for 4 months IDR3.550.000
3 Job Survey Incentives:

IDR50.000/survey for 3x survey Target Beneficiaries
and the realization
Initial scheme Covid Scheme

The target recipient is 2 million people Target recipient +/- 5.6 million people
Prioritize :
• Job seekers • Employees who are laid off *
• Workers / Laborers affected by layoffs • Affected UKM actors
• Workers who need increased competence
*To be more precise on target, data from Ministries / Institutions
including BPJS Ketenagakerjaan is needed
Realization as of 18 September, 2020
2.39 million
>26 Million registrants
of 514 Districts / Cities 4.68 Million recipients
Pre-employment Card
1.45 million
Participants complete the training
Participants have received incentives

30
Exit Strategy
The Urgency of Exit Strategy for Indonesia
The Indonesian economy is experiencing very heavy pressures, both in the supply side (business, industry - production)
and in the demand side (people's purchasing power - consumption)
Health Issues  Potential Economic and/or Financial Crisis  Potential Social Problems.
The possibility of shifting community groups

due to prolonged lockdown New Normal Implementation in Indonesia
New Normal is a Scenario to Maintain a Balance between Health
Aspects that must be safeguarded, and Social-Economic Aspects
that must continue to maintain welfare (livelihood)
Vulnerable community
Low saving The New Normal Scenario is implemented by:
Informal sector  Data-based Public Health Indicators:

Poverty  Epidemiology
Poor People Line  Public Health Surveillance
 Health Care Facilities
Informal sector which becomes a Necessary Condition that must be met.
56.50% or 74.03 million Indonesian Savings and the accumulation of

 Requires readiness from the Public Sector to be opened :
work in informal sectors with an average wealth to survive (especially informal  Health protocol (SOP) in each public sector
income of USD 100 – 200 per month. workers) are very small  Community awareness, compliance and discipline
• The fiscal capacity of the state is very limited
• The Government is unable to fund all communities affected by COVID-19.
Social Aid is prepared within a limited period (3 months, 6 months)

31
New Normal
Achieving Productive and Safe Indonesia from Covid-19
Necessary Conditions New Protocol (General)
• Covid-19 Cases Under the Decree of the Minister of Health (KMK)

► A declining number of cases, number of suspects, and number HK.01.07 / MENKES / 328/2020, the new
deaths within 14 days protocol includes:
► Rt < 1
• Monitoring of the virus / Public Health Make sure to clean your hands with soap and
clean water
► The number of tests and contact tracing increases (not
only in big cities but also in regions)
► The application of the use of masks is increasingly
Wear a mask when doing activities outside
expanded (mask for all)
(mask for all)
• Health services capacity
► Medical personnel, PPE
► Availability of drugs, ICU room, ventilator Apply physical distancing (1.5 - 2 m)
• Business sector preparation
► Establishing new SOPs/guidelines at work (temperature
measurement, masks at work, distance keeping, etc.) Self-isolation if exposed to positive cases and
• Public Response illness
► Discipline the application of new protocols for activities
► Submission of information that is accurate, official and
transparent by the government to the public Temperature check-in each building

32
Protocols in Every Economic-Social Sector
Sector Protocol Important Point

GENERAL Decree of the Minister of Health (KMK) number HK / 01.07 Regulate:
/ MENKES / 328/2020 about Covid-19 Prevention and • Rules at Work
Control Guidelines in Office and Industrial Workplaces in • Rules for Workers
Supporting Business Sustainability in Pandemic Situations • Alleged Covid-19 Management (OTG, PDP, ODP, or
Confirmation)
• Coordination between workplace and Regional Government
INDUSTRY Minister of Industry Circular No.4 / 2020 about Regulate:
Implementation of Factory Operations in the Corona Virus • Rules for Industrial Estates
Disease-19 Public Health Emergency • Rules for Workers
• Cleaning and Disinfection Guide
• Social Distancing Guide
TOURISM Standard Operational Procedure (SOP) is in the process of Arranging SOPs for Hotels, Homestay, Restaurants, Travel
harmonization with the Task Force Attractions, Art Venues, Film Production, TV Coverage
TRANSPORTATION Transportation Minister Regulation No.18 of 2020 about Regulate:
Transportation Control in order to Prevent the Spread of • Transportation control for the whole region
Covid-19 Virus • Transportation control in areas designated as PSBB (Large-
scale Social Restrictions)
• Transportation control for homecoming activities in 2020
TRADE • SOP on Health Protocol for Modern and Regulate:
People’s/Traditional Market and Retail - Ministry of Trade • Rules in the Market Environment
• Protocol on Prevention of Covid-19 Distribution in • Rules for Traders and Management
Shopping Centers - Source: Association of Indonesian • Rules for Consumers
Shopping Center Management • Operating Time

33
Progress of Indonesia’s Covid-19 Vaccine Development
10 Vaccine Candidates Listed In WHO
1
And at The End Stage of Clinical Test
Based on Presidential Decree No. 99 of 2020 and the
Presidential Meeting on 19 October 2020, the Government has 2. WUHAN INSTITUTE
OF BIOLOGICAL
1. SINOVAC
PRODUCTS -
decided to develop 2 types of vaccines: SINOPHARM
a) Government Assisted Vaccine (to be administered by the
Ministry of Health) 3. BEIJING INSTITUTE
4. UNIVERSITY OF
OF BIOLOGICAL
OXFORD -
b) Independent Vaccines (which will be managed by SOEs) PRODUCTS -
ASTRAZENECA
SINOPHARM
5. CANSINO
6. GAMALEYA
BIOLOGICAL INC. –
2
RESEARCH INSTITUTE
BEIJING INSTITUTE OF
– SPUTNIK V
Based on the assignment of the Government, SOE (Bio Farma) BIOTECHNOLOGY
will produce the Covid-19 vaccine to support the Government

(Ministry of Health) program and The Independent Vaccine - 7. JANSSEN
PHARMACEUTICAL 8. NOVAVAX
Red and White Vaccine (Ministry of Research & COMPANIES
Technology/BRIN) in addition to the procurement and the

selling of Independent Vaccines
10. BIONTECH / FOSUN
9. MODERNA / NIAID
PHARMA / PFIZER

34
With The NER (PEN) Program and New Normal Programs,
Economic Activity Began to Rise
Although public purchasing power has not returned to normal levels, a number of economic indicators have shown improvement in line with the easing of economic
activity
Vehicle Sales Retail Sales Growth (%YoY)

Indonesia Manufacturing PMI
800 0,0 15
55
600 -20,0 10
50 5
-57,8 -40,0
45 400 0
47,2 -60,0
-7,3
40 200 -5
-80,0
35 -10
0 -100,0
-15
30 -20
27,5
25 -25 -20,6
Mar-19
May-19
Mar-20
May-20
Jan-19
Nov-19
Jan-20
Jul-19
Sep-19
Jul-20
Sep-20
Motorcycle Sales (thousand)
Oct-19
Jun-19
Nov-19
Dec-19
Jun-20
Sep-20
Jul-19
Jul-20
Feb-19
Apr-19
Sep-19
Feb-20
Aug-19
Apr-20
Aug-20
Jan-19
Mar-19
May-19
Jan-20
Mar-20
May-20
Car Sales (%YoY) - rhs
Business Activity Survey Import

Consumer Confidence Index
140 20,00 50
130 10,00 30 19,01
120 0,00 2,1 10 7,23
110
-10,00 -10 -6,12
100
90 -20,00 -30
80 83,883,4 -30,00 -50
Nov
Feb
Sep
Jan
Apr
Mar
Mei
Ags
Des
Jun
Jul
Okt
70 77,8 -40,00 -35,8
Consumption goods Raw Material
Capital goods
Section 2
Institutional and Government Effectiveness:
Accelerated Reforms Agenda with
Institutional Improvement
Improving Global Perception
…with recent improvements on corruption perception index and governance indicator
Global Competitiveness Index1 Ease of Doing Business2
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Rank 0
20 Higher rank is better (rankings at the time of annual report publication)
20
Higher rank is better 36 40
30 41
45 60
40 50 72
73
80
50 91 73
100
60
120
70
*New Concepts by using the Global 140
80 Competitiveness index 4.0 which captures
the determinants of long-term growth. 160
90
India Indonesia Philippines Bulgaria Colombia Indonesia India Philippines Bulgaria Colombia
Worldwide Governance Indicators3 Corruption Perception Index4

60 59 44
Higher score is better 43
52
42 42
51 41
45 46 40 41 40
43
38 38
37
30 36 36
28
36
34 34
Higher rank is better
15 32
2010 2011 2012 2013 2014 2015 2016 2017 2018
30
Voice and Accountability Political Stability/Absence of Violence 2012 2013 2014 2015 2016 2017 2018 2019
Government Effectiveness Regulatory Quality
Rule of Law Control of Corruption Indonesia India Philippines Bulgaria Colombia
1. Source: World Economic Forum – The Global Competitiveness Report 2019;

2. Source: World Bank – Doing Business 2020 Report;
3. Source: World Bank – The Worldwide Governance Indicators 2019 Update;
4. Source: Transparency International – Corruption Perceptions Index 2019 Report 37
Continuous Improvement of Investment Climate
…another leap on Indonesia’s Rank on Ease of Doing Business (EODB)*
EoDB 2020 EoDB 2019 Change in EoDB 2020 EoDB 2019 Change in
Rank Rank Rank Points Points Points
Overall 73 73 0 69.6 68.0 1.6
Starting a business 140 134 6 81.2 81.2 0.0
Dealing with Construction Permits 110 112 2 66.8 66.6 0.2
Getting Electricity 33 33 0 87.3 86.4 0.9
Registering Property 106 100 6 60.0 61.7 1.7
Getting Credit 48 44 4 70.0 70.0 0.0
Protecting Minority Investors 37 51 14 70.0 63.3 6.7
Paying Taxes 81 112 31 75.8 68.0 7.8
Trading Across Borders 116 116 0 67.5 67.3 0.2
Enforcing Contracts 139 146 7 49.1 47.2 1.9
Resolving Insolvency 38 36 2 68.1 67.9 0.2
* Higher rank is better, EoDB 2020 was published in October 2019

- Government efforts to boost business growth through deregulations and de-bureaucratization have been recognized by the improvement of EODB
- Structural reforms will continue including in the budget and real sectors
Source: World Bank 38

Indonesia Has Been Rated as Investment Grade Country
since 2017
BBB / Stable
August 2020, Rating Affirmed at BBB/Stable

The affirmation of the rating is underpinned by a favorable medium-
term growth outlook and a low government debt burden compared
with “BBB” category peers.
BBB / Negative
April 2020, Rating Affirmed at BBB, Outlook Revised from Stable to

Negative
“The affirmation reflects Indonesia’s stable institutional settings,
strong growth prospects, and historically prudent fiscal policy
settings. The negative outlook reflects S&P expectation that
Indonesia faces additional fiscal and external risks related to the
COVID-19 pandemic in the next 24 months .”
Baa2 / Stable
Feb 2020, Rating Affirmed at Baa2/Stable
“The affirmation of the ratings is underpinned by a number of credit
strengths – including Indonesia’s robust and stable growth rates and
a low government debt burden, preserved by consistent fiscal
discipline and emphasis on macroeconomic stability – as well as
persistent credit challenges.”
BBB+ / Stable BBB+ / Stable

March 2020, Rating Upgraded at BBB+/Stable January 2020, Rating Upgraded at BBB+/Stable
“The upgrade reflects the firm implementation of policies to strengthen economic growth “The ratings mainly reflect the country’s solid domestic consumption-led economic growth, restrained budget deficit
potential on the back of a solidified political foundation. As the global spread of the novel and public debt, and resilience to external shocks supported by flexible exchange rate and credible monetary
coronavirus could strain growth in the Indonesia economy, the government and the central policies and accumulation of foreign exchange reserves. Since its previous rating review, JCR has been paying
bank are working to shore up the economy and maintain macroeconomic stability. Given the particular attention to the continuing reform initiatives pushed by the administration of President Joko Widodo and
country’s underlying economic strength which remains intact, R&I expects the economy to the content and progress of the economic policy taken by his second administration which took office in October
start to recover if the epidemic is brought under control” 2019. Among the reform agenda, infrastructure development has continued to progress faster than JCR had
expected.”.
39
Medium-Term National Development Plan (RPJMN) 2020-2024
President’s Vision: "The Establishment of an Advanced Sovereign, Independent and Personality Based
on Mutual Cooperation".
President‘s Missions Top 5 Presidential Priorities 7 RPJMN Development Agenda
Improving the Quality of the Indonesian Labour

HR
1 Force 1 Development
Strengthening Economic Resilience to
Achieve Superior Economic Growth
Achieving Productive, Independent and
2 Competitive Economic Structure Developing More Remote Regions to Reduce
Economic Gaps and Improve Equality
Infrastructure
3 Attaining Equitable and Prosperous National
Development 2 Development
Achieving Sustainable Environmental Improvement of Quality and

4 Climate Competitiveness of the Labour Force
Regulation
5 Developing Cultural Progress
Reflecting the Nation's Personality
3 Simplification
Engaging in Mental Revolution
and Culture Development
Developing a Dignified and Trustworthy Legal
6 System Free from Corruption Strengthening Infrastructure to
Simplification of
Protection of All Nations and 4 Bureaucracy
Support Economic Development
and Improve Basic Services
7 Provision of Security to All Citizens
Conservation of Environment,
Supporting Climate Change, and
Attaining Good, Effective, and Economic Enhancing Disaster Resilience
8 Reliable Governance 5 Transformation
Enhancing Political, Legal, Defense and
Achieving Synergy of Governmental Stability and Transforming Public Services
9 Framework with the Regional Government

Simplifying Regulations through Omnibus Laws
Omnibus Laws Group a Diverse Range of Issues into Legislation, Aimed at Creating Jobs and
Empowering SMEs.
Omnibus Law Priority Sectors
Taxes Financial
Labour
Sector1
6 Pillars of Omnibus Law Perpajakan (Taxation)
1) Investment Funding 3) Personal Taxpayer 5) Equity of Business

2) Territorial System 4) Taxpayer Compliance 6) Taxation Facility
Investment
11 Clusters of Omnibus Law Cipta Lapangan Kerja (Job Creation)
1) Simplification of Licensing 4) Ease, Empowerment and Protection of MSMEs 7) Government Administration 10) Government Investment and
2) Investment Requirements 5) Ease of Doing Business 8) Imposition of Sanctions Projects
3) Employment 6) Research and Innovation Support 9) Land Acquisition 11) Economic Zone
 Following the inauguration of his second presidential term in October 2019, President Joko Widodo announced his administration’s plans to continue regulatory reform by focusing on
initiatives such as developing a dynamic and qualified workforce, promoting industry cooperation through technology, further enhancing infrastructure development and economic
reform as well as simplifying regulations and bureaucracy.
 To achieve such ends, President Widodo’s Government subsequently prepared three bills of omnibus laws, namely an omnibus bill on job creation, an omnibus bill on development
and strengthening the financial sector and an omnibus bill on tax provision.
 Omnibus laws refer to laws that group diverse and unrelated issues which are drawn into a bill which is accepted in a single vote by a legislature.
1Under discussion
Economic Transformation is required to recover the economy and
avoid the middle income trap
Bill on Job Creation as a strategic and extraordinary national policy to recover and improve the national economy
(Complements UU 2/2020)
Bill on Job Creation National Economy Indonesia Maju
Economic Transformation
2045
Investment, Business Fundamental Problems

License (80 Articles) Growth Top 5 Global
Hyper Regulation
Economy
 National and sub-national regulations = 43.604
Land Procurement (19
Articles) Competitiveness Equity Out of middle-
 Less conducive business environment income trap
Gov Investment and Strategic  Inefficient bureaucracy
National Project (16 Articles)  High cost economy hampering export Protection GDP of USD 7.4
Employment trillion
MSMEs & Cooperative (15
Articles)  Low productivity albeit productive age
Competitiveness Poverty Rate 0%
 Unemployed and part-time workforce
Ease of Doing Business (11 amounting to 45,8 million people (34,3%)
(before pandemic)
Articles)
Competitive
License and Ease of Doing Business workforce
Employment (5 Articles)
 Licensing approach
 Convoluted and overlapped
 Difficult to start and operate a business
Economic Zones (4
Articles) MSME & Cooperative
 Complex licensing
Monitoring and Sanctions
 Without legal status
(3 Articles)
 Minimum protection and facilitation
Research and Innovation (1 Legal Certainty

Article)  Criminal sanction for administrative sanction
42
The Job Creation Omnibus Law Encourages Employment and Facilitates
New Business Opening While Recovering the Post-Pandemic Economy
Labour Market MSME REGULATION

D A T A &
MILLION MILLION MILLIO

BIG Among the 64.19 Complicated licensing
N
Unemployed WORKERS NEW WORK million MSEs, 64.13 issues with abundant
F A C T
FORCE
Unemployed ARE
million are Micro & central & local regulations
TERMINATED MIDDLE
Small Businesses, (hyper-regulations) that
most of which are in regulate the sector,
SMALL causing disharmony,
the informal sector, so
it needs to be overlapping, non-
MICRO encouraged to operational and sectoral.
transform into formal
MORE THAN 13 MILLION PEOPLE NEED JOBS, AND CONTINUES ones.
TO GROW IT EVERY YEAR
JOB CREATION LAW

1. IMPROVING INVESTMENT ECOSYSTEM 2. BUSINESS LICENSING 3. LABOR 4. SUPPORTING MSMEs 5. EASE OF DOING BUSINESS 6. RESEARCH & INNOVATION
SUBSTAN
CE 7. LAND PROCUREMENT 8. ECONOMIC ZONE 9. CENTRAL GOVERNMENT INVESTMENT & 10. GOVERNMENT ADMINISTRATION 11. IMPOSITION OF SANCTIONS
SPEEDING OF STRATEGIC NATIONAL PROJECT
BENEFITS
Encouraging Job Creation Facilitate New Business Opening Supporting Corruption Eradication

43
Framework of the Job Creation Law
New Business New Job

COMPANY Creation Creation
INVESTMENT
Business Welfare
Development Creation
PRODUCTION
JOB CREATION
LAW
Increased
CONSUMPTION Increased
Purchasing
Power Income
HOUSEHOLD

44
Structures Job Creation Law
Chapter I General Requirements (Article 1)
Chapter II Principles, Objectives, and Scope (Article 2 – Article 5)
Chapter III Improvement of Investment Ecosystems and Business Activities (Article 6 – Article 79)
Chapter IV Labour (Article 80 – Article 84)
Chapter V Convenience, Protection, Empowerment of Cooperatives and MSMEs (Article 85– Article 104)
15 Chapter VI Ease of Doing Business (Article 105 – Article 118)
Chapters
Chapter VII Research and Innovation Support (Article 119 – Article 121)
Chapter VIII Land Procurement (Article 122 – Article 147)
Chapter IX Economic Zones (Article 148 – Article 153)

186 Chapter X Central Government Investment and Ease of National Strategic Projects (Article 154 – Article 173)
Articles
Chapter XI Implementation of Government Administration to Support Job Creation (Article 174 – Article 176)
Chapter XII Supervision and Development (Article 177 – Article 179)
Chapter XIII Other Provisions (Article 180 – Article 183)
Chapter XIV Transitional Provisions (Article 184)
Chapter XV Closing (Article 185 – Article 186)

45
Enhancing Business License Service Standard
Presidential Regulation to Accelerate Ease of Doing Business has been launched
Improve efficient, streamlined, & Provide business licensing Overcome the barriers to
integrated business license service process assurance in terms of doing business in
standards the costs and lead times Indonesia
Policy Goals
2 4 6
1 3 5
Accelerate the business Increase coordination & synergy Implement integrated
licensing process between central & regional licensing process (single
government submission)
1st Phase 2nd Phase
Forming a Task Force to identify & Business license

overcome the end-to-end licensing regulatory reforms
Main Policy
barriers
Implementing a licensing checklist for Implementation of the

Special Economic Zones (KEK), Free Single Submission
Trade Zones (FTZ), Industrial Zones & system
Tourist Zones
Utilizing data sharing

Note: 1st and 2nd Phase are implemented in parallel

Improving Investment Climate
Online Single Submission (OSS) Has Been Launched...
OSS is a web-based business licensing system intended to cut the red tape involved in obtaining business permits and
integrated between the central government and regional administrations
Sectors
Environment & Public Works & Lorem Ipsum

Electricity Health Sector Industry Sector
Forestry Sector Housing Sector Suitable for all
Sector
category,
Marine & Fishery Medicine & Transportation Information &

Trade Sector Communication
Sector Food Sector Sector
Sector
Other Sector
The Advantage of Using OSS
Business licenses can Standardized Ellectronically

be secured in under an business licenses integrated
hour are available
Accessible at The whole licensing

More practical anytime and process is monitored by
anywhere the Task Force

…Bonded Logistic Center to Improve Indonesia’s Competitiveness
Bonded Logistic Center To date, 52 Bonded Logistic Center has been launched to
support various industries.
(Pusat Logistik Berikat/PLB) is a

facility provided by Ministry of
Finance as part of the Food & Small and
medium
implementation of the 1st Economic beverages
industry
industry
Policy Package. Oil and Personal
gas, and care/
PLB facility aims to improve mining home care
efficiency and reduce the cost of industry industry Synthetic
textile
transportation and logistics in Auto-
(chemical
motive
Indonesia; support the growth of the industry
substances)
domestic industry, including small Textile industry.
Heavy
(cotton)
and medium industries; increase Equipment
industry
investment; and to make Indonesia industry
Aircraft
to become a logistics hub in Asia Defence MRO
Pacific. industry industry
48
…revising the Negative Investment List
Introduction of New Foreign Ownership Regulation for Strategic Sectors
Cold storage Sports Center, Restaurants, Bars Pharmaceutical Raw Materials

Film Processing Lab, Crumb Rubber Manufacturing
Before After Before After Before After Before After
33% 100% 49% 100% 100% 85% 100%

51%
Toll Road Operator, Distribution, Warehousing Private Museum, Catering, apparel

Key Reforms in Negative Foreign Telecommunication Testing Company Manufacturing, Exhibitions &
Investment List Conventions
Before After Before After Before After
Revision of "Partnership" category to refer

to partnership with Micro, Small and
Medium Enterprises (MSMEs) 95% 100% 67% 67%
33% 51%
Grandfather Law: If a particular sector is

tightened in future, existing foreign Professional Training, Golf Course Management, Air
investor does not need to comply with Telecommunication Provider
Transport Support Services, Travel Bureau Consultancy for Construction1 with Integrated Services
tighter stake
Before After Before After Before After
Strengthen implementation of negative

investment law through active roles from
ministries, agencies and regional 49% 67% 55% 67% 67%
65%
governments
1 For total project value of IDR10bn and above
Source: Investment Coordinating Board (BKPM)

49
Strategy to Maintain Investment Climate During COVID-19 Pandemic
Investment inquiries facilitation of existing operating

1 companies
Investment potential facilitation from existing companies

2 not yet been executed
3 Bring in new investments
4 Providing incentives for existing companies’ expansion
Source: Investment Coordinating Board of the Republic of Indonesia

50
Investment Realization Facilitation Services During COVID-19
Pandemic
Companies Operation Support

1 Optimizing facilitation for companies that accelerate the development and operation of business
activities through the issuance of letters of support to companies while still observing the COVID-19
protocol
Visa Recommendations for Company Leaders

2 Providing Visa recommendations for foreign companies’ leader visit to related to their industry
exploration /relocation and company operations. Including to obtain an entry permit / visit visa
during large scale social restriction (PSBB).
Visa recommendations for foreign skilled workers

3 Providing Visa recommendations for foreign skilled workers who will enter the country related to their
investment realization / implementation
Escorting Existing Investment Realization

4 Conduct visits to companies (for example visiting Hyundai and Bonded Zone) to spur existing
investment in addition to fiscal incentive facilitation
Optimization of Business Licensing Services

5 BKPM continues to provide business licensing services amid the COVID-19 Pandemic. The
average business license issued during the pandemic both online and offline is 4000-5000
permits per day.
Source: Investment Coordinating Board of the Republic of Indonesia (BKPM) 51
January - September 2020 Investment Realization
(excluding the upstream oil and gas sector and financial services)
2020
INVESTMENT REALIZATION TARGET Investment Realization
(Jan - Sept 2020)
Domestic
IDR817.2 T
IDR611.6 T Investment (PDMN)
IDR309.9
(50.7%)
74.8% Foreign Investment
(PMA)
IDR301.7T
(49.3%)
Indonesian Workers’ Absorption

(2nd Quarter 2020) (3rd Quarter 2020)
263,109 295,387

52
January - September 2020 Investment Realization
(excluding the upstream oil and gas sector and financial services)
By Geography Investment Distribution

Top 5 Investors (by country)
(in USD million) IDR51.9 T
(8.5%) IDR53.3 T
IDR34.6 T
(8.7%)
(5.6%) Outside Java
Java
IDR304.1T
IDR307.5 T
Singapore 7.163,4 (49.7%)
(50.3%)
34.2% IDR144.2 T
(23.6%)
IDR307.5 T
East Java (50.3%) IDR20.1 T
China 3.509,3 (3.3%)
16.7% IDR66.5T
Hongkong
(10.9%)
2.480,2 By Location
11.8%
DKI Jakarta
Japan 2.134,3 IDR72.5T
Others
10.2% IDR306.8 T
(11.8%)
(50.2%)
South Korea 1.142,4 West Java
5.9% IDR86.3T
(14.1%)
Others 4.524,2
East Java
19.7% IDR66.5T
Central
Banten (10.9%)
Java
IDR42.0T
IDR37.5T
(6.9%)
(6.1%)
53
Investment Realization (Q3-2020)
Direct Investments Top 8 FDI Realization by Sectors (Q3-2020 vs Q3-2019)

IDR tn Metal, Except Machinery,
240 and Equipment Industry
220 FDI DDI TOTAL
200 209,0
180 US$1,631.5 mn
160 102,9
Machinery,
140
120
Electronic, Medical 177.8% Electricity, Gas, and
100 Instrument,
Water Supply
80 US$282.0 mn US$916.1 mn
60 106,1
40
20
649.2% 41.0%
0
Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3
2016 2017 2019 2020

Food Industry Mining
2013 2015 2018
2014
US$344.9 mn Investment US$569.4 mn
Rp159.4 T IDR209.0tn 16.5% Realization 99.4%

IDR205.7tn
Rp145.4 T 375,982 434,463
* Transportation,
Warehouse, and Housing, Industrial Estate,
9.6% 1.6% and Office Building

15.6% Telecommunication
US$994.6 mn US$604.4 mn
Q3-2019 Q3-2020
Q1-2016 Q1-2017
* person
Q1-2016 Q1-2017 46.0% 11.4%
IDR106.1tn Chemical and
IDR100.7tn IDR102.9tn Pharmaceutical Industry
IDR105tn
US$595.4 mn
88.7%
1% 2.2%
Q3-2019 Q3-2020 Q3-2019 Q3-2020
Source: Investment Coordinating Board (BKPM), compared to Q3-2019 period

54
Potential Investment Realization Reaches IDR 708 T
Companies that had been facilitated:
IDR 708T ±Rp 410

T IDR 211.9T IDR61.2T
(58%)
Potential
The potential value IDR38.0T
Investment facilitated IDR39.2T (Tanjung Jati
Realization Power)
IDR21.7T IDR14.0T
Solving stalled investment issues is one
strategy to attract investors
IDR9.5T Bengkulu IDR5.2T
Electric Power
(Galempa
Sejahtera IDR2.0T IDR1.8T
Bersama)
PT Sumber IDR1.8T
Klaten, Central Dumai, Riau Mutiara Indah IDR1.8T
Java Perdana (SMIP)
Indonesian government does not only facilitates large

investment issues, but also medium & small investments IDR1.1T
Others IDR1.4T

55
Section 3
Economic Factor:
Stable Growth Prospects
Amid Temporary Moderation
Conducive Environment
Underpinning Stable Growth Fundamentals Amid Temporary Moderation
Tax base to be
4th Most Populous Budget reform as a
broadened from
Largest Economy in country in the part of larger
one reduce
South East Asia World; 64% in economic reform
dependency on
initiative
productive age commodities
Large and Stable Consistent

Economy Budget Reform
Fuel subsidies
Rising Middle Class significantly reduced
Manageable Prudent debt
and Affluent and spending
Inflation Rate management
Customers redirected to more
productive allocation
Reform-Oriented
Administration
From commodity-based to manufacturing Three main sources of financing for investment
and service sectors via infrastructure needs: State and regional budget, State Owned
development Enterprises and PPP
New Economic High
Continuing from 2015 policy, infrastructure will
From consumption-led to investment-led growth Structure Infrastructure be higher than fuel subsidy
via a stronger manufacturing sector and more
investment initiatives Investments
Infrastructure spending focused on basic
infrastructure projects
Policies to maintain purchasing power to
stimulate domestic economy in the midst of
weakening macroeconomic conditions Fiscal and non-fiscal incentives to attract
infrastructure investment and promote PPP
57
Indonesia’s GDP Growth Momentum Moderated
Strong GDP Growth1 • Indonesia’s economy contracted 5.32% (yoy) in Q2/2020 period after expanding 2.97%
QoQ YoY (yoy) in Q1/2020. The recent contraction is consistent with global economic weaknesses
% stemming from the COVID-19 pandemic as well as containment measures in the form of
7,0 large-scale social restrictions to break the domestic chain of transmission. Through its
5,1 4,9 4,9 5,0 4,8 4,7 4,8 5,2 4,9 5,2 5,0 4,9 5,0 5,0 5,1 5,2 5,1 5,3 5,2 5,2 5,1 5,1 5,0 5,0
5,0 4,2 policy mix, Bank Indonesia will continue to strengthen synergy with the Government and
4,0 4,0 4,2
3,8 3,3 3,7 3,3 3,1 3,2 3,1 3,1 3,0 other relevant authorities in order to ensure the effectiveness of various policies
3,0 implemented to build economic recovery momentum
1,0 0,0 • Domestic economic growth has declined across all GDP components from the expenditure
side. Household consumption contracted 5.51% (yoy) compared with positive 2.83% (yoy)
-1,0 (0,2) (0,4) (0,3) (0,4) (0,5) in the first quarter of 2020. Likewise, investment posted an 8.61% (yoy) contraction, down
(1,7) (1,8) (1,7) (1,7) (1,7)
(4,2) from 1.70% (yoy) in the previous period. Muted government stimuli in line with seasonal
-3,0 (2,1) (2,4) trends have also fed through to a 6.90% (yoy) contraction of government consumption,
-5,0 falling steeply from 3.75% (yoy) in the first quarter of 2020. In addition, exports
(5,3)
experienced an 11.66% (yoy) contraction in the reporting period due to the shrinking global
-7,0 economy and sliding international commodity prices. Mirroring domestic demand and
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 exports, imports recorded a 16.96% (yoy) contraction in the reporting period.
2014 2015 2016 2017 2018 2019 2020 • All economic sectors experienced a contraction in the second quarter of 2020, excluding
Information and Communications; Water Supply; Health, Education and Financial Services;
as well as Agriculture. Economic moderation has primarily been driven by Transportation
Favourable GDP Growth Compared to Peers2 and Storage, Trade and Accommodation, as well as Manufacturing. In contrast, the
% Information and Communications sector posted stronger growth in line with greater uptake
10,00 of digital media in response to Work From Home (WFH) and School From Home (SFH)
8,80
7,40 protocols. Furthermore, the Agricultural sector has been boosted by the ongoing harvesting
season.
5,00 6,10
Growth Prospect
0,00 4,00 2020 GDP growth
Institutions
(%YoY)
-5,00 2020 Budget (Presidential Regulation 72/2020) -0,4-1,0
Bank Indonesia 0,9-1,9

-10,00 Bulgaria Colombia India
IMF (WEO October 2020) -1.5
Indonesia Philippines
-15,00 World Bank (GEP June 2020) 0.0
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021*
ADB (ADOS September 2020) -1.0
1. Source: Central Bureau of Statistics of Indonesia (BPS), ** Including non-profit household consumption
2. Source: World Economic Outlook Database – October 2020; * indicates estimated figure Consensus Forecast (October 2020) -1.9 58
GDP Growth Breakdown
GDP Growth Based on Expenditures (%, YoY)1

2015 2016 2017 2018 2019 2020
By expenditure Q1 Q2 Q3 Q4 Tot. Q1 Q2 Q3 Q4 Tot. Q1 Q2 Q3 Q4 Tot Q1 Q2 Q3 Q4 Tot Q1 Q2 Q3 Q4 Tot Q1 Q2
HH. Consumption 5.0 5.0 5.0 4.9 5.0 5.0 5.1 5.0 5.0 5.0 4.9 5.0 4.9 5.0 4.9 5.0 5.2 5.0 5.1 5.1 5,0 5,2 5,0 5,0 5,0 2,8 -5,5
Non profit HH.
consumption (8.1) (8.0) 6.6 8.3 (0.6) 6.4 6.7 6.7 6.7 6.6 8.1 8.5 6.0 5.3 6.9 8.1 8.8 8.6 10.8 9.1 17,0 15,3 7,4 3,5 10,6 -5,1 -7,8
Government
consumption 2.9 2.6 7.1 7.1 5.3 3.4 6.2 (3.0) (4.0) (0.1) 2.7 (1.9) 3.5 3.8 2.1 2.7 5.2 6.3 4.6 4.8 5,2 8,2 1,0 0,5 3,2 3,7 -6,9
Gross Fixed Cap.
Formation 4.6 4.0 4.9 6.4 5.0 4.7 4.2 4.2 4.8 4.5 4.8 5.3 7.1 7.3 6.2 7.9 5.8 6.9 6.0 6.6 5,0 4,6 4,2 4,1 4,4 1,7 -8,6
Exports (0.6) (0.3) (1.0) (6.4) (2.1) (3.1) (1.5) (5.9) 3.9 (1.7) 8.4 2.7 16.5 8.4 8.9 5.8 7.5 8.3 4.6 6.5 -1,6 -1,7 0,1 -0,4 -0,9 0,2 -11,7
Imports (2.6) (7.1) (6.5) (8.6) (6.2) (5.0) (3.4) (4.1) 2.7 (2.4) 4.8 0.2 15.4 11.9 8.1 12.5 14.9 13.8 7.1 11.9 -7,5 -6,8 -8,3 -8,0 -7,7 -2,2 -17,0
GDP 4.8 4.7 4.8 5.2 4.9 4.9 5.2 5.0 4.9 5.0 5.0 5.0 5.1 5.2 5.1 5.1 5.3 5.2 5.2 5.2 5,1 5,1 5,0 5,0 5,0 3,0 -5,3
1. Source: Central Bureau of Statistics of Indonesia (BPS), ** Including non-profit household consumption
GDP Growth by Sector (%, YoY)

2015 2016 2017 2018 2019 2020
By sectors Tot
Q1 Q2 Q3 Q4 Tot. Q1 Q2 Q3 Q4 Tot. Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Tot Q1 Q2 Q3 Q4 Tot Q1 Q2
.
Agriculture, forestry, and
fishery 3.7 6.5 2.9 1.6 3.8 1.5 3.5 3.2 5.5 3.4 7.1 3.3 2.8 2.4 3.9 3.4 4.7 3.6 3.8 3.9 1,8 5,3 3,1 4,3 3,6 0,0 2,2
Mining and Quarrying (1.
0.6 (3.6) (4.4) (6.0) (3.4) 1.2 1.0 0.2 1.4 0.9 2.1 1.8 0.0 0.7 1.1 2.6 2.7 2.2 2.2 2,3 -0,7 2,3 0,9 1,2 0,4 -2,7
3)
Manufacturing 4.1 4.2 4.6 4.4 4.3 4.7 4.6 4.5 3.3 4.3 4.3 3.5 4.9 4.5 4.3 4.6 3.9 4.4 4.2 4.3 3,9 3,5 4,1 3,7 3,8 2,1 -6,2
Construction 6.0 5.4 6.8 7.1 6.4 6.8 5.1 5.0 4.2 5.2 6.0 7.0 7.0 7.2 6.8 7.4 5.7 5.8 5.6 6.1 5,9 5,7 5,6 5,8 5,8 2,9 -5,4
Wholesale and Retail
Trade, Repair of Car and 3.8 1.6 1.4 3.5 2.5 4.3 4.3 3.7 3.9 4.0 4.6 3.5 5.2 4.5 4.5 5.0 5.2 5.3 4.4 5.0 5,2 4,6 4,4 4,2 4,6 1,6 -7,6
Motorcycle
Transportation and
6.3 6.0 7.0 7.5 6.7 7.4 6.5 8.2 7.6 7.4 8.1 8.8 8.9 8.2 8.5 8.5 8.7 5.7 5.5 7.1 5,5 5,9 6,7 7,6 6,4 1,3 -30,8
Storage
Information and 10.
9.7 9.3 10.6 9.2 9.7 7.6 9.3 8.9 9.6 8.9 11.1 8.8 8.3 9.6 7.8 5.1 8.1 7.1 7.0 9,1 9,6 9,2 9,7 9,4 9,8 10,9
communication 5
Financial service 8.6 2.6 10.3 12.8 8.6 9.3 13.6 9.0 4.2 8.9 6.0 5.9 6.1 3.8 5.5 4.3 3.1 3.1 6.2 4.2 7,2 4,5 6,1 8,5 6,6 10,6 1,0
*
Other Services 5.1 6.5 4.8 5.5 5.4 6.0 5.6 4.5 3.8 4.9 4.2 3.5 4.8 6.0 4,6 5.4 6.2 6.7 6.4 6.2 6,8 7,3 6,4 6,2 6,7 4,6 -6,3
GDP 4.8 4.7 4.8 5.2 4.9 4.9 5.2 5.0 4.9 5.0 5.0 5.0 5.1 5.2 5.1 5.1 5.3 5.2 5.2 5.2 5,1 5,1 5,0 5,0 5,0 3,0 -5,3
Source: Central Bureau of Statistics of Indonesia (BPS)

*Other services consist of 10 sectors (according to Standard National 2008) 59
Majority of Regions Experienced Economic Growth Contraction
• Majority of provinces recorded a negative growth with the deepest contraction in Java and Balinusra region. The only two provinces of Papua and West Papua
grew positively.
• The contraction in economic growth in various regions was influenced by lower domestic demand as a result of the large-scale social restrictions, amidst
limited local Goverment fiscal stimulus. Nevertheless, a positive net exports recorded in several provinces on the back of positive growth in the mining sector.
A WIDESPREAD ECONOMIC GROWTH CONTRACTION IN THE SECOND QUARTER OF 2020
Source: Central Bureau of Statistics of Indonesia (BPS), calculated

60
Stronger Fundamentals Facing the Headwinds
Inflation Rate (%) IDR Movement (%) Foreign Reserves (USD bn)
IDR depreciated year-to-date in October 2020 Significantly higher than 1998 & 2008, ample to cover 9.1
Inflation controlled within the target range
months of import and external debt repayment
1998 -197
1998 82,4
1998 17,4
2008 -35
2008 12,1 2008 50,2
September ’20 12-Oct-20 (ytd) -5,56

Sep-15 1.42
6,8 (yoy) Sep-15 135,2
September’20
-300 -200 -100 0
Non-Performing Loan/NPL (%) More Liquid Market (%)

NPL level (gross) is below the maximum threshold of 5% Overnight interbank money market rate is
relatively lower
62
1998 30
2008 3,8
10,5
3.29
5,7
August 2020 3,22
1998 2008 September
Jul-15 ‘20
0 5 10 15 20 25 30 35 40
External Debt (Public & Private) to External Debt/GDP

Government Debt/GDP
FX Reserve Ratio Slightly higher than 2008, but significantly
Significantly lower than 1998 crisis Consistently well-maintained lower than 1998
8.6x 3.1x 27.4%

3.1x 100.0% 116.8% 33.2%
1998 2008 36.41% 37.3%
1998 2008 1998 2008
Q2- 2020
September 2020 Q2 - 2020
61
Outlook of Domestic Economy Remains Robust
...domestic economic growth is predicted to be moderated in 2020 and rebound in 2021
2019 and 2020 Economic Outlook
 Bank Indonesia projects economic growth in 2020 at the range 0.9%-1.9%, revised down from around 2.3%.
 Bank Indonesia projects inflation in 2020 within the target range, namely 3.0%±1%.
 Bank Indonesia projects current account below level 1.5% of GDP in 2020, revised down from around 1.5% of GDP.
 Bank Indonesia projects growth of outstanding loans disbursed by the banking industry in 2020 in the 6-8% range, revised down from
9-11% previously, in line with the revised economic growth projection in 2020.
Economic Growth Inflation CAD (% of GDP) Credit Growth
2018
5.17% 3.13% 2.98% 11.75%
Realization
2019
5.02% 2.72% 2.71% 6.08%
Realization
2020 0.9%-1.9% 3.0±1% below 1.5% 6.0-8.0%
Source : Bank Indonesia

62
Section 4
External Factor:
Improved External Resilience
External Sector Remains Resilient Supported by Adequate
Reserves and Sound Balance of Payments
Balance Of Payment Remains Solid Narrower Current Account Deficit
2013: 2014: 2015: 2016: 2017: 2018: 2019: 2020:
US$bn CA Deficit CA Deficit CA Deficit CA Deficit CA Deficit CA Deficit CA Deficit CA Deficit
US$bn (US$29.1bn) (US$26.7bn) (US$17.5bn) (US$16.9bn) (US$16.2bn) (US$30.6bn) (US$30.4bn) (US$6.6bn)
20 160
131,72
15 US$bn 3,99
8 0,0
10,52 120 6
10 -0,5
4 -1,18 -1,0
9,25
5 2
80 -1,5
1,44
0
0 -2,0
(2,90) -2
(6,17) -2,5
-5 -4
40 -3,0
-6
-10 -3,5
-8
(2,15)
-10 -4,0
-15 0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4TotalQ1 Q2 Q3 Q4 Q1 Q2 -12 -4,5
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2012 2013 2014 2015 2016 2017 2018 2019* 2020**
2013 2014 2015 2016 2017 2018 2019* 2020**
Current Account Capital and Financial Account Goods Services Primary Income Secondary Income Current Account (%GDP) (rhs)
Overall Balance Reserve Asset (rhs)

Trade Balance Surplus Continues Official Reserve Assets Increased to Reinforce External Sector Resilience
2013: 2014: 2015: 2016: 2017: 2018: 2019: 2020: FX Reserves as of September 2020: US$135.2.0 bn
Deficit Deficit Surplus Surplus Surplus Deficit Deficit Surplus
(US$4.10bn) (US$2.37bn) US$7.59bn US$8.83bn US$11.83bn (US$8.65bn) (US$3.24bn) (US$13.49bn) US$bn (Equiv. to 9.1 months of imports + servicing of government debt)
US$bn
Month
4,00 130 15
2,44 FX Reserves (LHS)
OG Non-OG Total 14
Month of Import & Debt Service (RHS)
3,00 120 13
12
2,00 110 11
9,1 10
100
1,00 9
8
90
0,00 7
6
80
-1,00 5
70 4
-2,00 3
60 2
1
-3,00
50 -
1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7
1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7
2013 2014 2015 2016 2017 2018 2019 2020 2013 2014 2015 2016 2017 2018 2019 2020
* Preliminary Figure ** Very Preliminary Figure

Source: BPS Source: Bank Indonesia 64
Exchange Rate In Line with Fundamentals
Movement of Rupiah
IDR/US$ 17.000 Consistent with Bank Indonesia's stabilisation measures, rupiah exchange rates
Quarterly Average
have remained relatively under control. In September 2020, the rupiah
16.500 depreciated 2.13% (ptp) in response to elevated financial market uncertainty
Monthly Average stemming from global and domestic factors. As of 12th October 2020, the
IDR/USD 16.000 rupiah gained 1.22% (ptp) or 0.34% on the average compare with level
15.711
14.673 recorded in September 2020 as foreign capital inflows to domestic financial
14893 15.500
15.179 markets were maintained in line with increasing global liquidity and maintained
14.530 14.806 14.756
14798 14.381 15.000 investor confidence in the domestic economic outlook. As of 12th October
14.220 14.232 14756 2020, therefore, the rupiah had lost around 5.56% of its value compared with
14254 14.113
14120 13.714 14.855 14.500 the level recorded at the end of 2019. Moving forward, Bank Indonesia expects
14700 the rupiah to regain lost value as the currency is still fundamentally
14669 14.000 undervalued, supported by low and stable inflation, highly attractive domestic
14.105
14134 14064 14219 financial assets for investment, a lower risk premium in Indonesia and
14.141 13.500
14.031 14.006 abundant global liquidity. Bank Indonesia will continue to strengthen exchange
data as of October 12th, 2020 rate stabilisation policy in line with the rupiah's fundamental value and market
13.000 mechanisms through effective monetary operations and by providing market
16-Aug
10-Aug
30-Aug
8-Jan
7-Jul
5-Sep
28-Jan
17-Feb
29-Mar
18-Apr
25-Sep
12-Feb
1-Jul
19-Sep
3-Jan
23-Jan
3-Mar
23-Mar
12-Apr
9-Nov
29-Nov
9-Mar
8-May
28-May
4-Nov
24-Nov
2-May
22-May
20-Oct
19-Dec
27-Jul
15-Oct
17-Jun
14-Dec
21-Jul
11-Jun
9-Oct
liquidity.

Rupiah Exchange Rate Fared Relatively Well Compared to Peers Rupiah Exchange Rate Volatilty
32,40
YTD 2020 vs 2019
2019
BRL -27,15 -22,13 YTD 2020
TRY -24,63 -16,11 25,20 Average YTD 2020
ZAR -15,21
-13,39 AVG 2019
IDR -5,56
-3,11
THB -4,51 18,10 18,00
-1,39 17,00 16,90
INR -2,59 16,00 15,55
-4,92
MYR -1,38
-1,98
SGD -0,83 10,10
point-to-point -1,74 10,90
KRW 0,81
-2,68 7,00 7,50 8,00
CNY 2,54 6,40 6,20
average -0,96 5,40 5,50 4,70
JPY 3,11
1,44
PHP data as of October 12th, 2020 4,56
3,58
EUR 5,08
0,67
ZAR BRL TRY IDR THB PHP INR MYR
-30,0 -25,0 -20,0 -15,0 -10,0 -5,0 0,0 5,0 10,0 65
data as of October 12th, 2020
Ample Lines of Defense Against External Shocks
Ample Reserves
 Ample level of FX reserves to buffer against external shock
FX Reserve
 FX Reserves as of of September 2020: US$135.2 bn
Swap Arrangement
 Renewed a 3 year USD22.76 billion swap line with Japan on October 14th, 2018
Japan  The facility is available in USD and JPY
South Korea  Renewed a 3 year KRW / IDR swap arrangement with the size of up to KRW 10.7 trillion / IDR 115 trillion in March 2020
Bilateral
Australia  Renewed a 3 year A$/IDR swap arrangement of up to A$10 billion or IDR 100 trillion in August 2018
Singapore  Renewed a one year SGD/IDR swap arrangement with a size up to USD10 billion (equivalent) in November 2019
 Renewed a 3 year swap arrangement and increased the size of swap line up to CNY 200 bn / USD 30 billion in
China November 2018
Malaysia  Established a 3 year RM/IDR swap arrangement with a size up to USD2 billion (equivalent) in September 2019
 Entitled to a maximum swap amount of USD600 million under ASA

ASEAN Swap
 The first MoU on the ASA was signed in 1977 among 5 ASEAN Central Banks with total facility USD100 million
Arrangement (ASA)
Doubled to USD2 billion in 2005
Regional
 Entitled to a maximum swap amount of US$ 22.76 bn under the ASEAN+3 (Japan, China, and Korea) FX reserves pool created under the
Chiang Mai Initiative agreement
Multilateralization
 Came into effect in 2010 with a pool of US$120 bn and
(CMIM) Agreement
 Doubled to US$240 bn effective July 2014
IMF Global Financial  Indonesia is entitled to access IMF facilities for crisis prevention to address potential (actual) BOP problem
Global
Safety Net - GSFN  Such facilities include Flexible Credit Line (FCL) and Precautionary and Liquidity Line (PLL)

66
Strengthened Private External Debt Risk Management
Debt Burden Indicator (External Debt/GDP) Remains Comparable to Peers Rating Encouraging Corporates Compliance on Hedging Ratio & Liquidity Ratio
External Debt/GDP (%) Hedging Ratio*

86,1
Uruguay 93,9
76,2 258; 167;
24,2
10.2% 6.6%
Philippines 24,7
22,2
36,3
Indonesia 35,3
36,1
48,7
Colombia 53 2021F ≤ 3 months > 3 - 6 months
42,7 2020F
53,6
Bulgaria 56,6 2019 2.351;
56,3 2.260;
93.4%
0 20 40 60 80 100 89.8%
Source: Moody’s Credit View Fundamental Data, July 2020

Liquidity Ratio*
Regulation on Prudential Principle in Managing External Debt
306;
Phase 1 Phase 2 Phase 3
Regulation Key Points Jan 1,2015 – Jan 1,2016 – Jan 1, 2017 & 12.2%
Dec 31,2015 Dec 31,2016 beyond
Object of Regulation Governs all Foreign Currency Debt
Hedging Ratio
< 3 months 20%* 25%**
> 3 – 6 months 20%* 25%**
2.212;
Liquidity Ratio (< 3 months) 50% 70%
87.8%
Credit Rating Not applicable Minimum rating of BB-
Must be done
Hedging transaction to meet not necessarily be done with a bank in
with a bank in Comply Not Comply
hedge ratio Indonesia
Indonesia
Sanction As of Q IV-2015 Applied *Data as of Q1 2020, with total population 2.518 corporates
Source: Bank Indonesia 67
Healthy External Debt Composition
External Debt Structure The Structure of External Debt is Dominated by Long-Term Debt
Private External Debt Public External Debt Short Term External Debt Long Term External Debt
100%
100%
90%
90%
80% 80%
49,1 70%
70%
60% 60% 83,8
50% 50%
40% 40%
30% 30%
50,9
20% 20%
10% 10% 16,2
0% 0%
External Debt Remains Manageable External Debt to GDP Ratio & Debt to Export Ratio
Million USD % % %
450.000 External Debt External Debt Growth (rhs) 20,0 37,3

220 36,1 36,0 36,8 36,5 36,2 36,1 40
17,1 34,3 34,7 34,5
400.000 18,0 32,9
200 31,8 35
16,0 29,1
350.000 27,4 197,5 30
26,5
14,0 180 25,0
300.000 11,5 12,0 183,3
11,3 25
12,0 176,1 177,3 177,8
10,2 10,1 9,9 10,4 172,1
Axis Title
250.000 160 168,4 168,0 168,5
8,1 10,0 160,8 20
200.000 7,5 140
6,5 8,0 15
5,4 5,9 External Debt / Export Ratio (rhs)
150.000 5,0 139,5
6,0 120
3,0 123,1 10
100.000 4,0 121,8 External Debt / GDP Ratio
100 114,9 113,8
50.000 0,6 5
2,0 101,0
0 0,0 80 0
Source: Bank Indonesia, External Debt Statistics of Indonesia, Aug 2020 *Provisional Figures **Very Provisional Figures 68
Manageable External Debt Profile
Short term non-bank corporate debt (non affiliation) represents only 9.5% of total private external debt
Public Long Term 1 Private Bank
Affiliation
US$203bn US$159.3bn US$18.6bn
or or or
49.1% 75.7% 8.8% US$12.6bn
of Total Ext. of Private Ext. of Private or
Debt Debt Ext. Debt 6.0%
External Debt
of Private
Position
Ext. Debt
US$210bn US$51.2bn
or US$32.6bn
or
50.9% or
US$413.4bn 24.3%
of total 15.5%
of Private
Ext. Debt of Private
Ext. Debt
Ext. Debt
Private
Non-Bank US$19.9bn
Short-Term1 or
9.5%
Private of Private
External Debt Position as of August 2020 Ext. Debt
1 Based on remaining maturity
Non Affiliation
Source: External Debt Statistics of Indonesia, October 2020
69
Solid Policy Coordination
In Managing Financial Markets Volatility
The enactment of Law No. 9/2016 regarding Prevention and

Mitigation of Financial System Crises as a legal foundation
for the government to serves at the time of financial crisis in
Gov’t Securities Crisis Management Protocol (CMP)
the form of Financial System Stability Committee (KSSK)  Indicators:
- Yield of benchmark series;
- Exchange rate;
- Jakarta Composite Index;
- Foreign ownership in government securities
KSSK members: the Ministry of Finance, Bank Indonesia, the
Financial Services Authority, and the Deposit Insurance  Policies to address the crisis at every level :
Corporation - Repurchase the government securities at secondary market
- Postpone or stop the issuance
Bond Stabilization Framework

Swap facility arrangements based on international
cooperation First Line of Defense
Buyback fund at DG of Budget Financing and
State’s Budget Risk Management
Investment fund at Public Service Agency
Enhancing coordination between government institutions (BLU) (min. level Aware)
and continuous dialogue with market participants State Owned Enterprises
(BUMN)’s Budget Related SOEs (min. level Aware)
Social Security Organizing

BPJS (min. level Aware)
Agency (BPJS)’s Budget
CMP Implementing Crisis Management Protocol (CMP) Second Line of Defense

State General Treasury Account (Rekening KUN)
(min. level Alert)
State’s Budget
Accumulated cash surplus (SAL) (min. Level Crisis)
BSF Implementing Bond Stabilization Framework (BSF)

Section 5
Fiscal Performance and Flexibility:
Strong Commitment in Maintaining Fiscal Credibility
Covid-19 Handling Focus In Indonesia
Pushing the economic stability with Protecting people’s health and saving lives, maintaining
purchasing power, and business continuity
The policy measures for handling and recovering the economy are focused at improving the demand side, and many target vulnerable communities and
MSMEs
EXPORT – IMPORT SUPPORTS MAINTAIN THE PRODUCTIVITY

Tax Incentives Tax Incentives
Customs and excise incentives Maintaining the Customs and excise incentives
Simplification & reduction of ber of import & household Providing leniency requirements of credit /
export restrictions consumptions financing / funding for MSMEs
Accelerating the export-import process for Providing payment relief for MSMEs
Reputable Traders Decreasing in benchmark interest rates
Improvement & acceleration of export-import Decreasing in Reserve Requirement
services and supervision through the National
Logistic Ecosystem (NLE) Maintaining
Preventing
Bankruptcy health/
public safety
MAINTAIN THE CONSUMPTIONS

Additional Groceries (basic food)
Additional pre-work cards
Electricity tariffs exemption
Additional Family Hope Program (PKH)
beneficiaries
Source: Ministry of Finance
72
State Budget Posture Amendment 2020
As a response to development needs for handling of pandemic COVID-19
Law (UU) No.20/2019 Presidential Regulation Presidential Regulation

• Deficit 1,76% (Perpres) No.54/2020 (Perpres) No.72/2020
• Deficit 5,07% • Deficit 6,34%
The Law on State Finance (Law With extraordinary and very Responding to the
No.17 of 2003) stipulates that urgent conditions, the State development needs of the
the budget deficit is limited to a Budget deficit policy exceeds Covid-19 pandemic handling
maximum of 3% of GDP and the the 3% limit, through the and to maintain the economy
amount of Government debt is enactment of Perppu No.1 / and financial system stability,
a maximum of 60% of GDP. 2020 (becoming Law No.2 / including running the National
2020). The magnitude of the Economic Recovery Program
2023 state budget deficit will (PEN).
return a maximum of 3%.
Deficit 1,76% Deficit 6,34% Changes
Budget Deficit IDR 307,22 T IDR 1.039,22 T IDR 732,00 T ▲

Perppu 1/2020 (Converted To Law 2/2020) as A Legal Basis for Government
In Taking Quick and Extraordinary Steps in Overcoming the Impact of the Covid-19 Pandemic and
National Economic Recovery
Extraordinary Government Policy

Legal Basis
Perppu 1/2020 concerning State Financial Policy and Financial
System Stability for Handling Covid-19 Pandemic and / or in the
PERPPU 1/2020 UU 2/2020 framework of Facing Threats that Harm National Economy and
(31st March 2020) (18th May 2020) or Financial System Stability stipulated into Law 2/2020
State Deficit
Undertaking Strategic Policies
Budget 1.76% PDB
2020 Refocusing and reallocation policies by suspending non-
priority activities, such as official travel and other
activities that cannot be carried out in the Covid-19
Perpres Deficit The budget has been
period.
revised twice to the
54/2020 5.07% GDP latest of Presidential Providing stimulus, both in the form of additional
Decree 72/2020, which spending, tax incentives, and government investment for
Perpres Deficit has incorporated the
handling Covid-19 and the National Economic Recovery
72/2020 6.34% GDP national economic
recovery initiation

74
STRATEGY TO SPUR RECOVERY THROUGH FISCAL POLICIES
Q3 2020 is the key to avoid a recession; optimizing the role of government is important to stimulate the economy
12
STRENGTHENING GOVERNMENT
13
11 CONSUMPTION (G)
Personnel spending as an instrument to

STRENGTHENING THE
CONSUMPTION (C)
PEN PROGRAM encourage growth:
EXECUTION & ACCELERATION • STRATEGY  Accelerate social
• Accelerated disbursement of salaries assistance spending
13
• The existing program that already has State • Modification of social protection
Budget Allocation (DIPA) needs to be • Acceleration spending to support new
spending THROUGH several options:
accelerated and the accuracy of targeting work patterns (WFH, WFS)
increasing the amount and
continues to be improved at the next stage of • Reallocation to support the
frequency, and extending period.
distribution digitalization of the bureaucracy;
• Shifting capex that is difficult to • This can be done through the
• The new program that data and delivery addition of a social protection
mechanism are available will be executed. execute to a faster disbursement (aim
to support the infrastructure for program index that is relatively
• New proposed programs that are not digitalizing public services). implementable (PKH, Basic Food
supported by valid data, and require complex Aid, Cash Transfer etc.)
• Relaxation of goods and services
regulatory changes, should be diverted to
procurement policies
existing implemented programs
75
NEW PROPOSAL FOR THE USE OF COVID-19 HANDLING COSTS
As the efforts to boost economic growth in the second semester
Health Social Securities Sectoral & Regional Gov’t Business Incentives
1. Incentives for Medical 1. The utilization of food 1. Support for MSMEs 1. Exemption from applying
and Non-Medical reserve/logistic fund (IDR2.4Mio per recipient) the minimum account
Personnel: 2. Social Security programs 2. Support for worker provisions for customers
• Incentives for middle income class affected by Covid-19 with electricity
extension up to Dec 3. Extension period of (IDR600K/month for 4 consumption below the
2020 Electricity bill Discount months for those who minimum account
• Reward for 4. Additional Electricity bill registered in BP Jamsostek
Incentives for Discount with salaries below 2. Exemption from social,
Medical and Non- New proposals that have been IDR5Mio) business and industrial
Medical budgeted: 3. Buying Local Product customer expense /
2. Support for Hospitals 1. Islamic Boarding Program for supporting subscription fees
by accelerating the School/Pesantren the MSMEs and cashback
procurement process assistance for program for MSMEs’
for medical stuff and implementation of health consumers
claim for hospitalization protocols and online
Note:
costs learning
The new proposal programs
3. New Normal 2. Rice aid for Family Hope
Program beneficiaries are funded by expansion
Socialization reserves and unused
3. Cash transfer IDR500K for
4. Covid-19 Vaccine government borne taxes
9Mio Basic Food
Supplies beneficiaries and non PKH
76
Burden Sharing Scheme Between Ministry of Finance and Bank Indonesia
Based on Usage Group: Public Goods vs Non-Public Goods
IMPACT LOADS COVID-19

IDR903,46 T Burden Sharing Scheme
Health
IDR 87.55 T
Issuance
Covered by BI specifically to BI
Public Goods Social Protection 1. Public Goods amounting to
IDR 397.56 T through private
IDR 203.90 T reverse repo rate placement
Sectoral K/L, Local Govt

IDR 106.11 T
Covered by
2. Non-Public Government
Micro small and Medium Goods: amounting to BI
Enterprises (MSME) • MSME reverse repo 3M Issuance through
IDR 123.46 T minus 1%, and
• CorporationN market mechanism
Non-Public on-MSME rest of covered by (auction, Green
Goods Corporation Non-MSME BI Shoe Option,
IDR 505.90 T IDR 53.57 T Private Placement
according to the
Others SKB on April 16,
IDR 328.87 T 2020)
Full Covered by
3. Non-Public Government
Goods: Others amounting market
The Covid-19 impact burden consists of expenses for Public Goods and rate
Non-Public Goods with different Burden Sharing Schemes for each
usage group.
Financing Strategy 2020
Opportunistic, Measured, and Prudent Financing Strategies to support State Revenue and Expenditure Budget (APBN) 2020
in accelerating the handling of COVID-19 and protecting the economy from the threat of crisis
Non-Debt Financing Sources

Optimization of Debt and  SAL
Non-Debt Financing  Government Endowment Fund Post
Budget Financing 1 Sources  Fund sourced BLU
2020
Cash Loan Flexibility Flexibility of adding SBN

 Upsize the issuance of Domestic SBN and Foreign
Upsize Program Loans from Denominated SBN (USD10 -12 billion) with regard to
Development Partners, both financial market conditions
bilateral and multilateral, 3  Open opportunity for Private Placement requests from
ex. World Bank, ADB, AFD, KfW, SOE/Institution
JICA, EDCF, and AIIB ex. LPS, BPKH, and others
Prioritize SBN publishing through Bank Indonesia support as a

market mechanisms
4 last resort / back stop
financing source
5

Government Securities
For 2nd Semester according to Presidential Regulation 72/2020
The government can issue SBN for financing the PEN program
purchased by Bank Indonesia in the primary market (Article 21
Auction PP 23/2020).
Foreign
Denomina- Retail SKB between the Government & BI phase I has been agreed
ted GS and carried out since the SBN auction April 21, 2020.
Government
Securities
(GS)
(gross)
IDR 900.4 T Phase II SKB has been signed, will be implemented in stages
according to the real needs of financing
Private GS for BI
Placement Special Plans for project foreign activities / 2020 in the amount of IDR
Scheme 29.5 T
•Project loan plans for 2nd semester IDR 24.2 T
Planned withdrawal of 2020 program loans totaling USD 7.3

With the purchase of SBN to BI through a private billion.
placement of IDR 397.56 T, the supply of SBN to the
market in the Second Semester of around IDR 453 T is •Withdrawal of 2nd Semester program loans in the amount of eqv. USD
still quite reasonable: 5.5 billion.

2020 BUDGET REALIZATION AS OF SEPTEMBER 2020
2019 2020
Realization of Realization of
Budget % of Budget Growth (%) Budget % of Budget Growth (%)
September 30 September 30
Revenue 2165.1 1342.2 62.0 2.3 1699.9 1158.9 68.2 (13.7)
Domestic Revenue 2164.7 1341.3 62.0 3.6 1698.6 1153.3 67.9 (14.0)
Taxation Revenue 1786.4 1039.5 58.2 1.5 1404.5 892.4 63.5 (14.1)
Tax Revenue 1577.6 902.8 57.2 0.2 1198.8 750.6 62.6 (16.9)
Custom and Excise 208.8 136.6 65.4 10.5 205.7 141.8 68.9 3.8
Non Tax Revenue 378.3 301.8 79.8 7.1 294.1 260.9 88.7 (13.6)
Grant 0.4 0.9 223.4 (85.0) 1.3 5.7 436.9 483.9
Expenditure 2461.1 1594.7 64.8 5.4 2739.2 1841.1 67.2 15.5
Central Government Expenditure 1634.3 999.3 61.1 6.4 1975.2 1211.4 61.3 21.2
Ministerial Expenditure 855.4 556.1 65.0 8.7 836.4 632.1 75.6 13.7
Non Ministerial Expenditure 778.9 443.2 56.9 3.7 1138.9 579.2 50.9 30.7
Regional Transfer and Village Fund 826.8 595.3 72.0 3.8 763.9 629.7 82.4 5.8
Regional Transfer 756.8 551.3 72.9 2.9 692.7 572.0 82.6 3.8
Village Fund 70.0 44.0 62.9 16.1 71.2 57.7 81.0 31.0
Primary Balance (20.1) (43.2) 215.2 (700.4) (447.3) 63.9
Surplus/(Deficit) (296,0) (252.4) 85.3 26.3 (1039.2) (682.1) 65.6 170.2
to GDP (1.84) (1.57) (6.34) (4.16)
Financing 296,0 307.8 104.0 4.6 1039.2 784.7 75.5 154.9
80
Government Securities Financing Realization
(as of Sep 30, 2020)
(Trillion IDR)
Realization
(ao. Sep 30, 2020
GS Matured Government Securities (GS) 1,102.97
2020 Government Debt Securities (GDS) 793.49
IDR Denominated GDS 486.52
- Coupon GDS 355.44
- Conventional T-Bills 43.06
- Private Placement 67.42
- Retail Bonds 20.59
Foreign Denominated Bonds 123.49
Issuance 2020 GS Nett - SEC USD-EUR REG SHELF TAKE-DOWN* 42.52
- Samurai Bond**** 13.43
- SEC USD REG SHELF TAKE-DOWN** 67.54
- USD Onshore Bonds 0.00
Special Instrumen 183.48
Sovereign Sharia Securities (Sukuk) 309.48
Domestic Sovereign Sharia Securitoes 273.82
SUKUK - IFR/PBS/T-Bills Sukuk (Islamic Fixed Rate Bond/Project Based Sukuk 173.22
- Retail Sukuk 37.81
GDS - Private Placement 62.80
Global Sukuk*** 35.66
* Dual-currency bonds issuance using SEC format amounted USD2 bn and EUR1 bn, settlement on January 14, 2020 (BI mid day exchange rate; 1 USD = 13,654 IDR & 1 EUR = 15,207.83 IDR)
** Global bonds issuance using SEC format amounted USD4.3 bn, settlement on April 15, 2020 (BI mid day exchange rate on April 15, 2020; 1 USD = 15,707 IDR)
*** Global Sukuk issuance amounted USD2.5 bn on June 16, 2020, settlement on June 23, 2020 (BI mid day exchange rate on June 16, 2020; 1 USD = 14,265 IDR)
**** Samurai bonds issuance using public offering amounted JPY100bn, settlement on July 8, 2020 (BI mid day exchange rate on July 2, 2020 : 1 JPY = 134.34 IDR)
81
FISCAL POLICY DIRECTION IN 2021
Responding changes in economy, challenges, and support development targets
ACCELERATING ECONOMIC RECOVERY AND

STRENGTHENING REFORM
EFFECTIVENESS OF ACCELERATION FISCAL FLEXIBILITY

EXIT STRATEGY MIDDLE ANTICIPATING
CONTROLLING ECONOMIC (PRUDENT &
INCOME TRAP UNCERTAINTY
COVID-19 RESTORATION (PEN) SUSTAINABLE)
82
SUMMARY STATE BUDGET 2021
Accelerating Economic Recovery and Strengthening Reforms
1. The global and domestic economy in 3. The 2021 State Budget will continue
2021 will still be in uncertainty. the expansionary-consolidative
Pandemic handling efforts and the countercyclical policy by taking into
availability of vaccines will determine the account flexibility in responding to
acceleration of economic recovery economic conditions and encouraging
prudent and sustainable fiscal
2. The 2021 State Budget deficit of 5.70 management
percent of GDP is aimed at maintaining
the momentum of economic growth, as 4. National development priorities will
well as avoiding opportunity losses in focus on Health, Education, Information
encouraging the achievement of national and Communication Technology, Food
development targets Security, Social Protection, Infrastructure,
and Tourism.
83
Macroeconomic Assumption and State Budget for 2021
Expansive-consolidative fiscal policy for the acceleration of Economic Recovery and strengthening the reforms
STATE BUDGET 2021

DEVELOPMENT TARGET
Grant 0,9
Growth: Non tax Revenue

Poverty level 5.0 % 298.2
Central
9.2 – 9.7% Inflation: REVENUE Government
3.0% Spending
Penerimaan
Tax Revenue
Perpajakan 1,743.6
Exchange rates: 1,954.5
Unemployment
Rate Rp14.600/USD 1,444.5
7.7 – 9.1% 1.618,1 EXPENDITURE
10-year Gov’t Bond:
7.29%
2,750.0
GINI Ratio ICP (Oil Price):
0.377 – 0.379 US$45 per barel
Oil Lifting: DEFICIT
705 thousand barrel/day FINANCING Regional
(1,006.4) Transfer and
HDI Gas Lifting:
(5.70% PDB)
1,006.4 Village Fund
72.78-72.95 1,007 thousand barrel
(equal oil per day) 795.5
84
STATE BUDGET 2021 COMPREHENSIVELY DESIGNED TO SUPPORT THE ACCELERATION OF
NATIONAL ECONOMIC RECOVERY AND ANTICIPATE AN ECONOMIC SLOWDOWN
DUE TO THE COVID-19 PANDEMIC
State Revenue: IDR 1,743.6 trillion Budget Deficit

• Supporting national • Cutting the red tape • Improving public 2020 Pres
economic recovery by services to Reg. 2021
to accelerate national 2015 2016 2017 2018 2019 72/2020 Budget
providing tax incentives economic recovery optimize non-tax 0 00
selectively and prudently revenue
-142,5
-125,6
-124,4
-11,5
-73,1
-269,4
calculated
-298,5
-308,3
-348,7
-341
-01
-200
Expenditure: IDR 2,750.0 trillion
-633,1
-700,4
-02
-400 -1,82
• Handling • Continuing social • Expanding access • Supporting
-1.006,40
-2,20
-1.039,20
COVID-19 and safety net to lay a to capital for programs -2,59 -2,49 -2,51 -03
supporting solid foundation of MSMEs and activities for -600
health programs inclusive economic cooperatives impacted
-04
recovery through interest sectors (e.g.
subsidy Tourism) -800
-05
Financing: IDR 1,006.4 trillion
• Increasing access to • Continuing to -1000
-06
• Supporting the -5,70
financing for MSMEs support higher
restructuring of SOEs,
and housing for low- education,, -6,34
PSA, Sovereign Wealth -1200 -07
income household research and
Fund (SWF) Deficit (Rp Trillion) Primary Balance (Rp Trillion) % Deficit to GDP (RHS)
cultural activities
85 For further queries please send an email to IRU@kemenkeu.go.id

STRATEGIC POLICY IN 2021
Supporting the accelerated recovery and the economic transformation
11 12 13 14
EDUCATION (IDR550.0T) HEALTH (IDR169.7T) SOCIAL PROTECTION (IDR421.7T) INFRASTRUCTURE (IDR413.8T)

Strengthening the quality of Accelerating health recovery Supporting social protection Provision of infrastructure for basic
education through increasing due to Covid-19, implementing reform  comprehensive social services, improving connectivity, and
PISA scores and strengthening National Health Insurance (JKN) protection system based on the supporting economic recovery, and
Early Childhood Education reforms and preparing Health life cycle and anticipating the aging continuing pending priority programs
(PAUD) administration and Security Preparedness population
increasing teacher competences
15 16 17
FOOD SECURITIES (IDR104.2T) TOURISM (IDR15.7T) ICT (IDR29.6T)

Increase food production and support economic Encouraging the recovery of the Optimizing the use of ICT to support and
recovery through revitalizing the national food tourism sector with a focus on 5 areas improve the quality of public services
system and developing Food Estate and developing a PPP scheme (efficiency, convenience and acceleration)
86
GS Primary Market Performance 2019-2020
Through Auction
[IDR Trillion] Incoming Bids Awarded Bids % Bid to Cover Ratio (RHS)
400 7,00
6,50
350
6,00
Average
Average 5,14
300 Incoming
Awarded
Bid 2019 = 5,00
IDR35.48T/ Bid 2019
auction =
IDR14.14T
250 /auction 4,24
3,91 4,00
200
3,14 3,35
3,112,80 3,17
2,97 3,00
3,01
150 2,59
2,34 2,44 2,45
2,12 2,15
2,11 1,97 2,00
100 1,98
1,00
50
- -
Average incoming bid in 2020 = IDR55.16 tn/auction while average awarded bid in 2020 = IDR15.05 tn/auction

Republic of Indonesia - USD3.1bn Equiv. Dual-Currency Offering
On January 7, 2020, the Republic of Indonesia priced a transaction comprising EUR1 bn and USD2 bn in senior unsecured notes.
Transaction Highlights
Issuer Republic of Indonesia
Issuer Rating Baa2 Moody’s (Stable) BBB
S&P (Stable) BBB Fitch
• Leveraged a brief market window of stability to price inside fair value levels by 1 bp
for the EUR tranche and at a de minimis concession inside 1 bp for the 10- and 30-
year USD tranches
Exp. Issue Rating
(Stable)
Baa2 (Moody’s) / BBB (S&P) / BBB (Fitch)
• Record-low yields, spreads, and coupons by EUR and USD financing by the GoI in
each tenor
Issue U.S. SEC-registered shelf takedown Fixed • High-quality and price-insensitive demand allowed compression of 27 bp for the
EUR tranche and 25 bp and 20 bp for the 10- and 30-year USD tranches,
rate senior unsecured notes
respectively
Aggregate Size USD3,100 mm equiv.
• Harnessed a particularly strong bid for duration to price benchmarks which
prompted a rally in the long-end of Indonesia’s curve once the new bonds were
EUR 7-year USD 10-year USD 30-year freed to trade
Maturity February 14, 2027 February 14, 2030 February 14, 2050
Tranche Size EUR1,000 mm USD1,200 mm USD800 mm
Coupon 0.900% p.a. 2.850% p.a. 3.500% p.a.
(ACT/ACT) (30/360) (30/360)
Reoffer Price 99.638% 99.737% 99.077%
Reoffer Yield 0.953% p.a. 2.880% p.a. 3.550% p.a.
Benchmark €MS (-0.077%) UST10 (1.828%) Old UST30 (2.311%)
(Yield) DBR 02/15/27
(-0.446%)
Spread to €MS + 103 bp + 105.2 bp + 123.9 bp
Benchmark DBR + 239.9 bp
Denominations EUR100k /EUR1k USD200k/1k USD200k/1k
Listing / Law Singapore, Frankfurt Open Market listing / New York law
Use of Proceeds For general purposes, including to partially fund

general financing requirements

Republic of Indonesia – USD4.3bn Global Bonds Issuance
On April 7, 2020, the Republic of Indonesia priced a transaction comprising USD4.3bn in senior unsecured notes

Investor Breakdown by Investor Breakdown
Issuer Rating Baa2 Moody’s (Stable)
Region BBB S&P (Stable) by Investor Type
BBB Fitch (Stable)
RI1030 Exp. Issue Rating Baa2 Moody’s / BBB S&P / BBB Fitch
9% RI1030 RI1050
RI1050
Format U.S. SEC registered 10% 1%
1% 2% 3%
2% 1%
21%
45% Issue Senior unsecured fixed rate notes 4%
1%
26%
22%
Pricing Date April 6, 2020
52% Settlement Date April 15, 2020
25% 20%
Aggregate Size USD4,300 mm 64%
71%
20%
RI0470 Long 10.5-year Long 30.5-year Long 50-year
1% 1% 1%
18% 1%
Maturity Oct 15, 2030 Oct 15, 2050 Apr 15, 2070
10% 11%
9%
Tranche Size USD1,650
1% mm USD1,650 mm USD1,000 mm RI0470
21% 44%
45%
Coupon (p.a.) 4%3.850% 4.200% 4.450%
25% Reoffer Price 1% 99.573 99.150 99.009
38%
Reoffer Yield (p.a.) 3.900% 4.250% 4.500% Asset Managers
US Europe Asia ex-Indonesia Indonesia Insurance/Pension Fund 85%

Listing Singapore, Frankfurt Open Market
Central Bank/Sovereign Wealth Fund
Law New York Banks
Use of Proceeds For general purposes of the Republic of Indonesia, including Private Banks
20% financing COVID-19 relief and recovery
64%
Others
 Net proceeds will be used for general purposes of the Republic, including financing COVID-19 relief and recovery efforts for the Republic to contain the virus and mitigate its impact on
Indonesia.
 The Republic's fiscal policy amidst volatile market conditions includes support for healthcare, the social safety net, and small and medium enterprises.
 The debut 50-year offering on strong demand in the long end of the curve.
 The transaction is the largest global offering by the Republic and demonstrates the Republic’s ability to respond swiftly to markets and capture favorable issuance windows.

Republic of Indonesia – USD0.75bn Green Sukuk Global
& USD1.75bn Sukuk Global Bonds Issuance

Issuer Rating Baa2 Moody’s (Stabil)
BBB S&P (Negative)
BBB Fitch (Stabil)
Format 144A / Reg S, Senior, Unsecure, Wakala US$ Trust Certificate (“Sukuk”) issued
under a USD$2.5 billion Trust Certificated Issuance Programme
Pricing Date June 16, 2020
Settlement Date June 23, 2020
Aggregate Size USD2,5bn
5Y Green Sukuk 10Y Sukuk USD 30Y Sukuk USD
Maturity June 23, 2025 June 23, 2030 June 23, 2050
Tranche Size USD0,75bn USD1bn USD0,75bn
Coupon 2.3% Fiixed 2.8% Fixed 3.8% Fixed
Reoffer Spread UST +195.3bps UST +204.7bps UST +227.7bps
Others Details USD200k/ik denoms, English/Indonesia Law
Listing Singapore Stock Exchange and NASDAQ Dubai (dual listing)
 Second ROI transaction priced since COVID-19 pandemic
 The transaction is the lowest ever 5-year and 10-year yield achieved by the Government across both conventional
and Sukuk issuances in the US$ market.
 The transaction is the first ever 30 year Sukuk issuance by the Government with the lowest coupon ever of Global
Sukuk issuance in the world and the largest ever 30 year Sukuk from Asia.
 The transaction has oversubscription of 6.7 times. With the size of orderbook, Government can press the pricing
down by 70 bps from the initial price guidance (IPG) and well below its indicative fair value.

Republic of Indonesia - JPY100bn Samurai Bond
Issuer Republik of Indonesia
Bond Rating Baa2 Moody’s, BBB S&P , BBB Fitch
Format Samurai Bond (Public Offering), Reg S only

Pricing Date July 2, 2020
Settlement Date July 8, 2020
Deal Size JPY100bn
3Y FXD 5Y FXD 7Y FXD 10Y FXD 20Y FXD
Maturity July 7, 2023 July 8, 2025 July 8, 2027 July 8, 2030 July 6, 2040
Tranche Size JPY 50.7bn JPY24.3bn JPY10.1bn JPY13.4bn JPY1.5bn

Coupon 1.13% 1.35% 1.48% 1.59% 1.80%
Reoffer Spread YSO+110bp YSO+130bp YSO+140bp YSO+145bp -
Lead Managers Daiwa / MUMSS / Nomura / SMBC Nikko
 First Sovereign Samurai issuance in 2020 and the first issue from Asian after the pandemic
declaration and part of the proceeds will be allocated to various projects in response to COVID-
19
 RoI’s achievements of successful pricing of benchmark sized transaction while significantly
reducing average premium over its US dollar secondary curve across tenor, contributed to
encourage the market and proved strong presence of RoI as a leading Samurai bond issuer.

Disciplined and Sophisticated Debt Portfolio Management
Stable Debt to GDP Ratio Over the Years Prudent Fiscal Deficit
IDR Tn Government Debt / GDP (%)
500 442 446,3 0,0%
36,41% 407 414,52
40,00%
864,3 400 362
5.000,0 30,18% -0,5%
35,00%
29,40% 29,81% 300
27,43% 28,33% 764,5
4.000,0 810,7 30,00%
24,74% 200 -1,0%
746,2 25,00%
734,8 100
3.000,0 19 14 -1,5%
755,1 20,00%
4.892,6 0
677,6 -4 (20) (9)
2.000,0 4.014,8 15,00% -1,8% (35)
3.612,7 -100 -58 (56) -2,0%
3.248,6 -69 (66)
2.780,6 10,00% -200
2.410,0
1.000,0 1.931,2 -2,2% -2,5%
5,00% -300 -2,5% -2,5% (269)
- 0,00% -2,6%-298 (308)
-400 (341) (349) -3,0%
2014 2015 2016 2017 2018 2019* Sep 2020** 2015 2016 2017 2018 2019
Bond Loan Debt/GDP Ratio [RHS]
Note: *) as of end of December 2019, GS Nett Loan Nett Non-Debt
**) Preliminary number using GDP assumption Surplus (Deficit) Budget Ratio Deficit to GDP
Weighted Average Debt Maturity of ~8.8 Years Well Diversified Across Different Currencies
% of Yearly Issuance
9,6
9,39
9,4 100% 1% 1% 1% 1% 1%
7% 6% 6% 5% 6%
9,2 9,13 4% 4% 4% 5% 5%
80%
9 31% 29% 30% 27% 25%
8,8 8,68 60%
8,59
8,6 8,52
8,37 40%
8,4
57% 59% 58% 62% 63%
8,2 20%
8
7,8 0%
2015 2016 2017 2018 2019 Sep-20 2016 2017 2018 2019 Sep-20

IDR USD EUR JPY OTHER
Well Balanced Maturity Profile with Strong Resilience
Against External Shocks
Interest Rate Risks Declining Exchange Rate Risks
Currency Risk (%)

Interest Rate Risk (%)
50,00 44,55
25 42,57
45,00 41,26 41,03
20,65 19,74 37,86
19,22 18,7 40,00 36,77
20 17,52
16,13 35,00
15 13,72 30,00
12,14 11,45
10,57 10,57 25,00
9,75
10 20,00
12,23 12,06 12,13 12,23 13,39
15,00 11,43
5 10,00
5,00
0 0,00
2015 2016 2017 2018 2019 Sep-20 2015 2016 2017 2018 2019 Sep-20
VR Proportion Refixing Proportion FX to GDP Ratio FX Proportion
Debt Maturity Profile Upcoming Maturities (Next 5 Years)

IDR tn
600
IDR Denominated (Triliun Rp) Refinancing Risk (%)
500
Other Currencies (Triliun Rp) 45 41,03 40,67
39,29 40,4
400 183 40 35,98
165 192 190 34,67
182 35
300 135
13813894100 30 25,5
25,01 24,34 24,22
200 53 25 22,69
21,4
295 284306279 19
241 249 101,8 20
100 19918020719819033 27 36 9 33
37 156 4 27 15
95101 84 98 3
28 87 61 57 25 32 10,63
43 33 3 36
21 18 39 28 32 20 39 54 8,35
9,92
8,07 8,44
- - 16 20 - 10 6,46
2046
2047
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
2045
2048
2049-2070
5
0
2015 2016 2017 2018 2019 Sep-20
Note: 1. *) as of end of December 2019, preliminary number and using GDP assumption 1 Year 3 Year 5 Year
Holders of Tradable Central Government Securities
More Balance Ownership In Terms of Holders and Tenors
Holders of Tradable Gov’t Domestic Debt Securities Foreign Ownership of Gov’t Domestic Debt Securities by Tenor
100%
100%
27,0%
38,2% 37,5% 37,7% 38,6% 34,8% 31,2%
80% 39,8%
80% 36,0% 37,0% 38,6%
44,7%
60% 60%
35,8%
37,4% 36,8% 34,1%
39,0% 35,6% 35,3%
37,8% 39,9% 38,2% 39,8% 38,6%
40%
36,8% 42,0% 40,3% 37,5% 37,7%
40%
27,0%
20% 37,2% 20% 22,0% 23,1%

17,8% 17,3%
18,4%
23,9% 22,5% 23,4% 21,1%
20,3% 11,8%
5,1% 4,2%
5,3% 1,9% 6,7%
1,3% 5,0% 4,3% 6,2%
0% 0% 3,2% 3,5% 2,4%
Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 Sep-20
Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 Sep-20
Foreign Holders Domestic Non -Banks Domestic Banks 0-1 >1-2

>2-5 >5-10
>10 % Foreign Ownership of Total

Ownership of IDR Tradable Central Government Securities
(as of September 30, 2020)
(IDR tn)
Description Dec-16 Dec-17 Dec-18 Dec-19 Sept 30,2020
Government
Banks* 399.46 22.53% 491.61 23.41% 481.33 20.32% 581.37 21.12% 1,288.60 37.23%
Institution
Govt Institutions (Bank Indonesia**) 134.25 7.57% 141.83 6.75% 253.47 10.70% 262.49 9.54% 234.79 6.78%
BANK
Bank Indonesia (gross) 157.88 8.90% 179.84 8.56% 217.36 9.18% 273.21 9.93% 640.59 18.51%
GS used for Monetary Operation 23.63 1.33% 38.01 1.81% -36.11 -1.52% 10.72 0.39% 405.81 11.72%
NON-BANK Non-Banks 1,239.57 69.90% 1,466.33 69.83% 1,633.65 68.98% 1,908.88 69.34% 1,938.01 55.99%
Mutual Funds 85.66 4.83% 104 4.95% 118.63 5.01% 130.86 4.75% 150.14 4.34%
MUTUAL FUND Insurance Company and Pension Fund 325.52 18.36% 348.86 16.61% 414.47 17.50% 471.67 17.13% 523.43 15.12%
INSURANCE &
PENSION FUND Foreign Holders 665.81 37.55% 836.15 39.82% 893.25 37.71% 1,061.86 38.57% 933.15 26.96%
FOREIGN Foreign Govt's & Central Banks 120.84 6.81% 146.88 6.99% 163.76 6.91% 194.45 7.06% 192.17 5.55%
Individual 57.75 3.26% 59.84 2.85% 73.07 3.09% 81.17 2.95% 137.18 3.96%
INDIVIDUAL
Others 104.84 5.91% 117.48 5.60% 134.22 5.67% 163.32 5.93% 194.10 5.61%
OTHERS
Total 1,773.28 100% 2,099.77 100% 2,368.45 100% 2,752.74 100% 3,461.40 100%
Portion of foreign ownership

on January 24, 2020, foreign holders
in the mid & long term sector
reach a record high in nominal terms.
(≥ 5 years).
1) Non Resident consists of Private Bank, Fund/Asset Manager, Securities Company, Insurance Company and Pension Fund.
2) Others such as Securities Company, Corporation, and Foundation.
*) Including the Government Securities used in monetary operation with Bank Indonesia.
**) net, excluding Government Securities used in monetary operation with Banks.

Section 6
Commitment to Sustainability and
Climate Change Mitigation
Commitment to Sustainability and Climate Change Mitigation
Republic of Indonesia’s Commitment to Sustainability Including Climate Change Mitigation
Background
Commitment to Sustainability Forefront of Environmental Protection The President’s Nawacita Programme
Commitment to implement the United Nation’s (“UN”) Indonesia’s Environmental Law was enacted in 2009 based The “Nine Agenda Priorities” of the President’s
Sustainable Development Goals (“SDG”) in order to achieve the on the concept of sustainable development, prevention, priority actions. Shifting to a low-carbon and
2030 development agenda introduced by the UN. Through precaution and a “polluter pays” principle. To better climate-resilient development path is an
Presidential Regulation No. 59/2017 relating to the address environmental issues, the Ministry of Environment integral part of this mission and is integrated in
implementation of SDGs in Indonesia, the National and the Ministry of Forestry were merged to become the development policies, strategies and programs
Development Planning Agency was instructed to present a Ministry of Environment and Forestry in October 2014
roadmap to implement the SDGs
Indonesia’s Environmental Commitment andObjectives
Mitigation Adaptation Biodiversity
• Adopted the National Action Plan for Greenhouse Gas Emission • National Action Plan on Climate Change Adaptation: National • Indonesia is an archipelago made up of 17,504
Reduction in 2011. framework for adaptation initiatives mainstreamed into the islands with unique ecosystems containing a
• Focuses on reducing greenhouse gas emission through a National National Development Plan. large number of diverse species.
Determined Contribution with an unconditional reduction target of • Medium Term Development Plan 2020-2024 (RPJMN): reflects • Indonesian Biodiversity Strategy and Action Plan
29% by 2030 compared to the 2010 baseline. An additional 12% Indonesia’s strong commitment to shift to a low carbon 2015-2020: launched to provide an outline on
reduction is conditional on technology transfer, capacity building, development based approach to economic development and a how biodiversity could be utilized sustainably
results for payment and access to finance. more climate resilient path. Includes key priorities such as to improve economic and development
• Environmental Fund Management Agency (BPLDH): established in renewable energy and energy efficient development, forest opportunities.
October 2019 with the vision to create a trusted institution to attract conservation and reforestation, waste management, land
national and international donors as well as effectively mobilize public intensification, food security as well as governance and
and private fund in order to support protection programmes. institutionalization of investment and regulation.
Source: Green Sukuk Report 2020, Bank Indonesia, Ministry of Finance
97
Indonesia’s Existing Green Bond and Sukuk Framework
Existing Green Bond and Sukuk Framework under which the Republic of Indonesia
can Finance and Refinance Selected Eligible Projects
1 2 3 4
Use of proceeds Project Evaluation Management of Proceeds Reporting
of Green Bond and Selection Management- Ministry of Finance
and Green Sukuk Ministry of Finance will
Review and approval The Green Bond and Green Sukuk proceeds prepare and publish a
Eligible Green process by Ministry of will be credited to a designated account of Green Bond and Green
Projects must fall Finance and National relevant ministries for funding exclusive Sukuk annual report
into one of the Development Planning projects as previously defined. Allocation is on the list of projects,
nineeligible Agency managed by Ministry of Finance. amounts of proceeds
sectors allocated to such
Line Ministries projects and
The line ministries utilizing the proceeds estimation of
shall track, monitor and report to beneficial impacts
Ministry of Finance, on the
environmental benefits of the Eligible
Green Projects
The Framework has received a second opinion from the Centre for International Climate Research (CICERO) and is awarded medium
green shading, which allows the possibility of light, medium and dark green project types. This shade also shows that eligible listed
projects are representing the country ongoing efforts towards the long-term vision in carbon emission reduction
Source: Indonesia’s Green Bond & Green Sukuk Framework
98
Indonesia’s Existing Green Bond and Sukuk Framework (Cont’d)
Existing Green Bond and Sukuk Framework under which the Republic of Indonesia can
Finance and Refinance Selected Eligible Projects
Source: Green Sukuk Issuance Allocation and Impact Report (February 2020)
99
Indonesia’s Green Initiatives: Financing Green Projects
Development of Indonesia’s Green Projects Financing
The Republic of Indonesia has issued two sovereign global Green Indonesia has continued to develop the Green market through the introduction of the first Retail
Sukuk, consecutively in February 2018 and 2019, with the total Green Sukuk in the world (Savings Retail Sukuk, ST006) in November 2019. The ST006 is an
amount of USD 2 Billion investment instrument based on Sharia principles issued and sold to individual Indonesian citizens in
the domestic market with an online platform. Allocation and impact of the Retail Green Sukuk is not
2019 Issuance 2018 Issuance included in the Green Sukuk Issuance Allocation and Impact Report issued in February 2020
USD 750 million USD 1.25 billion
(or IDR 11.25 trillion) (or IDR 16.75 trillion)
29% allocated to Green investors* 29% allocated to Green investors*
Each issuance comprised of:

and 49% financing new projects
51% refinancing existing projects
Allocation by Sector
Managed by 3
Ministries:
Note: Information extracted from Green Sukuk Issuance Allocation and Impact Report (February 2020), and subject to change and assurance from PwC.
Projects were financed in Indonesian Rupiahs and the currency exchange rate based on the State Budget Assumption for 2019 budget year of IDR 15,000 per USD was used to re-calculate the spent amount on each project
*These statistics are based on the HSBC’s in house assessment of investor ESG/ SRI appetite and sophistication, which is developed from Market Intelligence and our own understanding from client conversations. A green classification is assigned to
investors taking into account whether they have Green/SRI fund and/or strategy, whether they are signatories of a variety of SRI initiatives and with awareness to their broader activities / public announcements in the SRI market. Classifications evolve over
time
100
Indonesia’s Green Initiatives: Projected Environmental Benefits
Environmental Benefits Arising from Indonesia’s Green Sukuk Issuance
3,218,014.41
tonnes
CO2e emissions reduced, towards
a low carbon future
691.4 km
of railway constructed,
linking the nation
7,429 kWh 2,056,200

of additional power of households benefitting from
generation capacity improved waste management
Source: Green Sukuk Issuance Allocation and Impact Report (February 2020)
101
Tangible Results from Indonesia’s Green Sukuk Initiatives
Green Projects Refinanced and Financed with Proceeds from Indonesia’s Green Sukuk Issuance
Renewable Energy Resilience to Climate Change Waste and Waste to Energy Management
Locations Across the country Across the country Across the country
Amount Committed to
USD4.31 mil USD96.57 mil USD10.83 mil
Finance 2019 Projects
Amount Committed to USD63.13 mil

USD39.62 mil -
Refinance 2017 Projects
Target Impact / 134,872.41 tonnes of CO2e - In order to achieve 48,000,000 tonnes target set in RAN-GRK
Emissions Reduction (2017)
• Planning, Development and Supervision of New, • Construction of Flood Control Facilities (Financing) • Improvement of Municipal Solid Waste Management
Renewable Energy and Energy Conservation System (Refinancing)
Infrastructure (Refinancing and Financing)
Construction of retention ponds/polders, flood canals, dikes,
Construction of new and renewable energy infrastructure, checkdam, and river maintenance and normalization. It aims Improvement of basic waste management infrastructure
with a focus on areas outside current electricity coverage. to reduce the risk of flooding due to increased rainfall services through the development of city, regional and
The project aims to improve the electrification ratio in off- intensity and land use changes. special area-scale of final disposal sites.
Project Examples Financed / grid areas across the country. Power generation is sourced Locations: All provinces except East Kalimantan
Refinanced from solar, mini hydro, and micro hydro power plants*. Locations: West Java, Central Java, Yogyakarta, North
Sumatera, West Sumatera, South Sulawesi, Maluku, Bali • Improvement of Municipal Solid Waste Management
Locations spread across 19 provinces in 2017 (Refinancing) System (Financing)
and the 2019 development of such infrastructure are spread
across all provinces (Financing) Improvement of basic waste management infrastructure
services through the development of city, regional and
special area-scale of final disposal site.
Locations spread across 11 provinces
*Micro-hydro is of <100 kW and mini-hydro is of 100 kW-10 MW

Note: Information extracted from Green Sukuk Issuance Allocation and Impact Report (February 2020), and subject to change and assurance from PwC
Projects were financed in Indonesian Rupiahs and the currency exchange rate based on the State Budget Assumption for 2019 budget year of IDR 15,000 per USD was used to re-calculate the amount spent on each project
102
Tangible Results from Indonesia’s Green Sukuk Initiatives (Cont’d)
Green Projects Refinanced and Financed with Proceeds from Indonesia’s Green Sukuk Issuance
Proceeds from Indonesia’s Green Sukuk Initiative has been Successfully Deployed to a Range of Eligible Green Projects
Sustainable Transport Energy Efficiency

Locations Jakarta, Sumatera, Java Across the country
Amount Committed to
USD288.77 mil -
Finance 2019 Projects
Amount Committed to
USD77.95 mil USD202.72 mil
Refinance 2017 Projects
Target Impact / 1,543,000 tonnes of CO2e 355,394 tonnes of CO2e

Emissions Reduction (2017)
• Development of Jabodetabek Urban Train • Construction and Management of • Installation of Navigation Facilities (Refinancing)
(Refinancing) Double Track Railways
Infrastructure and Supporting Construction, rehabilitation and replacement of marine navigation aids and the installation of
Construction of double-double track of the Facilities (Refinancing and solar cells to power marine navigation aids. The shift towards solar powered marine
Jabodetabek urban railway network. Financing) navigation aids reduces the use of fossil-fuel sources of power.
Locations: Jabodetabek (Jakarta, Bogor, Locations: spread across 21 provinces in 2017
Depok, Tangerang, Bekasi) The construction of the double track
railway project in the Trans Java • Improvement of Land Transportation Traffic Management System (Refinancing)
• Construction and Management of railway’s northern section, upgrading
Project Examples Financed /
Railways Infrastructure and Supporting the single-track railway. Installation of road traffic equipment such as traffic signs, area traffic control systems (ATCS)
Refinanced in 2019
Facilities in Sumatera (Refinancing and Locations: Jabodetabek (Jakarta, Bogor, and navigation aids for river and take crossings (SBNP) with energy-saving sensors.
Financing) Depok, Tangerang, Bekasi) Locations: Jakarta, West Java, Central Java, Yogyakarta, East Java
Construction of the Trans Sumatera Railway • Construction, Rehabilitation and Maintenance of Airport Infra-structures (Refinancing)
from Aceh to Lampung province. The Trans
Sumatera Railway causes a mode shift from The installation of solar-powered street lights and solar power plants. It improves the energy
road transport to rail transport and logistics efficiency of airports and ensure electricity is sourced from renewable sources
Locations: Aceh, North Sumatera, West Locations: spread across 30 provinces in 2017
Sumatera and South Sumatera
Note: Information extracted from Green Sukuk Issuance Allocation and Impact Report (February 2020), and subject to change and assurance from PwC
Projects were financed in Indonesian Rupiahs and the currency exchange rate based on the State Budget Assumption for 2019 budget year of IDR 15,000 per USD was used to re-calculate the spent amount on each project
103
Section 7
Monetary and Financial Factor:
Credible Monetary Policy Track Record
and Favourable Financial Sector
Bank Indonesia’s Policy Mix
To Maintain Macroeconomic and Financial System Stability
 Accommodative monetary policy

consistent with controlled inflation  Implementing Macro prudential
in the target corridor, while serving Intermediation Ratio (RIM)
as a pre-emptive measure to
 Implementing Macro prudential Liquidity
maintain domestic economic growth
Buffer (MLB)
2
momentum
 Stabilize exchange rate consistent
with fundamentals 1 Macro-
 Optimize monetary operations in Monetary prudential
order to ensure market Policy Policy  Electronification: Social program, e-
mechanisms and adequate liquidity payment for Government
in the money and foreign exchange
 Financial technology
markets
3  National Payment Gateway (NPG)

 QRIS (QR Indonesia Standard)
Payment  Expanding National Clearing System
Coordination
System (SKNBI) services
with other
 Controlling inflation: TPIP, TPID Policy
Authorities
 Structural reforms: Government
 Financial deepening & stability: KSSK 5 4  Developing market instruments for financing
infrastructure
(Financial System Stability Financial Market
Committee), OJK (Financial Services Deepening  Developing financial market infrastructures
Authority)  Rupiah Interest Rate Swaps (IRS) and Overnight Index
 Coordinating efforts in reducing Swap (OIS)
Current Account Deficit  Domestic non-Deliverable Forward (DNDF)
 Developing the Commercial Papers (Surat Berharga
Komersial)
105
Bank Indonesia Policy Mix: October 2020
The BI Board of Governors agreed 12th and 13th October 2020 to hold the BI 7-Day Reverse Repo Rate at 4.00%, while also
maintaining the Deposit Facility (DF) and Lending Facility (LF) rates at 3.25% and 4.75%.
Strengthening policy
implementation to stimulate SMEs
Maintaining Strengthening the monetary by (i) corporatization, (ii) increase
Focusing on the
rupiah operations strategy in order capacity, (iii) access to finance as Close policy coordination
quantity channel by
exchange rate to reinforce the well as (iv) digitalization in line with the Government and
providing liquidity,
stabilization accommodative monetary with the National Made in Financial System Stability
including support for
Holds policy in line policy stance and Indonesia Movement. Committee will constantly
the Government in
BI7DRR terms of with the accelerating money market be strengthening order to
at 4,00% currency's and foreign exchange market Strengthening the digital economy maintain macroeconomic
accelerating state
fundamental deepening through and finance ecosystem through and financial system
budget realization in
value and infrastructure development, the use of digital payment stability, while
2020 to hasten the
market including Electronic Trading instruments and collaboration accelerating the national
economic recovery
mechanisms Platforms (ETP) as well as a between the banking industry, economic recovery.
from COVID-19
Central Counterparty (CCP) FinTech and e-commerce to
support the national economic
recovery program.

106
Strengthened Monetary Expansion and Fiscal Synergy
PRINCIPLES OF FUNDING AND BURDEN SHARING

• Bank Indonesia continues its commitment to funding the 2020
state budget through SBN purchases in the primary market in
accordance with Act No. 2 of 2020, through market mechanisms
and private placement, as part of the efforts to accelerate the
national economic recovery program, while maintaining
macroeconomic stability
• Bank Indonesia had purchased Rp60.18 trillion1 worth of SBN in
the primary market through market mechanisms pursuant to the
Joint Decree of the Minister of Finance and Governor of Bank
Indonesia issued on 16th April 2020, including auction schemes,
greenshoe options (GSO) and private placement
• Meanwhile, funding realization and burden sharing to fund public
goods in the state budget by Bank Indonesia through private
placement in accordance with the Joint Decree of the Minister of
Finance and Governor of Bank Indonesia issued on 7th July 2020
currently stand at Rp229.68 trillion1
• Bank Indonesia has also realized burden sharing with the
Government to fund non-public goods-SME totaling Rp90.88
trillion1 pursuant to the Joint Decree of the Minister of Finance and
Governor of Bank Indonesia issued on 7th July 2020.
• Through such synergy, the Government can focus on accelerating
state budget realization in order to stimulate the national
economic recovery.

1(as of 8th Oct 2020)
107
Strengthening Bank Indonesia’s Policy Mix to Mitigate COVID-19
BGM 19-20 FEB,

BGM 13-14 APRIL BGM 17-18 JUNE 2020 AND BGM 18-19 AUGUST 2020
2 MARCH, AND 18-19
AND 18-19 MAY 2020 15-16 JULY 202 BGM 16-17 SEPTEMBER 2020
MARCH 2020
1. Hold BI7DRR at 4,00%

1. lower BI7DRR by 25 bps 1. Hold the BI 7-Day Reverse 1. Lower BI7DRR to 4,00%, 25
in February to 4,75%, Repo Rate at 4.50% for bps in June and 25 bps in 2. Focusing on the quantity channel by
and other 25 bps in external stability & July providing liquidity to stimulate economic
March to 4,50% stimulate growth 2. Maintaining Rupiah recovery from COVID-19, including
supporting Government in accelerating
1 2. Lower a 50bps of daily 2. Strengthening the intensity exchange rate stabilization
2020 state budget realization
rupiah reserve of triple intervention policy policy in line with the
requirement (RR) for currency's fundamental 3. Maintaining rupiah stabilization policy in
3. Providing liquidity for the
the banks engaged in value and market line with fundamental value & market
banking industry on
export-import financing, mechanisms mechanisms
restructuring MSME loans
2 and expanding rupiah and ultra-micro with formal 3. Providing reserve 4. Strengthening MO strategy in order to
RR cut for SME loans requirement remuneration accelerate monetary policy transmission
3. Lower Foreign Exchange 4. Lower the rupiah RR ratios of 1.5% per year for banks 5. Lowering the minimum limit of DP on
Reserve Requirement by 200bps for conventional meeting daily and average green automotive loans/financing from 5-
from 8% to 4% commercial banks and by rupiah reserve requirements 10% to 0%, in compliance with prudential
3 4. Rupiah accounts 50bps for Islamic banks 4. Strengthening a synergized principles
(vostro) of foreign 5. Strengthening Monetary expansive monetary policy 6. Extending the 50bps lower on rupiah
investors as underlying operations and Islamic response with accelerated reserve requirements, as an incentive for
of DNDF financial market deepening fiscal stimuli from the banks disbursing loans to SMEs and for
5. Domestic custodian through FLisBI, PaSBI and Government: export-import activity as well as to non-
4 bank for global investors SiPA  firmly committed to funding SMEs operating in priority sectors as
6. Triple intervention: 6. Relaxing the additional the APBN 2020 through SBN stipulated in the national economic
spot, DNDF, & demand deposit obligations purchases in the primary recovery program, from 31st Dec’ 20
purchasing SBN in the on the MIR market to finance the previously until 30th Jun’21;
secondary market budgets for healthcare, 7. Accelerating development of money
5 7. Raised the MLB by 200bps
7. Daily FX swap auction for conventional social protections, sectoral market instruments to support corporate
and Repo auction of commercial banks and by government ministries and and SME financing in line with the national
SBN 50bps for Islamic banks agencies & local economic recovery program
government
8. Liquidity injection 8. Increasing the non-cash 8. Strengthening synergy with the banking
6  Burden sharing with the
through monetary payment instruments industry, FinTech, Government and
Government to accelerate relevant authorities to accelerate
operation uptake
MSME and corporate sector digitalization, amongst others, by
9. Relaxation of 9. Strengthening policy mix recoveries
Macroprudential and coordination with the supporting SME digitalization and the
5. Expediting payment system Made in Indonesia National Movement
Intermediation Ratio Government & other
digitalization to hasten the (GERNAS BBI), and promoting the use of
10. QRIS campaign to SME, authorities
digital economy and QRIS for e-commerce
traditional markets, 10. Accelerating finance implementation as
students and worship implementation of digital 9. Expanding QRIS acceptance to bolster the
part of the economic economic recovery and accelerate SME by
places economy and finance recovery efforts extending 0% Merchant Discount Rate
11. Lower SKNBI cost
BGM = Board of (MDR) for micro-businesses from 30th
Sept’20 previously until 31st Dec’20
Governors Meeting
Stable Monetary Environment Despite Challenges
Well Maintained Inflation Ensured Price Stability Strengthened Monetary Policy Framework
(%)
20 8,38 8,36 9 8,00 19 August 2016
The New Monetary
18 8 Operation Framework
CPI (%, yoy) rhs
16 7,00
Core (%, yoy) - lhs 7 LF Rate: 7.00
14 Volatile Food (%, yoy) - lhs2
6 BI Rate: 6.50
Administered (%, yoy) - lhs 6,00
12
5
10
3,35 3,61 4 LF Rate: 4.75
3,13 5,00
8 3,02
2,72
3
6 BI 7Day RR Rate: 4.00
1,42 2 4,00
4
2 1 DF Rate: 3.25
3,00
0 0
2013 2014 2015 2016 2017 2018 2019 Sep-2020
Rupiah Exchange Rate Fared Relatively Well Compared to Peers Credit Growth Profile
YTD 2020 vs 2019 % yoy
18,0
BRL -27,15 -22,13 Total Growth Working Capital Loans
16,0 Investment Loans Consumption Loans
TRY -24,63 -16,11
ZAR -15,21 14,0
-13,39
IDR -5,56 12,0
-3,11
THB -4,51 10,0
-1,39
INR -2,59
-4,92 8,0 4,6
MYR -1,38 6,0
-1,98
SGD -0,83 4,0 1,1
point-to-point -1,74
KRW 0,81 1,0
-2,68 2,0
CNY average 2,54
-0,96 0,0
JPY 3,11
1,44 -2,0
PHP data as of October 12th, 2020 4,56 -1,0
3,58 -4,0
EUR 5,08 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7
0,67
-30,0 -25,0 -20,0 -15,0 -10,0 -5,0 0,0 5,0 10,0 2015 2016 2017 2018 2019 2020
109
Regional Inflation Remains Under Control
…supported by low inflation in all regions
Low and Controlled Inflation in All Regions, SEPTEMBER 2020 (%, YOY)
Source: Central Bureau of Statistics of Indonesia (BPS), calculated

110
4 Strategies to Achieve the Inflation Target
2018-2019 Target 2020-2021 Target
Achieving inflation at 3,5%±1% Achieving inflation at 3,0%±1%

• Maintaining core inflation • Maintaining core inflation
• Maintaining volatile food stability at 4-5% • Maintaining volatile food inflation less than 4%
• Controlling administered price inflation • Controlling administered price inflation
4 Strategies
1. Price Affordability 2. Supply Availability 3. Well Managed Distribution 4. Effective Communication
Strengthening
production,
Encouraging
Government Strengthening
Stabilizing the Managing Strengthening trade Improving trade Improving data
food reserves central-regional
price demand side institution cooperation infrastructure quality
and food export- coordination
between regions
import
management

111
Bank Indonesia Policy Mix: May 2020
Mitigating the risk of COVID-19 transmission
Mechanism for Bank Indonesia to purchase SBN in the primary market to finance
the State Revenue and Expenditure Budget (APBN) – Above the Line
 In accordance with the joint decree issued by the Minister of Finance and Bank Indonesia Governor, SUN/SBSN purchases by Bank
Indonesia in the primary market are based on general practices through transparent market mechanisms to maintain good governance.
The mechanism for Bank Indonesia to purchase SUN/SBSN in the primary market is divided into three stages as follows:
(i) Phase I: As a non-competitive bidder, Bank Indonesia can purchase SUN/SBSN in the primary market based on the following
provisions:
 Yield commensurate with the weighted average yield of the auction on the same day
 Maximum SUN bid of up to 25% of the target auction maximum and maximum bid on SBSN > 1 year of up to 30% of the target
auction maximum.
(ii) Phase II: A greenshoe option based on the following provisions:
 Yield commensurate with the weighted average yield of the auction on the previous day.
 If the incoming bid is lower than the auction target, the maximum offer is the same as the previous offer.
(iii) Phase III: Private placements based on the following provisions:
 Refer to the latest market price published by the Indonesia Bond Pricing Agency (IBPA).
 Private placements are implemented if the Government seeks additional financing based on the agreed terms and conditions.
 Bank Indonesia provide interest remuneration on the government account as a form of burden sharing to reduce the state budget
burden.
 SBN purchases by Bank Indonesia in the primary market as a follow-up action to Act No. 2 of 2020 currently stand at IDR23.98 trillion,
with IDR166.21 trillion purchased in the secondary market for stabilisation purposes. Consequently, BI holdings of SBN were recorded
at IDR443.48 trillion on 26th May 2020.
112
Bank Indonesia Policy Mix: May 2020
National Economic Recovery and state budget financing mechanism – Below the Line
 Bank Indonesia is providing liquidity to the banking industry through a repo mechanism for SBN in order to fund loan restructuring as part of the national
economic recovery. If SBN purchases are insufficient, banks can apply to the government for fund placements, funded through SBN purchases by Bank
Indonesia (below the line).
 In accordance with Government Regulation No. 23 of 2020, government fund placements will only occur at participating banks if SBN available for repo to
Bank Indonesia are insufficient, provided the participating bank is healthy based on a soundness assessment conducted by OJK and is holding tradeable
government securities (SBN), Bank Indonesia certificates of deposit (CD), Bank Indonesia Certificates (SBI), Bank Indonesia Sukuk (SukBI) and Islamic Bank
Indonesia certificates (SBIS) that have not been repo totaling more than 6% of third party funds.
 Liquidity from Bank Indonesia to the banking industry for loan restructuring is provided through the following mechanisms:
(i) Phase I: SBN Repo
Total SBN held by the banking industry as of 14th May 2020 was recorded at IDR886.0 trillion. After meeting the Macroprudential Liquidity Buffer
(MPLB) requirements for the banking industry, approximately IDR563.6 trillion must be repo to Bank Indonesia prior to applying for government
fund placements. The current position of repo SBN to Bank Indonesia stands at IDR43.9 trillion.
(ii) Phase II: Government fund placements in accordance with Government Regulation No. 23 of 2020
(iii) Phase III: Repo SBN - Macroprudential Liquidity Buffer (MPLB)
 Pursuant to Bank Indonesia regulations (Macroprudential Liquidity Buffer - MPLB), banks are required to maintain minimum SBN totaling 6% of
deposits (IDR330 trillion) for liquidity management in addition to the 3.5% reserve requirements
 All SBN, totaling IDR300 trillion, can be repo through monetary operations in accordance with the Bank Indonesia Act before applying for short-
term liquidity loan/financing facilities (PLJP/S).Bank Indonesia provide interest remuneration on the government account as a form of burden
sharing to reduce the state budget burden.
(iv) Phase IV: Short-term liquidity loan/financing facilities (PLJP/S)in accordance with Act No. 2 of 2020
Banks can apply for the short-term liquidity loan/financing facilities (PLJP/S)if the SBN already repoed are nearly depleted. Pursuant to Act No. 2 of
2020, short-term liquidity loan/financing facilities (PLJP/S) are only available to solvent and healthy banks based on OJK requirements and
assessments, with adequate repayment capacity and guaranteed by current loans registered at Bank Indonesia.
113
Bank Indonesia Policy Mix: April 2020
The BI Board of Governors agreed on 13th and 14th April 2020 to hold the BI 7-Day Reverse Repo Rate at 4.50%,
while also maintaining the Deposit Facility (DF) and Lending Facility (LF) rates at 3.75% and 5.25%.
Rupiah Reserve Requirement Lowered by 200 bps
1) To stabilize and strengthen rupiah exchange rates, Bank Indonesia has strengthened the intensity of triple intervention policy through the spot and
Domestic Non-Deliverable Forward (DNDF) markets, as well as purchasing SBN in the secondary market.
2) To support national economic recovery efforts from the deleterious COVID-19 impact, Bank Indonesia will increase monetary easing through
quantitative easing as follows:
a. Expand monetary operations by providing banks and the corporates a term-repo mechanism with SUN/SBSN underlying transactions of tenors up to
one year.
b. Lower the rupiah reserve requirement ratios by 200bps for conventional commercial banks and by 50bps for Islamic banks/Islamic business units,
effective from 1st May 2020.
c. Relax the additional demand deposit obligations to meet the Macroprudential Intermediation Ratio (MIR) for conventional commercial banks as well
as Islamic banks/Islamic business units for a period of one year, effective from 1st May 2020.
3) To strengthen liquidity management in the banking industry and in relation to the lower rupiah requirements, Bank Indonesia has raised the
Macroprudential Liquidity Buffer (MLB) by 200bps for conventional commercial banks and by 50bps for Islamic banks/Islamic business units, effective
from 1st May 2020. The banking industry is required to meet the additional MLB through purchases of government issued SUN/SBSN in the primary
market.
4) To increase the uptake of non-cash payment instruments in order to mitigate the COVID-19 impact, Bank Indonesia is increasing various payment
system policy instruments as follows:
a. Supporting government programs to accelerate non-cash social aid program (bansos) disbursements to members of the public in conjunction with
payment system service providers by expediting the electronification of relevant social programs, including the Family Hope Program (PKH), Noncash
Food Assistance Program (BPNT), Pre-Employment Card and Smart Indonesian Card (KIP).
b. Increasing public socialization activities in collaboration with payment system service providers to increase the uptake of non-cash payment
instruments through digital banking, electronic money and broader QRIS acceptance.
c. Relaxing credit card policy by lowering the upper limit for credit card interest, minimum payment requirements and the penalties for late payments,
while supporting credit card issuer policy to extend the due date for customers.
114
As a follow-up measure to strengthen monetary and financial market stability in conjunction with the Coordinating Ministry of
Economic Affairs, Ministry of Finance, Indonesian Financial Services Authority (OJK) and Deposit Insurance Corporation (LPS), the
Governor of Bank Indonesia, Perry Warjiyo, on April 1st 2020 delivered The policy mix implemented by Bank Indonesia to mitigate
the COVID-19 impact is as follows:
1) Lower the BI 7-Day (Reverse) Repo Rate in February and March by 25bps respectively;
2) Intensify triple intervention policy in the spot and DNDF markets and purchasing SBN in the secondary market;
3) Reduce the foreign currency reserve requirements for conventional commercial banks from 8% to 4%;
4) Extend the SBN repo tenor and provide daily auctions to loosen rupiah liquidity as well as increase the frequency of FX Swap auctions to
daily in order to ensure adequate liquidity;
5) Expand the types of underlying transactions for Domestic Non-Deliverable Forwards (DNDF), thus increasing hedging alternatives against
rupiah holdings in Indonesia;
6) Lower the rupiah reserve requirements by 50bps for banks that are engaged in export-import financing, as well as the financing of MSMEs
and other priority sectors;
7) Loosen the Macroprudential Intermediation Ratio (MIR);
8) Provide hygienic currency fit for circulation, reduce the costs of the National Clearing System (SKNBI), maintain a QRIS Merchant Deposit
Rate (MDR) of 0% for micro-merchants, and support non-cash disbursements of various government programs, including the Family Hope
Program (PKH) and Noncash Food Assistance Program (BPNT), as well as the Pre-Employment Card and College Smart Indonesia Card.
Bank Indonesia reiterated that rupiah exchange rates are currently adequate and the outlook scenario formulated for the main macroeconomic
indicators is a form of forward-looking anticipatory measure towards prevention through joint efforts, while Bank Indonesia continues to
maintain rupiah stability.
115
As a follow-up measure to strengthen monetary and financial market stability in conjunction with the Coordinating Ministry of
Economic Affairs, Ministry of Finance, Indonesian Financial Services Authority (OJK) and Deposit Insurance Corporation (LPS), the
Governor of Bank Indonesia, Perry Warjiyo, on April 1st 2020 delivered The policy mix implemented by Bank Indonesia to mitigate
the COVID-19 impact is as follows:
• Bank Indonesia also backs promulgation of the Government Regulation in Lieu of Law in order to relax prevailing laws to mitigate the COVID-19
impact as an anticipatory measure in conjunction with the Government, OJK and LPS. COVID-19 handling requires extraordinary measures,
unconventional policies and policies that exceed previous jurisdiction.
• To that end, Bank Indonesia has reiterated its authority in accordance with Government Regulation in Lieu of Law (Perppu) No. 1 of 2020 as
follows:
1) Expansion of BI authority to purchase long-term government securities (SBN) and government Islamic securities (SBSN) in the primary market in
order to assist the Government finance the handling of the COVID-19 impact on financial system stability.
2) SBN will be purchased in the primary market by Bank Indonesia as a last resort if the market is unable to fully absorb the SBN issued by the
Government. Further provisions will be regulated in conjunction with the Minister of Finance and the Governor of Bank Indonesia based on the
following considerations: financial market conditions and the impact on inflation.
3) As an anticipatory measure, Bank Indonesia will purchase repo securities held by the Deposit Insurance Corporation (LPS) in order to finance the
handling of solvency issues at systemic and non-systemic banks;
4) Provision of short-term liquidity loan or short-term liquidity financing facilities in compliance with sharia principles to systemic and non-systemic
banks;
5) Foreign exchange flow management for residents. The use of foreign exchange by residents, including provisions for the surrender, repatriation
and conversion of foreign exchange to maintain macroeconomic and financial system stability as follows:
6) Bank Indonesia would like to stress that this measure is not a form of foreign exchange control but policy to manage foreign exchange applicable
only to residents (excluding non-residents/foreign investors). Foreign portfolio investment and foreign direct investment (FDI) are still required for
the Indonesian economy, thus existing policy permitting the free flow of foreign exchange by foreign investors remains effective.
7) Regulating foreign exchange amongst residents is consistent with international prudential principles for macroeconomic management, particularly
under economic distress, such as the current COVID-19 pandemic. 116
Bank Indonesia has agreed a repurchase agreement line (repo line) with the US Federal reserve worth USD60 billion
• The agreement may be used by Bank Indonesia to fulfil US dollar liquidity if required. The repo line facility for Foreign and International
Monetary Authorities (FIMA) has only been extended to a few central banks, thus indicating confidence in Indonesia's economic outlook and
the macroeconomic policies implemented. In addition, Bank Indonesia has also established repo line facilities with several other institutions,
namely the Bank for International Settlements (BIS), worth USD2.5 billion, the Monetary Authority of Singapore (MAS), USD3 billion, as well
as other central banks in the region valued at USD500 million-USD1 billion.
• The agreements will strengthen Bank Indonesia’s second line of defence, encompassing Bilateral Currency Swap Arrangements (BCSA) with
several other central banks, namely the People’s Bank of China (PBoC), worth CNY200 billion (equivalent to USD30 billion), the Bank of
Japan (BOJ), USD22.76 billion, Bank of Korea, KRW10.7 trillion (equivalent to IDR115 trillion), and the Monetary Authority of Singapore
(MAS), USD10 billion.
117
Bank Indonesia Issued Implementing Provisions for Auction of Government Debt Securities (SUN) and/or
Government Islamic Securities (SBSN) in the Primary Market
• Bank Indonesia issued Board Member of Governors Regulation No. 22/5/PADG/2020 on Auction of Government Debt Securities and/or
Government Islamic Securities in the Primary Market to Maintain State Financial Management Sustainability as Implementation of
Government Regulation in Lieu of Law Number 1 of 2020 on State Financial Policy and Stability of Financial Systems for the Management
of Corona Virus Disease 2019 (Covid-19) and/or Encounter the Threat to National Economy and/or Stability of Financial Systems. The
regulation starts to take effect on 20 April 2020.
• The regulation serves as a follow-up to Government Regulation in Lieu of Law Number 1 of 2020, granting authority to Bank Indonesia
among others to purchase Government Debt Securities (SUN) and/or Government Islamic Securities (SBSN) in the primary market . It is
necessary as a funding source for the government to recover the national economy including maintaining state financial management
sustainability including SUN and/or SBSN issued in response to COVID-19 pandemic. Purchase of SUN and/or SBSN in the primary market
is based on principle that Bank Indonesia is a last resort if the market capacity is unable to purchase them and/or result in high yield
increase. Further, this regulation specifies the following:
1) Bank Indonesia holds auction of SUN and/or SBSN and auction of additional SUN and/or SBSN for long-term SUN and/or SBSN in the
primary market as a follow-up to the implementation of Government Regulation in Lieu of Law Number 1 of 2020.
2) Provisions for offer quote and participants of auction of SUN and/or SBSN and auction of additional SUN and/or SBSN refer to the
applicable Finance Minister Regulation on auction of SUN and/or SBSN in the domestic primary market.
3) Bank Indonesia may quote an offer to purchase long-term SUN and/or SBSN in auction of SUN and/or SBSN and auction of additional
SUN and/or SBSN in the following manners: a. directly without using the main dealer and/or SBSN main dealer; b. non-competitive bid.
4) Implementation of auction of SUN and/or SBSN and auction of additional SUN and/or SBSN refer to the applicable Bank Indonesia
provisions for auction of Government securities in the primary market provided that they are not in contravention of this regulation.
118
Bank Indonesia Policy Mix: March 2020
To strengthen coordination and the various policy measures already taken, Bank Indonesia on March
2nd 2020 introduced a variety of five follow-up policy measures to maintain monetary and financial
market stability as well as mitigate the COVID-19 risks
1) Intensify triple intervention policy to ensure rupiah exchange rates move in line with the currency's fundamental
value and market mechanisms. To that end, Bank Indonesia will optimize its intervention strategy in the DNDF
market, spot market and SBN market in order to minimize the risk of increasing rupiah exchange rate volatility.
2) Lower the FX reserve requirements for commercial banks from 8% to 4%, effective 16th March 2020, which will
increase FX liquidity in the banking industry by around USD3.2 billion and simultaneously alleviate foreign exchange
market pressures.
3) Lower the rupiah reserve requirements by 50bps for banks financing export-import activity in coordination with the
Government. Effective from 1st April 2020 for a period of nine months before a further review, this policy is
expected to facilitate export-import activity through lower costs/fees.
4) Expand the range of underlying transactions available to foreign investors in order to provide alternative hedging
instruments against rupiah holdings.
5) Reaffirm that global investors can utilize global and domestic custodian banks to conduct investment activity in
Indonesia.
119
Bank Indonesia Policy Mix: March 2020
Bank Indonesia on the Board of Governors Meeting 18th and 19th March 2020 has reinforced its policy mix towards mitigating
the risk of COVID-19 transmission, while maintaining money market and financial system stability and catalyzing economic growth
momentum through the following policy measures:
1) Strengthening the intensity of triple intervention policy to maintain rupiah exchange rate stability in line with the currency's fundamental value and
market mechanisms, including the spot and DNDF markets as well as purchasing SBN in the secondary market.
2) Extending the SBN repo tenor to 12 months and providing daily auctions to loosen rupiah liquidity in the banking industry, effective from 20th March
2020.
3) Increasing the frequency of FX swap auctions for 1, 3, 6 and 12-month tenors from three times per week to daily auctions in order to ensure adequate
liquidity, effective from 19th March 2020.
4) Strengthening foreign currency term deposit instruments in order to enhance foreign currency liquidity management in the domestic market, while
encouraging the banks to utilize the foreign currency reserve requirements lowered by Bank Indonesia for domestic purposes.
5) Expediting the enforcement of domestic vostro rupiah accounts for foreign investors as underlying transactions for Domestic Non-Deliverable Forwards
(DNDF), thus increasing hedging alternatives against rupiah holdings in Indonesia, which has been brought forward from 1st April 2020 to no later than
23rd March 2020.
6) Expanding the incentive of a 50bps daily rupiah reserve requirement beyond banks that are engaged in export-import financing to include the financing
of MSMEs and other priority sectors, effective from 1st April 2020.
7) Strengthening payment system policy to support COVID-19 mitigation efforts by:
• providing hygienic currency fit for circulation, alternative cash and backup services, and urging the public to prioritize non-cash payment transactions;
• encouraging the use of non-cash payment channels by reducing the cost of the National Clearing System (SKNBI) from the banking industry to Bank
Indonesia from IDR600 to IDR1 and from customers to the banking industry from a maximum of IDR3,500 to IDR2,900, effective from 1st April 2020
until 31st December 2020; and
• supporting non-cash disbursements for government programs, such as the Family Hope Program (PKH) and Noncash Food Assistance Program
(BPNT), Pre-Employment Card and College Smart Indonesia Card.
120
Principles of Average Reserve Requirement Ratios Improvement
Considerations for the Average Reserve Requirement Ratios Effective

Substance Old New
Improvement Date
a. Additional rupiah
• Improvement in average reserve requirement is a follow up average reserve Fixed RR: 5% Fixed RR: 4.5% 16th July
to the monetary policy operational framework reform requirement for Average RR: 1.5% Average RR: 2% 2018
implemented by Bank Indonesia since 2016. conventional RR: 6.5% RR: 6.5%
• Monetary policy operational framework reform started in commercial banks
August 2016 as BI7DRR replaced BI Rate as policy rate. This
b. Annulment of 16th July
was then strengthened in 1st July 2017, by the
demand deposit 2.5% (from 1.5% RR) 0% 2018
implementation of the average reserve requirement in
renumeration
rupiah for conventional commercial banks at 1.5% out of the
total 6.5% of GDP reserve requirement in Rupiah. The c. Implementation of
reformulation is also backed by various efforts in financial foreign exchange
market deepening. Fixed RR: 8% Fixed RR: 6%
average reserve 1st October
Average RR: 0% Average RR: 2%
• The current improvement aims to elevate flexibility in requirement for 2018
RR: 8% RR: 8%*
banking liquidity management, enhance banking conventional
intermediation function, and support efforts in financial commercial banks
market deepening. This multiple targets will in turn improve
the effectiveness of monetary policy transmission in d. Implementation of
Fixed RR: 5% Fixed RR: 3% 1st October
maintaining economic stability. average reserve
Average RR: 0% Average RR: 2% 2018
requirement for
RR: 5% RR: 5%*
Islamic banks
* Complemented by harmonisation feature to align with the average reserve requirement in rupiah
feature for conventional commercial banks (e.g. Calculation period, lag period, and Maintenance
period of 2 weeks)

121
Relaxing Reserve Requirement Ratios
Lower reserve requirements, effective 1st May 2020
Regulation
1 200bps for conventional commercial banks INELIGIBLE for looser daily reserve requirements as per macroprudential policy to support
export-import and MSME financing, effective from 1st April 2020, to 3.5%, with a daily ratio of 0.5% and average ratio of 3%
2 50bps for Islamic banks and Islamic business units INELIGIBLE for looser daily reserve requirements as per macroprudential policy to
support export-import and MSME financing, effective from 1st April 2020, to 3.5%, with a daily ratio of 0.5% and average ratio of 3%
3 200bps for conventional commercial banks eligible for looser daily reserve requirements as per macroprudential policy to support export-
import and MSME financing, effective from 1st April 2020, to 3.0%, with a daily ratio of 0% and average ratio of 3%
4 50bps for Islamic banks and Islamic business units eligible for looser daily reserve requirements as per macroprudential policy to support
export-import and MSME financing, effective from 1st April 2020, to 3.0%, with a daily ratio of 0% and average ratio of 3%

122
Principles of Macroprudential Intermediation Ratio (MIR) and
Macroprudential Liquidity Buffer (MLB)
Considerations for Macroprudential Instruments

Macroprudential Intermediation Ratio (MIR) and
Macroprudential Liquidity Buffer (MLB)
1 2 3 4
Striving to stimulate the bank The regulation is effective The policy is expected to This
intermediation function and liquidity for conventional stimulate the bank macroprudential
management, Bank Indonesia commercial banks from intermediation function to the policy instrument is
issued Bank Indonesia Regulation 16th July 2018 and for real sector congruent with countercyclical and
(PBI) No. 20/4/PBI/2018 and Board sharia banks from 1st sectoral capacity and the can be adjusted in
of Governors Regulation (PADG) No. October 2018. economic growth target in line with prevailing
20/11/PADG/2018 concerning the compliance with prudential economic and
Macroprudential Intermediation principles, while also overcoming financial dynamics.
Ratio (MIR) and Macroprudential the issue of liquidity
Liquidity Buffer (MLB) for procyclicality.
Conventional Commercial Banks,
Sharia Banks and Sharia Business
Units.

123
Principles of Macroprudential Intermediation Ratio (MIR)*
MIR Sharia (Sharia Banks and Sharia Business

Regulation MIR (Conventional Commercial Bank)
Units)
1 MIR Accounting Formula Credit + Owned Bond Financing + Owned Sharia Bond
Deposit + Issued Bond Deposit + Issued Sharia Bond
2 Rate and Parameters  Ceiling 94%  Ceiling 94%
 Floor 84%  Floor 84%
 Minimum Capital Adequacy Requirement 14%  Minimum Capital Adequacy Requirement 14%
 Upper disincentive parameter 0.2  For Sharia business units, the Minimum Capital
Adequacy Requirement is the same as that of the parent
 Lower disincentive parameter 0.1
conventional commercial bank
 Upper disincentive parameter 0.2
 Lower disincentive parameter 0.1
3 Scope of credit/financing and  Credit: rupiah and foreign currency  Financing: rupiah and foreign currency
deposits to calculate MIR / MIR
 Deposits in rupiah and a foreign currency: (i)  Deposits in rupiah and a foreign currency: (i) wadiah
Sharia
demand deposits, (ii) savings deposits; and (iii) savings; and (ii) unrestricted investment funds, excluding
term deposits, excluding interbank funds interbank funds
4 Source of Data Monthly Commercial Bank Reports Monthly Sharia Bank Reports
5 Criteria for securities held  Corporate bonds and/or corporate sukuk Corporate bonds and/or corporate sukuk
 Issued by a nonbank corporation and by a resident
 Offered to the public through a public offering
 Equivalent to investment grade rating affirmed by a rating agency
 Administrated by an authorised securities institution
*As part of further relaxation on macroprudential policy, an adjustment will be applied starting from December 2nd, 2019 124
Principles of Macroprudential Intermediation Ratio (MIR)*
Regulation MIR (Conventional Commercial Bank) MIR Sharia (Sharia Banks and Sharia Business
Units)
6 Percentage of the securities
100%
held
7 Criteria for securities issued  medium-term notes (MTN), floating rate notes (FRN)  sharia-compliant medium-term notes (MTN) and/or
and/or bonds other than subordinated bonds sukuk other than subordinated sukuk
 Issued by a nonbank corporation and by a resident
 Offered to the public through a public offering
 Equivalent to investment grade rating affirmed by a rating agency
 Administrated by an authorised securities institution
8 Securities Reporting Offline delivery mechanism (email)
9 Scope of deposits to meet  Average daily total deposits in rupiah at all branch  Average daily total deposits in rupiah at all branch
DD MIR /DD MIR Sharia offices in Indonesia offices and sharia business units in Indonesia
 Including rupiah liabilities to a resident and non-  Including rupiah liabilities to a resident and non-
resident third-party nonbank, consisting of: (i) resident third-party nonbank, consisting of: (i) wadiah
demand deposits, (ii) savings deposits; (iii) term savings; (ii) unrestricted investment funds, and (iii)
deposits, and (iv) other liabilities other liabilities
10 Relaxation of DD  Bank Indonesia may relax the provisions of the DD MIR/Sharia DD MIR based on credit/financing disbursement
MIR/Sharia DD MIR and fund accumulation
 The provisions may be relaxed based on a request from a conventional commercial bank, Sharia bank or Sharia
business unit or a recommendation from the Financial Services Authority (OJK)
 Conventional commercial banks, Sharia banks or Sharia business units that receive the relaxed policy are exempt
from sanctions
*As part of further relaxation on macroprudential policy, an adjustment will be applied starting from December 2nd, 2019 125
Adjustment of Macroprudential Intermediation Ratio (MIR)/Sharia
Macroprudential Intermediation Ratio (Sharia MIR)*
Bank Indonesia strengthens accommodative macroprudential policy through an adjustment to the Macroprudential Intermediation Ratio by
including the loan/financing received by banks as a component of funding in MIR/sharia MIR.
Policy Backgrounds Main Regulatory Points

• Including loan received by conventional commercial banks and financing received by Islamic banks and Islamic
• In response to global and domestic economic
business units as a source of bank funding in the calculation of MIR/sharia MIR.
developments, BI is maintaining an
accommodative policy mix to maintain the • The criteria for loans/financing received by banks that are eligible to be included in MIR/sharia MIR calculation
economic growth while also maintaining are as follows:
macroeconomic and financial system stability. a. Loans/financing received in Rupiah and foreign currency;
• BI relaxed MIR/sharia MIR policy in March b. Loans/financing received in the form of bilateral loans and/or syndicated loans for conventional commercial
2019, which stimulated bank lending. banks, Islamic banks and Islamic business units;
Nevertheless, the macroprudential c. Loans/financing excludes interbank loans/financing.
intermediation ratio (MIR) is again d. Loans/financing received with a maturity of no less than 1 year; and
approaching the upper bound, thus e. Loans/financing received based on a loan agreement.
necessitating efforts to increase bank lending • Based on points a and b, the adjusted MIR/sharia MIR formula is as follows:
capacity.
Credit + Owned Bond
• Considering the potential of bank funding
Deposit + Issued Bond + Loan/Financing Received
sources that are not included in the MIR ratio,
for example the expanding share of Lower disincentive parameter Upper disincentive parameter
loans/financing received by banks, BI decides
MIR/sharia MIR RR= MIR/sharia MIR RR=
to adjust MIR/sharia MIR policy in order to
Lower Disincentives Parameter x (Lower Bound of MIR/Sharia MIR 0.2 x (Bank’s MIR/sharia MIR - Upper Bound of
optimize loans/financing received for bank
Target – Bank’s MIR/Sharia MIR) x Deposit MIR/Sharia MIR Target – ) x Deposit
lending.
• This policy to stimulate credit growth will
*This disincentive applies for banks with CAR below 14%.
comply with prudential principles. Therefore,
BI is only encouraging banks with low non-
performing loans and adequate capital
resilience to expand credit/financing.
• The reference rate used to calculate penalties for banks that do not meet MIR/sharia MIR policy will be adjusted
from the Jakarta Interbank Offered Rate (JIBOR) to the Indonesia Overnight Index Average (IndONIA).
*This adjustment will be effective from December 2nd, 2019

Principles of Macroprudential Liquidity Buffer (MLB)
Regulation MLB (Conventional Commercial Bank) MLB Sharia (Sharia Banks)

1 Rate 4% of rupiah deposits (including Sharia Business Units 4% of rupiah deposits
deposits)
2 Components  Securities denominated in rupiah held by a conventional  Sharia-complaint securities denominated in rupiah
commercial bank that may be used for monetary held by an Sharia bank that may be used for sharia-
operations (including SBI/SDBI/SBN); and compliant monetary operations (including SBIS/SBSN)
 Sharia-complaint securities denominated in rupiah held by
an Sharia business unit that may be used for sharia-
compliant monetary operations (including SBIS/SBSN)
3 Calculation Formula Percentage of rupiah securities held by a conventional Percentage of sharia-compliant rupiah securities held by
commercial bank to rupiah deposits an Sharia bank to rupiah deposits
4 Flexibility Under certain conditions, the securities used to meet the MLB Under certain conditions, the securities used to meet the
may be used for repo transactions to Bank Indonesia for open sharia MLB may be used for repo transactions to Bank
market operations, totalling no more than 2% of rupiah Indonesia for open market operations, totalling no more
deposits than 2% of rupiah deposits
5 Sources of Data on  Monthly Commercial Bank Reports  Monthly Sharia Bank Reports
Deposits
 Rupiah deposits to calculate MLB are the average daily  Rupiah deposits to calculate sharia MLB are the
total deposits at all branches in Indonesia average daily total deposits at all branches in
Indonesia
 Rupiah deposits include: (i) demand deposits, (ii) savings
deposits; (iii) term deposits, and (iv) other liabilities  Rupiah deposits include: (i) wadiah savings; (ii)
unrestricted investment funds, and (iii) other liabilities
127
Macroprudential Liquidity Buffer (MLB) Policy and Credit card policy
Policy to increase the Macroprudential Liquidity Buffer (MPLB), effective 1st May 2020.
Regulation Before After
1 Increase in the Macroprudential Liquidity Buffer (MLB) 4% of rupiah deposits 6% of rupiah deposits
for conventional commercial banks
2 Increase in the Macroprudential Liquidity Buffer (MLB) 4% of rupiah deposits 4.5% of rupiah deposits
for Islamic banks and Islamic business units
Credit card policy, effective 1st May 2020.

Regulation Before After Effective Period
1 Lower upper limit on credit card interest 2.25% per month 2% per month 1st May 2020
2 Temporary reduction of minimum payment 10% 5% 1st May 2020 – 31st

requirements December 2020
3 Temporary reduction of late payment 3% or maximum of IDR150,000 1% or maximum of IDR100,000 1st May 2020 – 31st
penalties December 2020
4 Supporting credit card issuer policy to extend Issuer discretion 1st May 2020 – 31st
the due date for customers December 2020
128
Relaxing the Loan-to-Value (LTV) and Financing-to-Value (FTV) Ratios*
The LTV/FTV relaxation is conducted while taking into account aspects of prudential and consumer protection*
1. Increasing opportunities of first time buyers to fulfill their housing needs 2. Relaxing the amount of loan/financing facility through indent
through housing loan, specifically by adjusting the LTV ratio for property mechanism to a maximum of 5 facilities without taking account of
loan and the FTV ratio for property financing for the 1st facility, 2nd the orders
facility, etc., making the largest LTV ratio for property credit and FTV 3. Adjusting the arrangement of stages and amount of property
ratio for property financing as shown in the table below. loan/financing disbursement of indent property:
“-“= The LTV rate depends on each bank’s risk management
*As part of further relaxation on macroprudential policy, an adjustment will be applied starting from December 2nd, 2019
Relaxing the Loan-to-Value (LTV) and Financing-to-Value (FTV) Ratios*
Prudential aspects of Relaxing the Loan-to-Value (LTV) and Financing-to-Value (FTV) Ratios
1. The requirements of the LTV ratio for property credit and FTV ratio for property financing are as follows:
i. The net ratio of NPL to total credit or NPF to total financing must not exceed 5%; and
ii. The gross ratio of property NPL to total property credit or property NPF to total financing must not exceed 5%.
2. Banks must make sure that there is no loan transfer to another borrower at the same bank or different bank for tenors of less
than 1 year. The requirements are valid for banks that will disburse pre-order property loan/financing.
3. Banks are required to comply with prudential principles when disbursing loans.
4. Gradual loan liquidation is only allowed for developers that comply with bank’s risk management policy (e.g. the business
feasibility of the developer).
5. Banks are required to ensure that transactions to disburse loans (including down payment) and gradual liquidation must be
processed through the debtor and developer/seller’s bank account.
LTV / FTV Exemptions
Central government or local government loan / financing programs are exempt from this regulation.

130
Adjustment of LTV Ratio for Property Loans, FTV Ratio for Property
Financing, and Down Payments on Automotive Loans/Financing*
Bank Indonesia adjusts macroprudential policy in the property and automotive sectors by: (i) relaxing the LTV ratio for property loans and the FTV
ratio for property financing; (ii) providing additional incentive on LTV ratio for green property loans and FTV ratio for green property financing; (iii)
relaxing down payments on automotive loans/financing; (iv) providing additional incentive on down payments on green automotive loans.
Policy Backgrounds Main Regulatory Points
• In response to global and domestic economic

1. Adjustment of LTV Ratio for Property Loans and FTV Ratio for Property Financing.
developments, BI is maintaining an accommodative policy a. BI decides to relax the LTV ratio for property loans and FTV ratio for property
mix to maintain the economic growth while also financing by 5% from current ratio as follows:
maintaining macroeconomic and financial system stability.
This effort will be targeted to several potential sectors.
• Considering the ongoing needs to stimulate the property
and automotive sectors which have a huge backward and
forward linkages to other sectors in the economy, BI
decides to relax LTV/FTV policy for property
loans/financing and down payments on automotive loans
in compliance with prudential principles.
• Additional incentives are also given to support sustainable
development through green financing in order to reduce
potential disruptions to financial system stability stemming
from environmental degradation.
• As a prudential mitigation, those relaxations will be given to
borrower with strong repayment capacity and low
credit/financing risk.
• BI will regularly evaluate this policy at least once a year.

Main Regulatory Points

2. Additional incentive on the LTV ratio for green property loans and
FTV ratio for green property financing.
a. The Green Property criteria refers to the standards/certificates
issued by a nationally or internationally recognized
environmental institution.
b. Green property that is granted for the incentive has to meet the
following standards:
i. For residential areas/buildings in certified green belt
areas, each unit in the residential area/building is 3. Adjustment of Down Payments on Automotive Loans/Financing
considered to meet the criteria.
a. Down Payments on Automotive Loans/Financing is adjusted as
ii. In case that the residential area/building is not a certified follows:
green belt area, an evaluation will be conducted on each
unit as follows: i. Relaxation on the down payments of automotive loans or
 For buildings < 2500m2, the bank may conduct a self- automotive financing 5%-10% from current regulations;
assessment using the tools/applications provided by a ii. The relaxation should consider the gross NPL/NPF ratios
recognized institution. and gross NPL/NPF ratios on automotive loans/financing;
 For buildings > 2500m2, the assessment must be iii. The adjustment of down payments of automotive
conducted by a recognized institution; loans/financing in points a and b is as follows:
 For new buildings constructed in an area by one
developer or group of developers, the assessment must
be conducted by a recognized institution and the
certificate must be submitted by the developer
i. Additional incentive for green property on LTV ratio for
property loans and FTV ratio for property financing is 5%
from the LTV/FTV ratio presented in Table 2 as follows:


4. Adjustment of Down Payments on Green Automotive Loans/Financing
a. The green vehicles criteria refers to the Presidential Regulation No. 55 of 2019 concerning Battery Electric Vehicles.
b. The down payments on green automotive loans or green automotive financing is adjusted as follows:
i. Additional incentive of 5% on green vehicles from the down payment presented in Table 5;
ii. The down payment incentives considers the gross NPL/NPF ratios and gross NPL/NPF ratios on automotive loans/financing;
iii. The down payment regulation for green automotive loans or green automotive financing in points a and b is as follows:
Note: Adjustments of the LTV ratio for property loans, FTV ratio for property financing and down payments on automotive loans or financing will be effective from
December 2nd, 2019

Adjustment of Minimum Down Payments on Green Automotive Loans/Financing
(Effective 1st October 2020)
Bank Indonesia adjusts macroprudential policy in automotive sectors by: (Lowering the minimum limit of down payment on green automotive
loans/financing from 5-10% to 0%, in compliance with prudential principles.
1. Adjustment of Minimum Down Payments on Green Automotive Loans/FinancingThe green vehicles criteria refers to the Presidential
Regulation No. 55 of 2019 concerning Battery Electric Vehicles.
1. Applicable to banks with a non-performing loans (NPL) ratio below 5%

2. Effective 1st October 2020
Requirements:
1. Gross NPL ratio on total credit <5%; and
2. Net NPL ratio on automotive loan <5%

134
Principles of Domestic Non Deliverable Forward (DNDF)
Transaction
Purposes General Provisions
 Domestic Non-Deliverable Forward Transaction (DNDF Transaction)

1. To support the effort of stabilizing Plain vanilla derivative transaction of foreign exchange against rupiah in the form of
the Rupiah exchange rate through forward transaction with fixing mechanism in the domestic market
the additional of alternative
hedging instruments  Forward Transactions
Forward Transactions are sell/purchase foreign currencies against rupiah whereas the
2. To support the development and delivery of funds shall be performed in more than 2 days after the transaction date
deepening of the domestic

financial market  Fixing Mechanism
Transaction settlement mechanism without full movement of funds by calculating the
difference between rate on the transaction date and reference rate in JISDOR on a
3. To increase the confidence of
specified future time agreed in the contract (fixing date)
exporters, importers, and investors
in conducting economic and
 Other Definitions
investment activities through the
The definition of derivative transaction of foreign exchange against rupiah, Forward
flexibility of hedging transactions
Transaction, Spot Transaction, Customers, Foreign Party is referring to Bank Indonesia
against Rupiah currency risk
regulations regarding foreign exchange transaction against rupiah
135
Transaction
Bank can perform DNDF Transactions as follows:

1. Must have Underlying Transactions:
Transaction between: Including all following activities :
a. Trade of goods and services
b. Investments, loans, capital, and other investements.
c. Banks credit or financing in foreign currencies
(specifically for transactions between bank and
customers)
Can only be
Bank – Customer performed to Excluding following activities:
hedge rupiah a. Bank Indonesia certificates;
exchange rate b. Placement of funds with bank;
risk. c. Unwithdrawn credit facilities;
d. Documents of foreign currencies sales againts rupiah;
e. Money transfer by fund transfer companies
f. Intercompany loan
g. Money changer activities.
Bank – Foreign Party
2. Nominal of DNDF Transactions ≤ Nominal of Underlying

Transactions
3. Tenor of DNDF Transactions ≤ Tenor of Underlying

Transactions
Bank – Bank
136
Transaction
Transaction Settlement
• Use Fixing mechanism
• Reference rate: JISDOR for USD/IDR and BI FX Transaction MidRate for non-USD/IDR
• Settlement currency : IDR
• Roll over and early termination are not allowed
Roll over and early termination for DNDF is prohibited

However, unwind can be done by opening the reverse DNDF transactions
Cover Hedging
Bank may conduct DNDF Transactions with Bank Overseas for cover hedging purpose.
• Underlying Transactions: DNDF Transaction between Bank and Customer/Foreign
• Purpose: Hedging
Customer / Cover Overseas

Foreign Party Hedging Bank Hedging Bank
Notes:
Customer A conduct DNDF transactions with Bank B, and so Bank B can conduct DNDF
transactions with overseas Bank for the purpose of cover hedge.
137
Amendment on DNDF Regulation
*to provide more flexibility in DNDF transaction
*to increase liquidity and efficiency in domestic foreign exchange market
BI Regulation No. 20/10/PBI/2018 AMENDMENT BI Regulation No. 21/7/PBI/2019
Article 3 Article 3
1. DNDF transactions must have Underlying 1. Sell FX/IDR through DNDF up to $ 5 mio can be done without
underlying documents
Article 6 Article 6
2. Not Regulated; 2. DNDF can be terminated (unwind);
Article 11 Article 11
3. Underlying documents must be final (firm) with additional 3. Underlying documents for buy FX/IDR for DNDF is :
supporting documents • Final (firm commitment) + Supporting documents
4. Underlying documents for sell FX/IDR for DNDF above
threshold $ 5 mio can be:
• Final (firm commitment) + Supporting documents
• Projection (anticipatory basis) + Supporting documents
Article 11
Article 11
5. In using estimate underlying transaction documents in the
4. Not Regulated;
form of cash flow projection, Bank must evaluate the
appropriateness through:
a. Supplementary documents;
b. Historical data within at least 1 year before; and
c. Track record of the Customer or Foreign Party.
*Effective on May 17th, 2019; English version of the regulation is available in BI website.

138
Overnight Index Swaps (OIS) & Interest Rate Swaps (IRS)
As hedging instruments against Rupiah interest rate changes IRS is a contract between two parties to
periodically exchange rupiah interest rate flows
4 during the contract period or at the completion
of the contract based on certain notional
amount. IRS pricing is based on JIBOR.
3 OIS is an interest rate swap agreement based on

a daily overnight reference rate (IndoNIA)
Improvement of
IRS transaction
2 liquidity
Alignment
between JIBOR
and OIS interest  Encourage price transparency in the rupiah
rate money market
OIS transaction
1 with IndoNIA as
 Strengthen monetary policy transmission
 Provide alternative hedging instruments
benchmark rate against rupiah interest rate changes
IndoNIA & JIBOR  Support securities market deepening in
Indonesia
Strengthening
reference rate
based on real
transactions
139
OIS and IRS Transactions: General Provisions
Market Players. Banks, bank clients, both individual

and non-bank institutions, and also foreign parties. Market Conventions
Transaction Needs Analysis. A bank performing an IRS

or OIS transaction with a customer and/or foreign party
on behalf of the customer and/or foreign party is
Calculation Interest Payment OIS Quotation rates
required to have an analysis on the need of rupiah
Base ACT/360 based on Netting based on 2 decimals
interest rate derivative transactions.
Market Conventions. When performing IRS and OIS IndONIA Index Notional of Net Quotation : 1W, 2W,
transactions, the respective bank is bound by market with 5 interest payment in 1M, 2M, 3M, 4M,
conventions agreed upon by market players through decimals IDR with 0 decimals 5M, 6M
industry association including the Indonesian Foreign
Exchange Market Committee.
At the 1st phase, OIS
Compound
Settlement Date = 1 settlement will only
Settlement. Settlement can be performed as a netting Floating Rates
business days after be done at the end
payment and every transaction has to be settled in (CFR) based
Maturity Date (MD) of the OIS tenor
Rupiah. Close-out netting can be applied under on 5 decimals
(MD+1bd).
predetermined conditions.

140
Improving the Effectiveness of Monetary Policy Transmission
Bank Indonesia has instituted a Reformulation of Monetary Policy Operations Framework which consists of 3 pillars;
(1) implementation of BI 7day Reverse Repo Rate;
(2) implementation of reserve requirement averaging; and
(3) continue to implement money market deepening program.
Reformulation of
Monetary Policy Operational Framework
Implementation of BI 7 Day Implementation of Reserve Implementation of Money

Reverse Repo Rate Requirement (RR) Averaging Market Deepening Program
Enhancement of monetary policy Enhancement of banking liquidity Enhancement of instruments

signal management and transactions

141
Enhancement of Monetary Operations Framework
PREVIOUS JIBOR
• Can be traded among contributor banks for 10
minutes.
• Up to the amount of IDR10 billion.
• Up to 1-month tenor.
CURRENT JIBOR (as per June 1st, 2016)

• Can be traded among contributor banks for 20
minutes.
• Up to a total of IDR20 billion.
• Up to 3-month tenor.

142
Financial Intermediation Still Manages To Grow
Banking intermediation manages to grow positively in August 2020, while multi-finance financing contracts as economy yet to fully recover
Banking loans in Aug-20 managed to expand by 1.04% amidst pressure on credit Growth of financing distributed by multi-finance contracts by 12.90% in Aug-20 in
distribution due to the COVID-19 pandemic. line with slowing economic activity.
YoY
IDR tn
IDR Tn Bank Loans YoY Growth (rhs) YoY Financing Growth (rhs) 10%
6.000 5521,87 14%
500
12% 392
5.000 5%
400
10%
4.000 0%
8% 300
3.000
6% 200 -5%
2.000
4%
1,04% 100 -10%
1.000 2% -12,90%
0 0% - -15%
Jun-19
Nov-19
Dec-19
Mar-19
May-19
Mar-20
May-20
Apr-19
Apr-20
Jun-20
Jan-19
Feb-19
Jul-19
Aug-19
Sep-19
Jan-20
Feb-20
Jul-20
Oct-19
Aug-20
Nov-19
Dec-19
Mar-19
May-19
Mar-20
May-20
Apr-19
Jun-19
Apr-20
Jun-20
Jan-19
Feb-19
Jul-19
Sep-19
Jan-20
Feb-20
Jul-20
Aug-19
Oct-19
Aug-20
Capital raised through corporate issuance continues to increase. As of 22 Sep’20, Despites still in contraction, insurance premium declining trend continue to
the total of capital raising reaches IDR 84.9 Tn. stabilise since May.
IDR Tn 50
IPO Rights Issue Corporate Bond & Sukuk Life Insurance Premium Growth General & Reinsurance Premium Growth
180
160
140 30
120
100 66,8
-0,2
80 10
60 13,6
40
20 4,5 -10
0
Mar-20
May-20
Apr-20
Jun-20
Jan-20
Feb-20
Jul-20
Sep-20
2016
2017
2018
2019
Agu-20
-9,3
-30
Source: Financial Service Authority (OJK) 143

Resilient Financial Institutions
Domestic financial institutions capital are strong and stable amidst the pandemic, with high net interest margin and low leverage
CAR of the banking sector remains high and stable at 23.16% with Tier-1 capital at RBC of the insurance industry remains high and well above the minimum
21.39% as of August 2020 *) threshold (120%) *)
CAR Tier 1 Life Insurance (Lhs) General Insurance (rhs)

26 900 400
23,16 330
24 800 350
21,39
22 700 300
20 600
250
500
18 506 200
400
16 threshold Insurance RBC (rhs)= 120% 150
300
14 100
200 threshold Insurance RBC (Lhs)= 120%
12 100 50
10 0 0
Dec-19
May-19
Oct-19
May-20
Mar-19
Apr-19
Jun-19
Mar-20
Apr-20
Jun-20
Jan-19
Feb-19
Jul-19
Sep-19
Nov-19
Jan-20
Feb-20
Jul-20
Aug-19
Aug-20
Sep-19
Dec-19
Jan-19
Jan-20
Apr-19
Apr-20
Mar-19
May-19
Feb-20
Mar-20
May-20
Nov-19
Jun-19
Jun-20
Feb-19
Jul-19
Jul-20
Aug-19
Oct-19
Aug-20
Gearing ratio of multi-finance companies is steadily maintained at a level of below
Profitability of the banking sector as of Aug-20 remains high and stable *) three times in August 2020 *)
6 Net Interest Margin Return on Assets
4
4,43
3
4 2,4
2
2
1,12 1
0 0
Dec-19
Jan-19
May-19
May-20
Mar-19
Apr-19
Jun-19
Mar-20
Apr-20
Jun-20
Feb-19
Jul-19
Sep-19
Nov-19
Jan-20
Feb-20
Jul-20
Aug-19
Oct-19
Aug-20
Dec-19
Mar-19
May-19
Mar-20
May-20
Apr-19
Jun-19
Apr-20
Jun-20
Jan-19
Feb-19
Jul-19
Sep-19
Nov-19
Jan-20
Feb-20
Jul-20
Aug-19
Oct-19
Aug-20
Source: Financial Service Authority (OJK) *) provisional figures due to the relaxation on financial institutions’ report to OJK because of Covid-19
144
Manageable Credit Risks with Adequate Liquidity
Financial Institutions are equipped with ample liquidity, while credit risk is maintained at a low level and below the threshold
The ratio of liquid assets to deposit and non-core deposits is growing and
maintained well above the threshold following banks’ cautious appetite of Investment adequacy ratio in the insurance industry is steadily maintained above
lending*) 100% (threshold) *)
Liquid Assets to Non-Core Deposits % %
% 139,87 250 Life Insurance General Insurance
140 Liquid Assets to Deposits (rhs) 35
130 187
30 200
120
110 25
29,86 150
100 20
90
15 100
80 threshold LA to Deposit (rhs) = 10%
70 10 106,3
50 threshold Investment Adequacy Ratio= 100%
60
threshold LA/ NCD= 50% 5
50
40 0 0
Mar-19
Dec-19
Mar-20
May-19
Sep-19
May-20
Apr-19
Jun-19
Apr-20
Jan-19
Feb-19
Jul-19
Nov-19
Jun-20
Jan-20
Feb-20
Jul-20
Aug-19
Oct-19
Aug-20
Dec-19
Jan-19
Mar-19
May-19
Mar-20
May-20
Apr-19
Jun-19
Apr-20
Jun-20
Feb-19
Jul-19
Sep-19
Nov-19
Jan-20
Feb-20
Jul-20
Aug-19
Oct-19
Aug-20
NPL ratios are still manageable below the threshold, at 3.22% gross and 1.11% After a spike in July-20 due to credit relaxation and contracted financing, multi-
net as of August 2020 *) finance companies’ NPF has started declining in Aug-20 to 5.2% *)
%
5 6
5,2
NPL Net NPL Gross
5
4
3,22
4
3
3
2
2
1,11
1 1
0 0
Dec-19
Mar-19
May-19
Mar-20
May-20
Apr-19
Jun-19
Nov-19
Apr-20
Jun-20
Jan-19
Feb-19
Jul-19
Sep-19
Jan-20
Feb-20
Jul-20
Aug-19
Oct-19
Aug-20
Mar-19
Dec-19
Mar-20
May-19
May-20
Apr-19
Jun-19
Apr-20
Jun-20
Jan-19
Feb-19
Jul-19
Sep-19
Nov-19
Jan-20
Feb-20
Jul-20
Aug-19
Oct-19
Aug-20
Source: Financial Service Authority (OJK) *) provisional figures due to the relaxation on financial institutions’ report to OJK because of Covid-19
145
Manageable Market Risks
Amidst rising global pressure, the risk profile of domestic financial institutions remains at manageable levels
Net open position in the banking sector is maintained far below the maximum limit Mutual funds’ net asset value (NAV) is in recovery trend with steady movement
of 20% *)
%
5 IDR Tn NAV Mutual Funds JCI (rhs)
610 7.000
4 560 6.000
510 5.000
3
2,31 460 4.000
2 410 3.000
360 As of 5 October, 2020 2.000
1
310 1.000
0 260 0
Dec-19
Mar-19
May-19
Mar-20
May-20
Jul-20
Apr-19
Jun-19
Nov-19
Apr-20
Jun-20
Jan-19
Feb-19
Jul-19
Sep-19
Jan-20
Feb-20
Sep-20
Aug-19
Oct-19
Aug-20
Oct-20
Feb-19
Des-19
Feb-20
May-20
May-19
Okt-19
Mar-19
Apr-19
Jun-19
Mar-20
Apr-20
Jun-20
Jan-19
Jul-19
Sep-19
Nov-19
Jan-20
Jul-20
Aug-19
Aug-20
The exposures of multi-finance companies to foreign debt have largely been
Insurance & pension fund investment value is steadily increasing *) mitigated by company hedging measures
IDR Tn
IDR Tn IDR Tn
Insurance Pension Funds (rhs) 250 Domestic Debt Foreign Debt
1.500 400 225
1165,79 200 150,90
1.200 175
350
150
900
125
300
100
600
75
250 105,28
300 50
286,92
25
0 200 0
Dec-19
Apr-19
Apr-20
Mar-19
May-19
Mar-20
May-20
Jun-19
Nov-19
Jun-20
Jan-19
Feb-19
Jul-19
Sep-19
Jan-20
Feb-20
Jul-20
Aug-19
Oct-19
Aug-20
Mar-19
Dec-19
Mar-20
May-19
May-20
Apr-19
Jun-19
Apr-20
Jun-20
Jan-19
Feb-19
Jul-19
Sep-19
Nov-19
Jan-20
Feb-20
Jul-20
Aug-19
Oct-19
Aug-20
Source: Financial Service Authority (OJK) *) provisional figures due to the relaxation on financial institutions’ report to OJK because of Covid-19 146
Domestic Capital Market Performance Amid Global Challenges
Easing restrictions in many countries signals market positivism on economic recovery prospect, but effect of new cases and rising number of Covid-19’s still
remains Domestic investors still dominate the strengthening of domestic market
Uneven recovery still marks uncertainty in the global market as investment portfolios performance despite Jakarta’s PSBB retightening has increased JCI’s
tend to shift into gov’t bonds volatility
Stock Index Performance as of 16 Oct’20 (compared to 31 Dec’19) 320 Comp Bond Index Comp Stock Index (rhs) 7000
WORLD 3,16 298 6500
THAI -21,91 300
S KOREA 6,55 6000
INDO -18,99 280
HKN -13,49 5500
SIN -21,40
PHIL -24,53 260 5000
CHIN 9,38
4500
MAL -5,35 240 5.103
JPN -1,04 4000
EU -14,14
US 220
0,24 3500
BRAZ -14,99
TURK 4,24 200 3000
Oct-19 Dec-19 Feb-20 Apr-20 Jun-20 Aug-20 Oct-20
-35 -25 -15 -5 5 15
Non-resident portfolios’ sell-off are decreasing, Gov’t Debt Securities recorded Attractiveness of government’s bond causes a decline in bond yields in line
IDR2.68 Trillion inflow as of 5 Oct’20 with strengthening expectation of rupiah against the USD
80 Gov't Debt Securities Equity Yield (%) 5-yr Yield 10-yr Yield USD/IDR
60 10 20.000
2,68 20-yr Yield IDR (rhs)
40
18.000
20 9 16.000
0
-20 14.000
8
-40 12.000
-60 -0,02 10.000
7
-80 8.000
-100 6 6.000
-120 As of 5 October, 2020 4.000
-140 5 2.000
Dec-19
May-19
May-20
Feb-19
Mar-19
Apr-19
Jun-19
Feb-20
Mar-20
Apr-20
Jun-20
Jan-19
Jul-19
Sep-19
Jan-20
Aug-19
Jul-20
Sep-20
Aug-20
05-Oct-20
Oct-19
Nov-19
Dec-19
May-19
Aug-19
Jul-19
May-20
Aug-20
Mar-19
Apr-19
Jun-19
Feb-20
Mar-20
Apr-20
Jun-20
Jan-19
Sep-19
Nov-19
Jan-20
Jul-20
Sep-20
Feb-19
Oct-20
Oct-19
Source: Bloomberg and Ministry of Finance 147
Stimuli to Support Indonesia’s Financial Industry
OJK and other government institutions have worked intensively to minimize the impact of COVID-19 on the economy
1 Maintaining business fundamental of the real sector 2 Maintaining financial market stability
OJK Regulation No. 11/POJK.03/2020: OJK Circular Letter No. 3/SEOJK.04/2020:
“National Economic Stimulus as A Countercyclical “Other Conditions as Significantly Fluctuating Market Condition
Policy of The Impacts of COVID-19 Outbreak” on Stock Buyback issued by Issuers or Public Companies”
Bank  Relaxation of credit assessment and credit restructuring to debtors - Prohibition of short-selling
who are affected by COVID-19. - Asymmetric Auto Rejection (current auto rejection limits under 7%)
- Credit assessment (up to IDR10 billion) is based only on the - 30-minute Trading Halt for 5% decrease in IHSG
punctuality of debtors to pay their debts and interests. - Negation of trade in the pre-opening session
- This applies to Commercial and Sharia Banks - Stock buyback without prior general shareholders meeting
- With maximum 1 year period of credit restructuring
*) OJK Regulation No.18/POJK.03/2020: *) OJK Regulation No.15/POJK.04/2020:

“Written Orders to Handle Bank Problems” “Plan and Organization of the General Meeting of Shareholders of
Public Companies”
 Stabilizing financial sector particularly in banking sector amid
COVID-19 outbreak by allowing merger, consolidation, acquisition, Aimed to enhance the participation of shareholders in General Shareholders
and/or integration to banks permitted by OJK. Meeting (RUPS) by allowing electronic authorization to third parties.
*) OJK Regulation No.16/POJK.04/2020:

*) OJK Regulation No. 14/POJK.05/2020: “The Implementation of Electronic General Shareholders Meeting (GSM)”
“Countercyclical Policy as an Impact of COVID-19 Regulating the implementation of electronic corporate decision making by
NBFI for Non-Bank Financial Institution (NBFI)” requiring a member of the board of director/commissioner in charge of
 Extended deadline of report submission GSM, while other electronic attendances are counted as fulfillment of
 Relaxation of financing assessment attendance quorum.
 Financing Restructuring
- Regulating loan restructuring, deadline of periodic reports, *) OJK Regulation No.17/POJK.04/2020:
- Conducting fit and proper tests, “Material Transaction and Changes in Business Activities”
- Determination of asset quality of financing, Improving the definition and procedure of Material Transaction, as well as
- Calculation of solvency level of insurance companies, the effectiveness of regulation to enhance the protection of public
- Calculation of pension fund quality, and shareholders and the quality of information disclosure in Material
- Implementation of asset management provisions. Transaction and Business Activities Changes.
Source: Financial Service Authority (OJK) *) OJK Regulations in Response to Government Regulation in Lieu of Law No. 1 Year 2020 to maintain financial stability and economic activities. 148
Further Stimuli to Provide Liquidity and Capital in Banking Industry
Relaxation for Conventional and Sharia Banks Restructured credit/financing is excluded from the Loan at Risk (LAR) in the assessment
(Reporting/Treatment/Governance of of banks performance. Banks are also allowed to approve credit restructuring with several
Restructured Credit/Financing) alternative governance by considering the necessary principle.
i. Eliminating the obligation to fulfill Capital Conservation Buffer by 2.5 percent of Risk
Weighted Assets (ATMR) for BUKU 3 and BUKU 4 banks (until 31 March 2021)
ii. Maintaining the obligation of fulfilling Liquidity Coverage Ratio (LCR) and Net Stable
Adjustment of Banking Provisions Implementation Funding Ratio (NSFR) for BUKU 3, BUKU 4, and foreign banks at a minimum level of
during Relaxation Period 85 percent (until 31 March 2021)
iii. Dismissing the quality assessment of Foreclosed Collateral (AYDA) based on the
period of ownership (until 31 March 2021)
iv. Reducing the obligation of education funds provision to less than 5 percent
Deferral of Basel III Reforms Implementation i. The deferment reforms include Risk-Weighted Assets (RWA) for operational risk, credit
(valid until 31 December 2022) risk, market risk, and Credit Valuation Adjustment (CVA)
ii. Until then, the Capital Adequacy Requirement still refers to the current RWA standard.
i. Relaxing the General Loan Loss Provision (PPAP) to less than 0.5%
ii. Exemption of Interbank Placement for Legal Lending Limit (BPMK) and Maximum Limit
Relaxation for Rural and Rural Sharia Banks of Fund Channeling (BPMD) to a maximum 30% of capital
iii. Temporary Halt on Foreclosed Collateral (AYDA) calculation based on period of
ownership
iv. Providing 5% less on Education, Training, and Human Resource Fund from the
previous year

OJK’s Role in the National Economic Recovery Program (PEN)
National Economic Recovery Program (PEN) Providing Interest Subsidies for MSMEs
PP No. 23/2020 Article 20 Paragraph 2 Government Regulations No. 23 of 2020
All debtors with credits up to IDR500 million will be given interest
OJK carry out efforts to support the economic recovery, subsidies while debtors with credits up to IDR10 billion will go
through: through the same mechanism with credit restructuring program. The
program is eligible for debtors of banks/multi-finance companies
with Performing Loan (Kol 1 and Kol 2) before COVID-19, valid from
Fund Placement 29 February 2020.
Targeted
Placement of funds by the Government to provide Beneficiaries Other Requirements
liquidity support to banks conducting loan
restructuring and to provide additional credit / • MSMEs debtors with credits up to • Obedient taxpayer
IDR10 billion
working capital financing • Excluded from National
• Debtors of housing loans (KPR) up to Blacklist (DHN)
type 70
• Debtors of motorcycle loans for
productive activities, including online
OJK supports the program through Liquidity Buffer transportation and informal business
and Credit Restructuring to Banks and Multi-
Finance Companies
OJK’s Role Mechanism
Providing necessary information in the The provision regarding the
implementation of interest subsidies budgeting, implementation, and
based on the procedure which will be responsibility mechanism of interest
arranged through Joint Decision Letter subsidies and debtor requirements
(SKB) are regulated in the Minister of
Finance Regulation (PMK)

Strategic Policies in Financial Sector
Providing financing alternatives

for Goverment Priority Sectors
Supporting acceleration of
national economic growth
Providing financial access to

MSMEs especially in remote
areas
Preparing financial services

industry to cope with
Industrial Revolution 4.0
Improvement of business
process in the industry

Continuous Program on Capital Market Deepening
…continuously strengthened, including through capital market deepening initiatives
Enhancing the supply-side Strengthening market infrastructure
 Product: QIB offering and private placements, private  Development of Integrated Licensing (SPRINT).
fund, asset-backed securities, REITs, infrastructure fund,  Enhancement of electronic reporting system.
IGBF (Indonesia Government Bonds Future) & equity  Development of electronic public offering.
crowdfunding.  Integrated data warehouse and supervisory system.
 Issuer: Financial conglomerates, big bank debtors, local
government, IDX incubators, SMEs, SOEs & big tax payers.
Enhancing the demand-side Strengthening governance & customer

protection
 Enhancing the role of the domestic institutional investors  Development of market players’ capacity
(insurers & pension funds) in capital markets .  Enhancement of GCG for publicly-listed companies
 Development of the domestic investor base (conducting  Establishment of disgorgement fund
investor education programs).
 Simplification in opening securities account.
 Development of regional securities companies.
 Development of e-bookbuilding.
 Online marketing initiative

Enhancing Financial Literacy & Inclusion
OJK strives to build a strong foundation for financial inclusion programs, to ensure access to financial products &
services by Indonesians of all social classes. Such initiatives also include the enhancement of financial literacy and
financial consumer protection.
Developing Promoting the Strengthening

Developing
Enhancing the micro-credit establishment the role of
financial education
role of the products with of Islamic Financial Access
models utilizing
“Investment additional business microfinance Acceleration
various delivery
Alert Taskforce” support (“KUR institutions (“Bank Taskforce (TPAKD) in
channels
Klaster”) Wakaf Mikro”) local areas
The result of OJK’s 2019 national survey demonstrated an improvement in financial literacy & inclusion among
Indonesians compared to that of 2016.
21.8% 29.7% 38.03% 59.7% 67.8% 76.19%
Financial 2013 2016 2019 Financial 2013 2016 2019

Literacy 2019 Target: 35% Inclusion 2019 Target: 75%

A Comprehensive Financial Deepening Program
…strategy to tackle challenges in deepening Indonesia’s financial markets
In Apr-2016, the Minister of Finance, the Governor of Bank Indonesia, and the Chairman of the Board of Commissioners of the Financial Services Authority
launched a Coordination Forum for Development Financing through Financial Market (FK-PPPK). The three authorities have agreed to formulate “The National
Strategy of Financial Market Development”
Vision:
To Establish Deep, Liquid, Efficient,
Inclusive, and Safe Financial Market
Mission: Financial Market as Sources of National Development Financing
TARGET KEY PERFORMANCE INDICATOR STRATEGIC ACTION PLAN
1 2 3 POLICY COORDINATION,
ECONOMIC FUNDING & RISK MARKET INFRASTRUCTURE
3 Pilars HARMONIZATION &
MANAGEMENT DEVELOPMENT
EDUCATION
Money Bond Stock Syariah Structure Product

6 Markets FX Market
Market Market Market Market Market
7 Elements Fund Regulatory

Market Infrastructure
of Financial Framework
Market Instrument Benchmark Rate & Coordination &
Ecosystem Standardization Education
Intermediaries

BI’s Roles in Supporting Distribution of Non-Cash Social Assistance
(NCSA)
BI supports government’s program of shifting social assistance to targeted non cash social assistance disbursement
through the electronic payment system. In the future, electronic mechanism disbursement will be also applied to LPG
subsidy.
NCSA Programs
Pilot Project
Family Hope Program Smart Indonesia

(Program Keluarga Program (Program
Harapan -PKH) Indonesia Pintar-PIP)
Gradual
Implementation
2016-2020
9876543210
XXYYZZ
12345678
Full
Non Cash
Food Assistance Implementation
(Bantuan Pangan
Non Tunai – BPNT) LPG
Subsidy
Interconnected &
interoperable
payment system

155
Progress of NCSA Programs
Family Hope Program Non Cash Food Assistance

(Program Keluarga Harapan - PKH) (Bantuan Pangan Non Tunai -
BPNT)
• BPNT is a poverty alleviation and social protection
• The Family Hope Program (PKH) is a program that
program that is managed by the central
provides cash to very poor households.
government. It provides subsidized rice and eggs
IDR1.89 million /year will be granted for each
to low - income households. IDR110 thousand/
household. PKH will be granted every February,
month will be granted for each household as
May, August, and November.
BPNT that can be used in certain stores which
called e-warong.
• As of December 2017, PKH has been distributed
• As of December 2017, BPNT was distributed to
to 6.0 million households on non-cash basis.
1.2 million households in 44 cities.
• In 2018, BPNT has been distributed to 10.1 million
• In 2018, PKH has been distributed to 10 million households (65.1% of the target of 15.5 million
households on non-cash basis. households target).
• In 2019, BPNT has been distributed to
• In 2019, PKH has been distributed to 9.84
15 million household on non cash basis
million house hold on noncash basis with total
with total realization of IDR15.44T
realization of IDR32.75T.

156
Section 8
Progressive Infrastructure Development:
Strong Commitment on
Acceleration of Infrastructure Provision
The Government has Enacted Various Reforms to Accelerate
Infrastructure Provision
Fiscal Reforms Institutional Reforms Regulatory Reforms
Viability Gap Funding (VGF) KPPIP Direct Lending
Increase project financial feasibility by KPPIP is actively involved in accelerating delivery Allow guarantee for direct lending to SOE to
contributing up to 49% of the construction cost of priority infrastructure projects accelerate financial close process for
(MoF Reg. No. 223/2012) infrastructure projects (Presidential Reg. No.
PT. Sarana Multi Infrastruktur 82/2015)
Availability Payment
Merging between PT. SMI and Gov’t Investment Land Acquisition
Issuance of regulatory framework to allow annuity Center (PIP) to become an infrastructure funding
payment by the Government during concession company Stipulate land acquisition acceleration based on
period to concessionaire since project operation Law No. 2/2012 (Presidential Reg. No.
based on infrastructure service availability (MoF Indonesia Infras. Guarantee Fund (IIGF) 148/2015) and land acquisition fee payment for
Reg. No. 190/2015 for Central Gov’r and MoHA impacted community (Presidential Reg.
Reg. No. 96/2016 for Regional Gov’t.) IIGF has the potential to provide project guarantee
No.56/2017)
for non-PPP projects
PPP Unit Economy Packages

Land Revolving Fund
Provide facilities to help GCA on preparing PPP Conduct deregulation for issues hindering
A revolving-fund sourced from State Budget, to project (PDF/TA) infrastructure delivery and develop a task force
accelerate land acquisition (MoF Reg. No. under CMEA to ensure the effectiveness of
220/2010) BLU LMAN economic packages implementation
Risk-sharing Guidelines The State Asset Management Agency (BLU LMAN)
is mandated to provide land fund for National
IIGF has issued risk allocation and mitigation Strategic Projects to ensure timely land acquisition
guidelines for PPP project process
Tax Incentives (Tax Holiday)
Indonesia Infrastructure Guarantee Fund (IIGF)
MoF Reg. No.35/2018 allowed 100% Tax Holiday
for 17 Pioneering Industries for 5 – 20 years IIGF has the potential to provide project guarantee
depending on the investment value for non-PPP projects
Source: Committee for Acceleration of Priority Infrastructure Delivery (KPPIP) 158

Latest Policy Reforms
Policy reforms are aiming to create a more conducive investment climate for infrastructure delivery
Presidential Reg. No. 20/2018 on Use of Foreign Labor – released on March 2018
This regulation aims at simplifying the permit application process for foreign workers, hence making the process more efficient and faster, in order to
rise foreign direct investment in Indonesia
Presidential Reg. No. 56/2017 on Social Impact Handling in Land Acquisition Process for PSN – released on June 2017
This regulation allows the Executing Agency to pay land acquisition compensation to the impacted community who does not have official rights over the
land required for PSN. This regulation helps to solve the land acquisition problem due to community objection over the land use.
MoF Reg. No. 60/2017 on Procedures for the Provision of Central Government Guarantee for the Acceleration of the National
Strategic Projects Implementation – released on May 2017
The supporting regulation for Presidential Reg. No. 3/2016 on the Acceleration of the National Strategic Projects Implementation. This regulation
regulates the scope and general requirements and procedures to propose and grant guarantees, as well as allocate state budget obligation on
government guarantees to all PSN. The guarantee provision is expected to increase the feasibility and trust of investors to participate in the
implementation of PSN.
Government Reg. No. 13/2017 on National Spatial Plan (RTRWN) – released on April 2017
The issuance of RTRWN can resolve spatial planning mismatch in the implementation of infrastructure projects listed in the annex of Government Reg.
No. 13/2017. A number of breakthroughs were developed, and one of them is that the Minister of Agrarian and Spatial can issue a recommendation of
spatial utilization; so that the process of obtaining project permission can be done.
MoF Reg. No. 209/2019 on Procedures for Land Acquisition for National Strategic Projects and Asset Management of Land
Acquisition by State Asset Management Agency – released on December 2019
The implementing regulation of Presidential Reg. No. 102/2016 on Financing of Land Acquisition for the Development of Public Interest in the
Framework of the National Strategic Implementation. This regulation becomes the legal basis for the financing of the procurement of National Strategic
and Priority Projects by BLU LMAN.

Some of Most Recent Reforms
Policy reforms are aiming to create a more conducive investment climate for infrastructure delivery
Presidential Reg. No. 32/2020 on Infrastructure Financing through Limited Management Rights – released on Feb 2020
This regulation allows foreign investors to collaborate with national companies when investing in state owned assets and state owned enterprise’s assets.
Presidential Reg. No. 66/2020 on Land Acquisition Funding for Public Interest Development in the National Strategic Projects
Implementation – released on May 2020
This regulation supports acceleration of land acquisition funding by allowing Minister to pay back the National Strategic Project’s land acquisition funding
with State Revenue and Expenditure Budget
Presidential Reg. No. 79/2019 and No. 80/2019 on Acceleration of Economic Development in selected area in Central Java Province
– released on November 2019
This regulations aim to increase regional competitiveness which will have an impact on investment growth and an integrated and sustainable national
economy. This Presidential Reg. states that the Coordinating Ministry for Economic Affairs (CMEA) will provide assistance for the availability of
planning, preparation and implementation documents.
MoF Reg. No. 139/2020 on Procedures for the Provision of Central Government Guarantee for the Acceleration of the National
Strategic Projects Implementation – released on September 2020
This regulations acts as a guideline for the implementation of Presidential Reg. No. 66/2020
Committee for Acceleration of Priority Infrastructure Delivery (KPPIP) is currently in the process of designing the third amendment to
Presidential Decree No.3 /2016 on the Acceleration of the Implementation of National Strategic Projects
This new regulation change will add new PSN proposals that have been approved, as well as deleting the list of completed projects.
The new regulation will consist of 201 PSN projects dan 10 programs.

Reforms Along the Project’s Life Cycle
...to encourage and accelerate infrastructure project using PPP scheme
Government of Indonesia
Project Viability
Guarantee Availability
Development Funding Tax Facilities Land Acquisition
Fund Payment
Facility (PDF) Gap (VGF)
Preparation Bidding Process Construction
Guaranteeing A scheme in which A facility to support

A facility with
Govt. contractual MoF Reg. No. concessionaires land acquisition for
contribution to
obligations under 159/PMK. 010/2015 receive sum of infrastructure projects
construction cost
infrastructure re: tax holiday for money periodically particularly projects
Project development to increase
concession pioneer sector, such from central or that involve private
facility contributing project financial
agreements and as base metal, oil regional government sector
to assist GCA on PPP viability
Mof Regulation No refinery, basic after the completion
project preparation
130/PMK. petrochemical, of an asset. Managing enitiy:
(PDF&TA) Managing Entitiy:
08/2016 re: Govt machinery, renewable MoF Regulation, and Ministry of Finance,
Ministry of
guarantee for energy, & telco MoHA Regulation on Ministry of Agrarian
Managing entity: Finance based electricity project equipment industries. Availability Payment and Land Spatial/BPN
KPPIP, PT SMI PT IIF, on GCA proposal acceleration Sector will be further has been ratified. and BLU-LMAN
and Ministry of
Managing entity: expanded
Finance Gov’t.
IIGF and MoF Managing entity: Gov’t. commitment:
commitment:
Managing entitiy: Ministry of Finance & US$ 6.7 bn (2016-
49% max. Per Govt’s comitment: Ministry of Finance Ministry of Home 2019)*
project cost US$ 450 mn
Affairs *USD1=IDR13,500

Efforts to Accelerate Infrastructure Provision
Regulation improvement to accelerate land procurement process

 The Government of Indonesia issued Law No. 2 of 2012 on Land Acquisition for Public Interest, with a purpose to provide certainty about the land
acquisition duration for the Government Contracting Agencies and the Investors. The Law sets an estimated 583 days maximum time to complete the
land acquisition process.
 For its implementation, the Law No. 2 of 2012 was supported by the Presidential Regulation
No. 71 of 2012 on Land Acquisition Implementation for Developing Public Facilities, which Law No. 2/2012 was successfully applied in:
has been revised into the Presidential Regulation No. 30 of 2015. The Amendment to the
Regulation allows a Business Entity to allocate funding for a land acquisition which can be 1. Palembang – Indralaya section of the Trans
reimbursed by the Government following the completion of land acquisition process. With this Sumatera Toll Road Project
Regulation, the land acquisition process is expected not to be delayed by the unallocated 2. Java North Line Double Track Rail Project
budget or the delay on the budget disbursement.
Land Procurement Process as Stipulated in Law No. 2 of 2012

Efforts to Accelerate Infrastructure Provision
…the establishment of Indonesia Asset Management Agency (LMAN)
Government has established State Asset Management Unit (LMAN) as a solution to

accelerate the land acquisition through the provision of land acquisition fund
LMAN at a Glance Land Acquisition Budgeting Scheme
1. Unutilized fund can be allocated for the

1. LMAN was established in December 2015 following year
through the issuance of MoF Reg. 219/2015
concerning State Assets Management 2. Non-project-specific land acquisition fund
allocation. Unused allocated fund can flexibly be
2. In 2016, BLU LMAN was mandated to provide
made available for the other project
land acquisition fund as a support to Ministry of
Public Works due to US$ 1,081 Mio shortage of 3. Land acquisition fund for PSN projects is
fund to acquire land for priority toll roads managed under one agency
3. The scope of support is broaden for all National
Strategic Projects through the issuance of MoF
Reg. 21/2017 (j.o MoF Reg. 209/2019 j.o. MoF
Reg. 139/2020) concerning land acquisition
financing guideline for PSN
4. In April 2019, LMAN has disbursed up to US$ 4 This LMAN initiative provides better
billion (IDR 54 Trillion) through bridging finance flexibility, coordination and
scheme for 93 toll road projects, and planned to
start the implementation of direct payment
management of land acquisition fund
scheme provision for National Strategic
Projects (PSN)

Fundamental Regulations Initiation
to accelerate infrastructure projects delivery
Government Reg. No. 13/2017 on National Spatial Plan (RTRWN)
1
The issuance of RTRWN can resolve spatial planning mismatch in the implementation of infrastructure projects listed in the
annex of Government Reg. No. 13/2017. A number of breakthroughs were developed, and one of them is that the Minister
of Agrarian and Spatial can issue a recommendation of spatial utilization; so that the process of obtaining project
permission can be done.
MoF Reg. No. 60/2017 on Procedures for the Provision of Central Government Guarantee for the
Acceleration of the National Strategic Projects Implementation
2 The supporting regulation for Presidential Reg. No. 3/2016 on the Acceleration of the National Strategic Projects
Implementation. This regulation regulates the scope and general requirements and procedures to propose and grant
guarantees, as well as allocate state budget obligation on government guarantees to all PSN. The guarantee provision is
expected to increase the feasibility and trust of investors to participate in the implementation of PSN.
Presidential Reg. No. 56/2017 on Social Impact Handling in Land Acquisition Process for PSN
3 This Presidential Reg. allows the Executing Agency to pay land acquisition compensation to the impacted community who
does not have official rights over the land required for PSN. This regulation helps to solve the land acquisition problem due to
community objection over the land use.
4
Presidential Reg. No. 66/2020 on Land Acquisition Funding for Public Interest in Implementing PSN
This Presidential Reg. was issued to accelerate the process of land acquisition funding for PSN as well as replacing the
Presidential Reg. No. 102/2016
MoF Reg. No. 21/2017 on Procedures for Land Acquisition for National Strategic Projects (PSN) and Asset Management of
Land Acquisition by State Asset Management Agency (j.o. MoF Reg. No. 5/2019, j.o. MoF Reg. No. 209/2019, j.o. MoF Reg.
5 No. 139/2020)
The implementing regulation of Presidential Reg. No.102/2016 on Financing of Land Acquisition for the Development of
Public Interest in the Framework of the National Strategic Implementation. This regulation becomes the legal basis for the
financing of the procurement of National Strategic and Priority Projects by BLU LMAN

National Strategic Projects (PSN) may receive privileges
as stipulated in the Presidential Reg. No. 3/2016 j.o. the Presidential Reg. No. 58/2017 j.o. the
Presidential Reg. No. 56/2018
Acceleration of Non- Determination of National

State Budget Projects Strategic Projects
Settlement of Legal Permit & Non-permit

Issues Completion
12 01
11 02
Accelerate Goods and
Spatial Planning
Service Procurement
10 03
Problems and Hindrance 09 04 Land clearing

Completion acceleration
08 05
SOE’s Assignment 07 06 Local Content
Utilization
Projects Monitoring via Government

Additional Facilities
KPPIP IT System Guarantee Provision
Existing Facilities

Under Presidential Reg. No.56/2018, PSN list has been revised
into 223 Projects and 3 Programs
27
53 17
Projects
12
Projects Projects
Projects
Sulawesi
Sumatra Kalimantan US$23.4 B
Maluku & Papua
US$43.6 B US$35.7 B
US$34.5 B
89
Projects 3 Programs
National projects Projects
12 Projects
Java
US$100.7 B
US$72.7 B 13
Projects
Bali &
Nusa Tenggara
US$0.7 B Exchange rate: US$ 1 = IDR 13,500
PSN includes 15 sectors at project level and 3 sectors at program level

Project Program
Electricity
1 Program
Road Dams SEZs & IEs Railway Ports Clean Water & Airports
Energy
69 Projects 51 Projects 29 Projects 16 Projects 10 Projects Sanitation 7 Projects
11 Projects
8 Projects Aeroplane Industry
1 Program
Sea Dike Irigation Economic Equality

Smelter Technology Housing Fisheries/Farming Education
1 Projects 6 Projects 1 Program
6 Projects 4 Projects 3 Projects 1 Projects 1 Projects
Progress on 223 Projects and 3 Programs PSN
The Estimated Investment Value for 5 Sectors with Highest Investment

223 Projects + 3 Programs PSN1 Value
State
Budget Energy
11 Projects
10%
US$ 89.8 Bn
SOEs/
Electricity
RSOEs
Private 1 Program
31% US$ 76.7 Bn
59%
Roads
69 Projects
US$ 49.7 Bn
State Budget
Total Investment US$ 31.6 Bn Railways
Value2 16 Projects
SOEs/RSOEs US$ 29.2 Bn
US$ 96.6 Bn
US$ 307.4
Private SEZs and IEs
Billion US$ 179.2 Bn 31 Projects
US$ 31 Bn
1Exclude
7 projects which investment value are still unknown
Exchange rate : US$ 1 = IDR 13,500
Progress on Projects and PSN Programs
as of December 2018 as of September 2019 as of August 2020
14% 18% 13%

24% 22%
3% 28%
3%
15%
3%
13%
12%
23% 33% 44%
21% 12%
32 projects already completed 51 projects already completed 62 projects already completed
32 projects, 1 electricity program, and 1 27 projects, 1 electricity program, and 1 27 projects, 1 electricity program, and 1
economic equality program in construction economic equality program in construction economic equality program in
and partial-operation phase and partial-operation phase construction and partial-operation phase
22 projects in construction and will start
48 projects in construction and will start 98 projects in construction and will start
operating in 2019 operating in 2019
operating after 2019
52 projects in construction and will start 80 projects in construction and will start
operating after 2019 operating after 2019 6 projects in transaction
6 projects in transaction 4 projects in transaction 30 projects and 1 Aircraft Industry

Program in preparation phase
53 projects and 1 Aircraft Industry Program 39 projects and 1 Aircraft Industry Program
in preparation phase in preparation phase
In 2016 - 2018, 62 PSNs have been Completed with Total
Estimated Investment Value of USD23.7 Billion

From 2016 – June 2020, there were 92 projects1 completed with
total estimated investment value of US$ 35.9 Billion
15
16 46
51
1810 3
32 National
48 26 14 5
56 11 16 4 2 13
27 3 8
53
12
155
25 50
29
2
41 6 57 9 58 17
4 31
14
59
301
24 47 3 6
8 9 2
Completed 2016 49 23
11 54
61
55 19
17 21 62 33 34 35 22 1
10
36 37 38 39 40 18 7
20 7
45 43 44
20 Projects (US$ 2.5 Bn) 52 12
28 13
• 7 Airports • 1 Seaports 42
• 1 Toll Road • 1 Gas Pipe
• 6 Dam • 4 National Border
Completed 2019 Completed until

Completed 2017 Completed 2018
June 2020
10 Projects (US$ 4.5 Bn) 32 Projects (US$ 15.4 Bn) 30 Projects (US$ 12.2 Bn) 2 Projects (US$ 1.3 Bn)
• 2 Toll Road • 3 National Border • 2 Railway • 1 Airports • 4 Airports • 1 Railway (LRT South
• 1 Access Road • 1 Dam • 4 Dam • 4 Industrial Zone • 9 National Road Sumatera/Palembang)
• 1 Airports • 1 Irrigation • 1 Irrigation • 4 Smelter • 6 Industrial Zone • 1 Airport (Yogyakarta
• 1 Gas Facility • 10 Toll Road • 1 Fishery Center • 2 Smelter International Airport)
• 5 SEZ • 4 Dam
• 2 Technology
1In cumulative, including projects that are already taken out in 2016 and 2017 • 2 railways
Source: Committee for Acceleration of Priority Infrastructure Delivery (KPPIP)
• 1 seaport Exchange rate: US$ 1 = IDR 13,500
17
0
Progress on 37 Priority Projects
From the revised National Strategic Projects, the Government has selected a list of 37 Priority Projects to be the focus of
infrastructure provision.
1. Balikpapan-Samarinda Toll Road 13. LRT of DKI Jakarta 26. Tuban Oil Refinery
2. Manado-Bitung Toll Road 14. Kuala Tanjung International Hub Seaport 27. RDMP/Revitalization of the Existing Refineries
3. Panimbang-Serang Toll Road 15. Bitung International Hub Seaport (Balikpapan, Cilacap, Balongan, Dumai, Plaju)
4. 15 Segments of Trans – Sumatera Toll Road 16. Patimban Port 28. Abadi WK Masela Field
5. Probolinggo – Banyuwangi Toll Road 17. Inland Waterways Cikarang-Bekasi-Laut (CBL) 29. Unilization Field Has Jambaran-Tiung Biru
6. Yogyakarta – Bawean Toll Road 18. Palapa Ring Broadband 30. Indonesian Deepwater Development (IDD)
7. SHIA Express Railway 19. Batang, Central Java Power Plant (CJPP) 31. Tangguh LNG Train 3 Development
8. MRT Jakarta South-North Line 20. Central – West Java Transmission Line 500 kV 32. West Semarang Drinking Water Supply System
9. Makassar-Parepare Railway 21. Indramayu Coal-fired Power Plant 33. Jakarta Sewerage System
10. Light Rail Transit (LRT) of Jakarta-Depok- 22. Sumatera 500 kV Transmission (4 Provinces) 34. National Capital Integrated Coastal Development
Bogor-Bekasi 23. Mulut Tambang Coal-fired Power Plant (6 Provinces) (NCICD) Phase A
11. LRT of South Sumatera 24. PLTGU (16 Provinces) 35. Jatiluhur Drinking Water Supply
12. East Kalimantan Railway 25. Bontang Oil Refinery 36. Lampung Drinking Water Supply
37. Waste to Energy Program in 8 cities
Progress on 37 Priority Projects
Progress of 37 Priority Projects (as of June 2020) Recent Milestones
4 project is completed
Palapa Ring
8% 6 projects in construction and West package has been fully operasional since April 2018.
11% partial operation phase
22 projects in construction and will
5% start operating after 2019 Trans Sumatera Toll Road
Segment of Pekanbaru-Dumai (131,5Km) has been operated on Sept
60% 3 projects in transaction 26th, 2020.
16%
2 projects in preparation
West Semarang Water Supply System:
On March 2018, pre-qualification stage has resulted 4 shortlisted bidders
Funding Scheme of 37 Priority Projects

Mass Rapid Transit (MRT) Jakarta South-North
Total Investment Value Allocation of repayment liability on additional-loan for Phase I and Phase II
US$ 183.9 Billion has been decided in the KPPIP Ministerial meeting – 49% will be borne by
8%
Central Government and 51% will be borne Provincial Government of DKI
US$120.7 billion from Private/ Jakarta.
PPP
Patimban Port
26% US$47.7 billion from SOE/
Loan Agreement has been signed on 15 November
Regional SOE
2017.
66% US$15.5 billion State/
Regional Budget
(including G-to-G loan)
Exchange rate : US$ 1 = IDR 13,500

Note: This data is still going to be verified by The Executive Office of President (KSP)
and Indonesia’s National Government Internal Auditor (BPKP)
Energy Sector: the Progress of 35.000 MW Program
Debottlenecking through regulation:

Average economic growth of 6.7%
requires 7,000 MW / year or 35,000 1. Regulation No.1/2015 concerning electricity
MW / 5 years supply cooperation & joint utilization of the Launching 35.000 MW
electrical network among license holders. Cabinet Meeting by the President in
(Kepmen ESDM No. 0074/2015 on Progress of Goa Beach Sanden DIY
RUPTL 2015-2024) 2. Regulation No.3/2015, concerning Procedures of 35,000 MW
Purchasing Electrical Power and benchmark prices
for Electrical Power through the Direct Selection &
Appointment.
17 Dec ‘14 Jan ‘15 Jan ‘15 16 Mar ‘15 4 May ‘15
Cabinet Meeting
“There’s electricity crisis in Indonesia, 35,000 MW Program Distribution
requires construction of large capacity Update Electricity Supply Business Plan (RUPTL)
plant "
2019-2028)
Kalimantan (4,477 MW) Sulawesi (2,570 MW)
1. Op. 904 MW 1. Op. 1,146 MW
Maluku-Papua (877 MW) The progress so far:
2. Cons. 785 MW 2. Cons. 963 MW
1. Op. 437 MW
Aug‘20
3. PPA 1,413 MW 3. PPA. 76 MW
4. Proc. 235 MW 2. Cons. 54 MW
4. Proc. 218 MW 3. PPA. -
Sumatera (9,410 MW) 5. Plan. 158 MW 5. Plan. 150 MW
1. Op. 1,302 MW 4. Proc. 160 MW No Phase MW %
2. Cons. 4,248 MW 5. Plan. 225 MW
3. PPA 3,555 MW 1 Operating 8,400 24
4. Proc. 85 MW
5. Plan. 85 MW 2 Construction 19,055 54
Jawa, Madura & Bali (18,399 MW) Nusa Tenggara (812 MW) 3 Signed Power-Purchase Agreement 6,528 18
1. Op. 4,184 MW 1. Op. 427 MW
2. Cons. 12,730 MW 2. Cons. 274 MW 4 Procurement 839 2
3. PPA. 1,485 MW 3. PPA. -
4. Proc. - 4. Proc. 5 MW 5 Planning 724 2
5. Plan. - 5. Plan. 106 MW
Source: PLN Note : Progress of 35,000 MW Electricity Program as of August 2020
Energy Sector: the Progress of 35.000 MW Program
December 2016 November 2017 December 2018 December 2019 August 2020
2% 3% 3% 8% 2% 2%
19% 24%
6% 5% 3% 2%
16% 9%
19% 18%
28%
44% 32%
30%
38% 52%
24% 57% 54%
706 MW in operating 998 MW in operating 2,899 MW in 6,811 MW in 8,400 MW in

phase phase operating phase operating phase operating phase
10,141 MW in 15,676 MW in 18,207 MW in 20,168 MW in 19,055 MW in

construction phase construction phase construction phase construction phase construction phase
8,478 MW signed 13,782 MW signed 11,467 MW signed 6,678 MW signed 6,528 MW signed
Power-purchase Power-purchase Power-purchase Power-purchase Power-purchase
Agreement Agreement Agreement Agreement Agreement
10,560 MW in 3,163 MW in 1,683 MW in 829 MW in 839 MW in
procurement phase procurement phase procurement phase procurement phase procurement phase
5,824 MW in planning 2,228 MW in planning 954 MW in planning 734 MW in planning 724 MW in planning
phase phase phase phase phase

Acceleration of 35.000 MW Program
The Government has issued Presidential Regulation No. 4/2016 on Electricity Infrastructure Acceleration to accelerate power projects
Government Support (outside Guarantee) Local Content

• Provision of Primary Energy Obligation on the usage of local content through
• Provision of Renewable Energy Government an open book system, price guideline, reverse
• Simplicity of Permits and non-Licensing engineering or other methods to maximise the
• Spatial Planning local content.
• Land acquisition Assignment
• Resolution on Legal Matters
PT PLN
Provision of Electricity
1 2A 2B
EPC Powerplant SJKU* Ministry

PLN Subsidiary Independent
and Transmission of Finance
(Joint Venture) Power Producer
Strengthen Equity
Strengthen PLN‘s Balance Sheet
Loan from independent Equity Injection by the PT PLN’s divident
lenders Government allocation
Refinancing Hedging
Bond issuance by Asset Company
Direct Lending *)SJKU=Surat Jaminan
PT PLN Revaluation Tax Holiday
Financial Asset Optimization Kelayakan Usaha/
Other types of Business Viability
Direct Lending
funding Guarantee Letter
Significant Progress on Infrastructure Projects
Roads Improving Monitoring System on Infrastructure Projects1
KPPIP developed an integrated IT System for monitoring of national

strategic and priority projects, providing database on projects’ latest
status which can be effectively utilized for monitoring and decision-
making purposes.
Trans-Sumatra Toll Road Merah Putih Bridge, Ambon Database Platform data outlook
Dams Drinking Water Processing
Project information that is efficient and
such as map, track, functional using a user-
existing study and friendly framework.
latest project status.
Jatigede Dam (Operational) Umbulan Drinking Water Provision System, East Java
Transportation
An integrated IT Record decisions related to

Jakarta MRT Project2 Terminal 3 Ultimate Soekarno-Hatta2 system with projects and synchronize
monitoring capacity the implementation
for stakeholders, so schedule that can be
that they can have utilized by stakeholders.
real time data.
1 Source: Committee for Acceleration of Priority Infrastructure Delivery (KPPIP)

2 Not funded from National Budget
New Tanjung Priok Port Project2 Nop Goliat Dekai, Papua 176
Infrastructure Projects and Financing Schemes
Promotion of Infrastructure Development to Accelerate Economic Growth
Infrastructure Development is a Key Priority Establishment of PPP Unit

 Infrastructure Development in order to: Broad  Champion project preparation and acceleration of the PPP agenda in
1. Accelerate growth particularly in rural areas Objective Indonesia
2. Support industrial development and tourism
 Improve quality of project selection under KPPIP – OBC criteria
3. Reduce unemployment and poverty
Core  Support project preparation through PDF support and highlyqualified
 Infrastructure fundraising needs: $357.9 bn (or equivalent to IDR4,796.2 tn) Mandates transaction advisors
 245 National Strategy Projects under National Medium Term Plan for 2015 – 2019 with an  Act on behalf the Minister of Finance in providing government support and
estimated total cost of IDR 4,197 tn (USD 313 bn) approvals for projects
 37 priority infrastructure projects with an estimated cost of IDR 2,490 tn (USD 180 billion)  Coordinate all public finance instruments
 Majority of 37 priority projects are expected to commence commercial operation by 2018 - Additional  Provide input for PPP Policy program Development and Regulations
2022 Mandates  Implement capacity building for Govt. Contracting Agency (GCAs)
 One stop shop for PPP promotion & Information
Budget Public Private Partnership SOE & Private Sector

 Central & regional budget  Certain infrastructure projects to be funded and operated through a partnership  Government to inject capital into SOEs: Intended
(special allocation fund & between the Indonesian government and the private sector multiplier effect to develop more infrastructure
rural transfer) – Projects ready for auction under the PPP Scheme: projects
 Primarily to support basic – Toll roads projects such as Balikpapan-Samarinda and Manado-Bitung  Key focus areas:
infrastructure projects: – Railway projects such as an express line into Soekarno-Hatta International Airport – Infrastructure and maritime development
– Food security: – Water supply projects such as the West SemarangProject – Transportation and connectivity
Irrigation, dams etc.  Various government support for PPP: – Food security
– Maritime: Seaports, – Project Development Facility (PDF): Helps Government Contracting  Medium term infrastructure developments to
Agencies (GCAs) in project preparation and transaction focus on:
shipyards etc.
– Viability Gap Fund: improves financial viability of PPP projects – Water Supply
– Connectivity: Village
– Government Guarantees: Supports PPP projects’ bankability by providing – Airports
roads, public sovereign guarantees
transportation etc. – Infrastructure Financing Fund: Provided through PT SMI and IIGF – Seaports
– Availability Payment (AP): GCA pays private partner based of availability of – Electricity and power plants
infrastructure services – Housing
– Mining
Note: OBC: Outline Business Case; PDF: Project Development Facility; GCA: Government Contracting Activity
Source : Ministry of Finance; Bappenas; KPPIP: “Komite Kebijakan Percepatan Penyediaan Infrastruktur” or National Committee for the Acceleration of Infrastructure Delivery

Government Guarantee For Basic Infrastructure Development
Reflects strong commitment to national development planning
Government Guarantee Program Contingent Liabilities from Government Guarantee as of Q2 2020 **
 Power (Electricity) – Full credit guarantee for PT PLN’s Exposure/

Central Government Guarantee for Guarantee
debt payment obligation under FTP 1 10,000MW and No. Outstanding
Infrastructure Programs Documents
35GW programs*. (USD bn)
 Clean Water – Guarantee for 70% of PDAM’s debt

1 Coal Power Plant 10,000 MW Fast Track Program (FTP 1) 16 1.41
principal payment obligations.
2 Clean Water Supply Program 6 0.01
 Toll road – Full credit guarantee for PT Hutama Karya’s
Credit debt payment obligations for the development of
3 Direct Lending from International Financial Institution to SOEs 6 1.70
Guarantee Sumatra Toll Roads.
 Infrastructure - Full credit guarantee on SOE’s borrowing 4 Sumatra Toll Road 10 2.99
from international financial institution & guarantee for
5 Renewable energy, Coals & Gas Power Plant 10,000 MW (FTP 2) 7 3.86
PT SMI’s local infrastructure financing.
 Public Transportation (Light Rail Transit) – Full credit 6 Public-Private Partnerships (PPP) 7 4.73
guarantee for PT Kereta Api Indonesia’s debt payment
obligations for the development of LRT Jabodebek. 7 Regional Infrastructure Financing 1 0.19
8 Public Transportation (Light Rail Transit) 1 0.24

 Power (Electricity) – Guarantee for PT PLN’s obligations
Business Viability under Power Purchase Agreements with IPPs (off-take 9 Electricity Infrastructure Fast Track Program (35GW) 6 4.36
Guarantee (BVG) and political risk) under FTP-2 10.000MW and 35GW
Total 60 19.49
programs*
 Infrastructure – Guarantee for Government-related  From 2008 to Q2-2020 **, the government has issued 88 guarantee documents with total
PPP Guarantee entities obligations (line ministries, local governments, value of USD40.07 billion, there were 28 guarantee documents worth USD3.82 billion have
SOEs, local SOEs) under PPP contracts/agreements been expired.
 The Maximum Guarantee Limit for the period 2020-2024 is set at 6% of GDP.
 Beginning in 2008 the Government has allocated a contingent budget with respect to these
 Infrastructure – Guarantee against infrastructure risks
guarantees. Any unused budget allocation may be transferred to a guarantee reserve fund.
Political Risk for National Strategic Projects (Presidential Decree This reserve fund, together with the relevant annual budget allocations, serves as reserves
Guarantee No.58/2017) which are not covered by other type of for any claim that arises from these guarantees.
guarantees
*) MOF provides both credit guarantees and BVGs for 35GW program **) As of end June 2020; currency conversion of IDR14,302.00/USD1 and IDR16,080.46/EUR1

178
Government Financial Facilities for PPP Projects
Financial Facilities to Attract More Private Participation More Funding Schemes are on the Pipelines
Project Financing funded by the private sector through

the granting of concessions for an operating asset
owned by the Government/SOE (based on the policy
Viability Gap Fund Project Development of the Government) to the private sector to be
Facility (PDF) LCS
(VGF) operated & managed.
(Limited
Concession
Scheme) Scheme Characteristics
• Asset is owned by public sector

• Operating asset, not greenfield project
Government Guarantees (directly • Records positive cash flow for the last several
by MoF or through IIGF) years
• Predicted revenue
Project Financing funded by any source of funds

other than Government’s budget, e.g. long term
PINA management funds (insurance, repatriated funds
Availability Payment Financing from from tax amnesty, pension funds, etc.), private equity
Schemes PT. SMI and PT. IIF (Non-Government investors and infrastructure funds. Supported &
Budget facilitated by National Development Planning
Infrastructure Ministry/Bappenas.
Financing)
Those financial facilities were instrumental in supporting the execution of PPP Scheme Characteristics
projects, indicated by the signing of financial close
of the following PPP projects: • Asset is owned by private sector
• Greenfield / brownfield / operating projects
179
Progress of PPP Infrastructure Projects
Successful Projects Reaching Financial Close in 2016 and 2017
Project Cost
No Project Name Financial Facilities Status
(IDR tn)
1 Central Java Power Plant 40 Guarantee (MoF & IIGF) FC on June 6th, 2016; Construction 30%; COD Target: May 2020
2 Palapa Ring – West Package 1.28 PDF, IIGF Guarantee & AP FC on August 11th, 2016; COD target: February 2018
3 Palapa Ring – Central Package 1.38 PDF, IIGF Guarantee & AP FC on September 29th, 2016; COD target: March 2018
4 Palapa Ring – East Package 5.13 PDF, IIGF Guarantee & AP FC on March 29th, 2017; COD target: September 2018
5 Umbulan Water 2.1 PDF, VGF & IIGF Guarantee FC on August 30th, 2016; COD target: July 2019
Signed PPP Projects in 2016 and 2017
Project Cost
No Project Name Financial Facilities Status
(IDR tn)
1 Batang–Semarang Toll Road 11 IIGF Guarantee PPP & guarantee contracts signed on April 27th, 2016
2 Manado–Bitung Toll Road 5.1 IIGF Guarantee PPP & guarantee contracts signed on June 8th, 2016
3 Samarinda–Balikpapan Toll Road 9.9 IIGF Guarantee PPP & guarantee contracts signed on June 8th, 2016
4 Pandaan–Malang Toll Road 5.9 IIGF Guarantee PPP & guarantee contracts signed on June 8th, 2016
5 Serpong–Balaraja Toll Road 6.0 - PPP contracts signed on June 8th, 2016
6 Jakarta–Cikampek Elevated Toll Road 14.8 Co guarantee (MoF & IIGF) PPP & guarantee contracts both signed on December 5th, 2016 and
February 22nd, 2017
7 Krian–Legundi-Krian Toll Road 9.0 Co guarantee (MoF & IIGF) PPP & guarantee contracts both signed on December 5th, 2016 and
February 22nd, 2017
8 Serang–Panimbang Toll Road 5.3 Co guarantee (MoF & IIGF) PPP & guarantee contracts signed on February 22nd, 2017
9 Cileunyi–Sumedang-Dawuan Toll Road 8.2 Co guarantee (MoF & IIGF) PPP & guarantee contracts signed on February 22nd, 2017
Source: Ministry of Finance, as of July 2017 180

New Guarantee Schemes for Non-PPP Projects
Guarantee on SOE Direct Lending from International Financial Institutions (IFIs)
The Government had issued Presidential Regulation No 82/2015 and Ministry of Finance Regulation No 189/2015 to provide guarantee for SOE
Direct Lending from IFIs for the Development of Infrastructure Projects.
The objective of this guarantee is to provide credit enhancement in terms of low interest rate and long tenor financing,
with 3 main principles:
Best practice of fiscal risk

State finance soundness Fiscal sustainability
management
Guarantee for Regional Infrastructure Financing Provision
The Government had issued Ministry of The objective is to give stimulus to the
Based on Government Regulation acceleration of local infrastructure
Finance Regulation No 174 of 2016 to
No. 95/2015 and Ministry of Finance development through the ease of access
provide guarantee to PT SMI on the
Regulation No. 232/2015, Minister of
assignment of regional infrastructure to infrastructure financing and to boost
Finance assigns PT SMI (Sarana Multi
financing provision, by loan to local local economic growth, as well as to
Infrastruktur) to carry out functions in
governments that is transferred from PIP provide alternative financing schemes in
providing loan to local government, as
to PT SMI, and new loan channeled by PT order to meet local infrastructure
previously carried out by PIP
SMI to the local government. development needs and to reduce
(Government Investment Center).
reliance on state/local budget.
181
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Republic of Indonesia

Synergy to Drive National Economic Recovery,

Published by Investor Relations Unit – Republic of Indonesia

This Presentation Book also can be downloaded from: http://www.bi.go.id/en/iru/presentation/red/Default.aspx

New Section on Economic Fiscal Policy Update

Bank Indonesia Board of Meeting

Investment Realization Progress on Infrastructure Projects

1 Economic Recovery Program and Its Updates

Institutional and Governance Effectiveness:

Economic Factor: Monetary and Financial Factor:

External Factor: Progressive Infrastructure Development:

Fiscal Stimuli Phase 1 Fiscal Stimuli Phase 2

1 Brought forward the launch of the Pre-Employment Card in

Increased disbursements of the Noncash Food Assistance

3 Provided a stimulus package for housing in the form of an

5 Reduced the air passenger service fee (PSF) by 20% for

Discounted the price of aviation fuel at airports located

Subsidised or provided grants totalling IDR3.3 trillion to local

Measures Launched on March 2, 2020 Measures Launched on March 18-19, 2020

Strengthening the intensity of triple intervention policy to

Expediting the enforcement of domestic vostro rupiah accounts

Source: Bank Indonesia

PRESIDENT Vice Chairman I Coordinating Minister for Maritime and

National Economic TASKS

Source: Coordinating Ministry for Economic Affairs

MAIN PROGRAMS Two Strategies Facing the Covid-19 Pandemic

Maintaining Life (Health) Maintaining Livelihoods

Covid-19 Handling Task Force National Economic Recovery &

Main Key Driving investment  Capacity utilization increases

Creating jobs Driving investment Capacity utilization increases

Source: Coordinating Ministry for Economic Affairs

Need: Brake fluid Oil/Gas

Strong SEATBELT: Driver safety while driving

Decreased Improvement of Health Service Facilities

Source: Coordinating Ministry for Economic Affairs

Source: Coordinating Ministry for Economic Affairs

National Budget (APBN) Financial Sector Policy

1. Relaxation Deficit exceeds 3%, but starting in 2023 it returns

Source: Coordinating Ministry for Economic Affairs

Source: National Development Planning Agency 15

Health Sector Economy Sector

Source: National Development Planning Agency 16

Social Business Corporate Sectoral & SMEs Health

Protection Incentives Financing Regional

Source: Ministry of Finance 17

PEN Realization as of 21 Oct 2020 (%)

*Provision of this program

Trend of PEN Fund Absorption (IDR Tn)

• Source: Ministry of Finance

PEN Funding (excl. Health)

Diversification Reserve IDR58.87T

Source: Ministry of Finance 19

IDR25.40T IDR48.80T IDR110.20T

HEALTH MSME SOCIAL PROTECTION

IDR372.3T IDR14.90T IDR20.40T IDR136.70T

CORPORATE FINANCE BUSINESS INCENTIVE SECTORAL AND LOCAL GOV’T

*) Temporary agreement on PEN budget allocation