Republic of Indonesia Presentation Book - February 2021

Republic of Indonesia
Maintaining Stability and Supporting Growth,

Mitigating Covid-19 Risk
February 2021
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, Ph.: +6221 2981 8232)
Thasya Pauline (Deputy Ministry for Macroeconomic and Finance Coordinator - Coordinating Ministry for Economic Affairs, Ph. +6221 352 1843)
Putri Rizki Yulianti (Fiscal Policy Office - Ministry of Finance, Ph.: +6221 345 0012)
Subhan Noor (Directorate General of Budget Financing and Risk Management - Ministry of Finance, Ph.: +6221 351 0714)
E-mail: contactIRU-DL@bi.go.id
This Presentation Book also can be downloaded from: https://www.bi.go.id/en/iru/presentation/default.aspx

1
What’s New in This Edition
Economic Recovery Program Fiscal Policy Updates

and Its Updates
…page 65-77
…page 8-23
The Job Creation Law Financing Policy Updates
…page 30-36 …page 74-89
GDP Q4-2020 Realization Bank Indonesia

Board of Meeting Decision
…page 50-53
…page 100-101
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
Progressive Infrastructure Development:

4 8
External Factor:
Improved External Resilience 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
Establishment of a COVID-19 Task Force to Accelerate Decentralized tests by increasing the number of Covid-19
1 Coronavirus Disease 2019 (COVID-19) Handling. 8 test laboratories throughout Indonesia.
Extension of the emergency status for COVID-19 until 29th

2 May 2020. Providing Designated Hospitals, including additional
9 designated hospital in Galang Island.
Permission for civil servants to work from home, while

3 Utilization of four (4) of ten (10) Wisma Atlet Kemayoran
maintaining the continuity of public services. 10 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 workers in Wisma Atlet Kemayoran and recruitment of 328
4 transportation, and offices; calls for carrying out social 11 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.
Closing and limiting the mobility of Indonesian citizens

12 Establishment of Contingency Plans in the regions level.
5 abroad and foreigners to enter Indonesian territory with

strict immigration and health protocols. Preparation of drugs that have been used for Covid-19
patients in China according to doctor's prescription. The
Evacuation of Indonesian citizens from affected countries 13 drug has been distributed to designated facilities and its
stock is continuously being augmented with domestic
6 and strict quarantine processes with complete medical
pharmaceutical production.
facilities.
Speed up the procurement and distribution of personal
Conducting Rapid Test in 17 provinces with positive patients
7 14 protective equipment for designated hospitals and the
of Covid-19.
provision of incentives for medical personnel.
Source: Bank Indonesia
5
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

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

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

6
Government Measures to Mitigate Covid-19 Risk
Fiscal and Non Fiscal Stimuli
Fiscal Stimuli Phase 1 Fiscal Stimuli Phase 2
Brought forward the launch of the Pre-Employment Card in

1 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

3
IDR800 billion subsidy as well as a subsidy on down payments
totalling IDR700 billion. 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.
7
Government Regulation In UU 2/2020, Previously Perppu No.1 2020
Regulates two topics:

(1) State Financial Policy (2) Stability of Financial System
State Financial Policy Stability of Financial System
1. Relaxation Deficit exceeds 3%, but starting in 2023 it returns to the

maximum level of 3%. 1. Improved Coordination among The
2. Relaxation is related to the allocation/reallocation of expenditure Financial System Stability Committee
between institutions, between functions, and between programs and (“FSSC”) members
mandatory spending.
2. Provide the necessary authority to 4
3. Relaxation of allocation / reallocation of Regional Government
institutions to prevent a crisis (forward
Expenditures.
looking) in the KSSK forum for example
4. Providing loans to the Indonesia Deposit Insurance Corporation
to issue instruments, BI buys
(“IDIC”)
government bond on the primary
5. Issuance of Government bond can be purchased by Bank Indonesia,
market, lending to “IDIC” and “FSA”
SOEs, corporate investors and/or retail investors
may request a merger or consolidation
6. Use of alternative budget sources for example ASL, education
of Financial Services Institutions.
endowment funds, and funds managed by the Public Service Agency.
7. Taxation Policy: 3. Foreign exchange management (LLD)
a) Decrease in Corporate Income Tax Rates gradually to 20% management for residents
starting in 2022; 4. Increase public confidence without
b) Taxation Incentives in the Capital Market for public ownership causing moral hazard.
<40%;
c) Taxation of Electronic Transactions;
d) Extension of tax administration time;
e) Customs facilities in the context of COVID-19.
Source: Coordinating Ministry for Economic Affairs 8

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

Government'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
Source: Coordinating Ministry for Economic Affairs

10
Covid-19 Handling Fund and National Economic Recovery
Health Sector Comittee Economy Sector

(COVID-19 Handling) (Chairman: Coordinating Minister for Economic Affairs ) (National Economic Recovery/PEN)
PEN and
Reducing the Spread of Covid-19 Vice Chairman Covid-19
Vice Chairman 2020 2021*
• Coord. Minister for Stimulus
• Minister of Health
Government Responsibilities: 3T Maritime and Investment Budget
• Test of Covid-19 for Public • Coord. Minister for • Minister of Home Affairs
• Tracing for Every Positive Result, and Politics, Law, and • Exceutive Secretary I
• Treat Every Case Well
Security
• Exceutive Secretary II TOTAL IDR 695,2 T IDR 553,1 T
• Coord. Minister for
Human Development
Community Responsibilities: 3M and Culture
1. Health IDR 87,55 T IDR 104,70 T
• Mask Awareness, • Minister of Finance
• Make Sure to Wash Hand Regularly, and 2. Social Safety
IDR 203,90 T IDR 150,96 T
• Make Sure to Maintain Social Distancing Vice Chairman + Executive Team Leader net
Minister of SOEs
3. Business Will be reported
IDR 120,61 T
Reducing COVID-19 Death Rate Incentives regularly
Government Responsibilities: 4. SME’s

IDR 123,46 T
• Optimizing Health Facilities (Public Health COVID-19 Task
PEN Task Force Support
Center& Hospital) Force IDR 156,06 T
(Chairman: SOEs Vice
• Supporting Health Workers (Chairman: 5. Corporate
Chairman of BNPB)
Minister) IDR 53,57 T
Financing
6. Sectoral
COVID-19 Vaccines Provision
Institution/
Health and Economic Policies Ministry and
Presidential Law No. 99/2020 as Vaccination Regional IDR 106,11 T IDR 141,36 T
need to Integrated to Encounter Government
Roadmap Covid-19 Support for
Economy

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

Step on The Gas!
Brake  Financial Sector Safety Nets

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

13
Covid-19 Vaccination as Game Changer for National
Economic Recovery
HEALTH PERSONNEL, PUBLIC OFFICERS AND THE ELDERLY WILL GET THE FIRST VACINATION PRIORITY
1 2 3 4
Target HEALTH PUBLIC OFFICERS VULNERABLE OTHER
WORKERS COMMUNITIES COMMUNITIES
181,5 millions people Vaccinations are

carried out for
16,9 M Communities in With a cluster
areas with a high risk approach according to
health workers in vaccine availability
34 provinces ELDERLY of transmission
Vaccines
1,5 M 21,5 M 63,9 M 77,7 M
VACCINATION PERIOD; VACCINATION PERIOD
426,8 million doses Jt
JAN-FEB 2021 FEB-JUN 2021
VACCINATION PERIOD
MAR/APR 2021 – DEC 2021
Procurement of Vaccines “Gotong Royong” Vaccine

Total Firm Order (FO): 329.5 millions doses
Total additional options (AO): 334 millions doses “Gotong Royong” Vaccine Potential Vaccines
Total potential for procurement: 663.5 millions doses is a special vaccine
program for workers Sinopharm Moderna
SINOVAC NOVAVAC COVAX ASTRAZENECA whose implementation is

the responsibility of the Sputnik V CansinoBIO
FO: 125,5 mn doses FO: 50 mn doses FO: 54 mn doses FO: 50 mn doses
AO: 100 mn doses AO: 80 mn doses AO: 54 mn doses AO: 50 mndoses company

Progress of Vaccination Implementation
As of February 25, 2021, the implementation of Vaccination has been given to 1.39 millions people (95% of the Vaccination Target) and
the second dose of vaccination has also been carried out for 832 thousand (57% of the Vaccination Target)
VACCINATION STAGE-1 VACCINATION STAGE-2

• A total of 38.5 millions people will receive the 2nd phase of
(Progress) vaccination consisting of public officers and the elderly
• Starting February 17, 2021, 1404 market traders have been vaccinated
Vaccination Targets • Vaccine service methods through health facilities, institutions, on-site
mass vaccination, mobile mass vaccination
1,5 M Prospective Recipients

Elderly Market Trader
Vaccinated-1 Vaccinated-2 Educator Religious leaders
People's
Government employees
representatives
1,39 million 832 thousand State officials Security
Public Servant Athlete
95,0% 56,7% Public Transportation
Tourism
Journalists & Media
Workers

Micro-Scale Activity Restriction (PPKM) as a Support for
Government Vaccination Program
The purpose of the micro PPKM is to suppress positive cases of covid-19 as a precondition for success for handling Covid-19 and for
national economic recovery
Micro PPKM Control Scenarios
Red Orange Yellow Green
Micro Scale Activity Restriction Higher Community Moderate Community Low Community No Active Cases
Program (PPKM) Transmission Transmission Transmission
> 10 houses in a If there are 6-10 houses If there are 1-5 houses If there are no house in a
PIC neighborhood that have in a neighborhood that in a neighborhood that neighborhood that have
positive confirmed cases have positive confirmed have positive positive confirmed cases
 Home Affairs Ministry  Regional Govt. during the last 7 days cases during the last 7 confirmed cases during during the last 7 days
 PC-19 Task Force  Police and Military days the last 7 days
Duration Fulfillment of Basic Needs for Self Isolation

Applied every 2 week followed by Evaluation Target: Citizens who are confirmed positive, close contacts, and suspects
Assistance: Rice (10 kg Pack) and Masks during the self-isolation period (14 days)
Impact
 Decrease in Social  Decrease in Positive The implementation of PPKM and PPKM Mikro for 5 weeks has
Mobility Case of Covid-19
succeeded in reducing the rate of increase in Active Cases
Active Involvement of Military, Police,  No. of Active Cases has decreased significantly (-17.27% in a week)
and Other State Apparatus  Trends in Active Cases in 5 Provinces succeeded in reducing the % of active cases
 The trend of BOR decreases, all provinces have succeeded in reducing BOR <70%
 Healing Trends in 5 Provinces succeeded in increasing the% cure rate. Mortality
trends in 3 Provinces succeeded in decreasing the% mortality rate
123 Regencies / Cities in 7 Provinces
 Trends in Prokes Compliance in all Provinces had increased in the range of 87.64%
to 88.73%

The Pre-Employment Card Program Successfully Helped
Indonesian Workers During the Pandemic Period
The Pre-employment Card is a program from the government for job seekers to workers affected by Covid-19 to improve skills through
training as well as get incentives.
Realization 2020 Semester I Pre-Employment

Registration Recipients Pre-Employment
Card Program
Card Program in 2021
5,5 M
Ecosystem
43,8 M
Registrant in Pre-Employment
Pre-Employment Card Recipient
• 7 Digital Platform •
•
Budget: IDR 10 trillion
Benefit value:
Card Websites From all Cities (Batch 1-11)* • 150 Training
and Regencies in Indonesia Institutions  Rp1 million training assistance
5,316,499  Total post-training incentives IDR
• 4 Educational
2.4 million (IDR 600 thousand x 4
34 514
Recipients
Has received an incentive
Institutions
months)
Province Cities and • 3 Job Portals
 Post-survey incentives total IDR
Regencies
13.4 T Incentives Have
Been Disbursed
• 5 Payment Partners 150 thousand (IDR 50,000 x 3
surveys)
• Batch 12: 600,000 attendees
SEMI-SOCIAL ASSISTANCE: EMPLOYMENT:
• Target audience: 2.7 million people
Provides skills while protecting Encouraging employment, including
purchasing power entrepreneurship
Changed from previously unemployed as of
88.9% Increased participant work
skills (* BPS) 35% February 2020 to working when surveyed
(*Evaluation Survey)
Incentives are used to buy
81.2% daily needs (* BPS) Changed from unemployed to
Skilling improvement in both 17% entrepreneurship
>94% skilling, reskilling, and upskilling (*Evaluation Survey)
(* Evaluation Survey) Changed from being unemployed to being
18% an employee / laborer / freelance
Source: Coordinating Ministry for Economic Affairs (*Evaluation Survey) 17
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
Deepening of and Absorption of New
Automotive Industrial Structure Workers
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

18
Fiscal Incentives Policy to Boost the Economy
The government facilitates fiscal incentives to create a conducive investment climate, especially for industry players. Through increased
investment, it is hoped that it can strengthen the domestic industrial structure
TAX INVESTMENT SUPER DEDUCTION

TAX HOLIDAY
ALLOWANCE ALLOWANCE TAX
• The criteria are new investment, Super Deduction Vocational

• Facilities in order to increase
taxpayers including pioneer • Engaging industry in vocational
direct investment activities for • Facilities in order to
industries, and income received activities to provide knowledge
certain business fields and / or encourage investment in
from the main business activities and encourage the transfer of
in certain areas. labor-intensive industries,
carried out. knowledge
• The facilities include a support programs for job
• Pioneer industries are defined as • A maximum reduction of 200%
reduction in net income of 30% creation and absorption of
industries that have broad gross income from costs in the
of the total investment for six Indonesian workers.
linkages, provide added value and context of providing work
years, accelerated • Incentives in the form of
high externalities, introduce new practice, apprenticeship, and / or
depreciation and amortization, facilities to reduce net
technologies, and have strategic learning activities
imposition of income tax on income by up to 60% for
value for the national economy.
dividends paid to foreign tax labor-intensive sectors
• There are 18 industrial sectors R & D Super Deduction
that fall within the scope of subjects of 10% or lower • There are 45 labor- • Increase the role of industry in
pioneer industries based on a tax treaty, and intensive industrial sectors fostering innovation and the use
compensation for losses of up and employ an average of of the latest technology in the
Updated: 31 Dec 2020 to ten years. 300 workers in 1 tax year. production process
 82 Taxpayers; 14 countries investors • The criteria are having a high
 Investment plan of IDR 1,356 trillion • Maximum gross income
 Realization of IDR 204 Trillion
investment value or for export,
deduction of 300% over R&D
 Business locations in 24 provinces a large absorption of labor; or
 Workforce of 112 thousand costs carried out in Indonesia
have a high local content.
The Government Rolled Out A Tax Incentive to Boost Vehicle
Sales and Public Consumption
This incentive aims to stimulate people's purchasing power, especially in the middle class, immediately so that it has a positive impact
on the national economy.
 Stimulus is in the form of an incentive, reducing the luxury goods sales tax
(PPnBM) for cars.
 The relaxation is valid for cars running on engines 1500 cc and below, including
sedans, 4x2 s, and cars built using up to 70 percent of locally made components
Period of Stages
The Government will subsidize the discounted amount. The PPnBM rebate is to be applied gradually,
starting on March 1, 2021
1. In the first stage, which is from March to May, the tax discount is 100 percent of the normal rate
2. The second stage, form June to August, the rebate is 50 percent
3. Lastly, from September to December, the tax cut is 25 percent.

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
2 POSTPONEMENT OF PRINCIPAL & INTEREST SUBSIDIES 3 LOW INTEREST
1 QUALITY
ASSESSMENT Placement of IDR30 Trillion Government
KUR Super Mikro : Loan up to IDR 10 million
According to POJK
Funds at Bank Himbara
No. 11/POJK.03/2020 • Interest subsidy will be 19% consist of additional interest subsidy 6% and
& 14/POJK.05/2020 regular interest subsidy 13%, debtors pays 0% interest from Aug – Dec 2020.
KUR MKM (SMEs): 4 GUARANTEE
Asset Quality
Loan up to Rp10 million up to IDR 500 million Government support in the form of
Arrangement:
• Postponement of installments and 6% additional interest subsidy for the guarantees by Askrindo and Jamkrindo
Loans ≤ IDR 10 period from Apr-Dec 2020 to 0%.
billion can be based
only on the accuracy Loan > Rp500 million up to IDR 10 billion OTHER SUPPORT
of principal / interest • Postponement of installments and interest subsidies from 3% to 3% for the
Income Tax for MSMEs is borne by
payments period Apr-Jun 2020 and interest subsidies from 2% to 4% for the period Jul- 5 Government
Sep 2020.
Restructurisation:
UMi, Mekaar, Pegadaian (Pawnshop) MSMEs receive a final PPh rate of 0.5%
The credit quality for (PP 23/2018) borne by the government
affected debtors is • Postponement of principal installments and interest subsidies for 6 months (DTP).
from Apr-Sep 2020
determined to be
current since Fintech Loan, Co-op, Farmers, LPDB, LPMUKP, UMKM PEMDA
MICRO BUSINESS PRODUCTIVE
restructuring • Relaxation is given a 6% interest subsidy for 6 months 6 PRESIDENT ASSISTANCE
The restructuring is Direct assistance to 12 million Micro-
Based on Coordination Meeting held by Financing Policy Committee for MSME on
carried out without a Business Actors in the amount of IDR 2.4
December 28, 2020, KUR implementation in 2021 are as follows:
ceiling limit / type of • Additional interest subsidy 3% for 6 months, debtors pays 3% interest. million per recipient
financing • Increase the ceiling of KUR in 2021 to IDR 253 trillion.

21
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 (MSME) is given an additional interest subsidy of 6% until 31 Dec 2020. For 2021, MSME is given an additional
interest subsidy of 3% for 6 months, so MSME pays 3% interest.
A
B Fully commercial loan
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 People's Business Credit
Mekaar UMi KUR Super
Assistance & Pre- Development Program (PKBL) & Commercial
employment Card BWM LPDB* Micro (KUR) Regular
Private CSR
Facilities Social grants Private PKBL & CSR Funds Interest Subsidy from the Government Market
Government Guarantee Mechanism
Business Ability

Indonesia's Economic Improvement Trend Continues
Some economic indicators indicate an improvement. Government Expenditure also decrease the contraction in GDP by Expenditure Growth.
Confidence in PMI Manufacture also hit a four-year level high, Increase in for People's Business Credit (KUR), recovery in Consumer
Confidence Index (CCI), and also increase in Direct Investment
4.97 Trade Balance (Billion USD) Demand for People's Business

2.97 4.00 20.00
Credit (KUR) – IDR Trillions
1.96 198.58
GDP Growth (%YoY) 2.00 0.00
140.1
120.3
-2.19 0.00 -20.00
94 96.7
-3.49
-2.00 -40.00
22.75
-5.32 -4.00 -60.00
1 3 5 7 9 11 1 3 5 7 9 11 1
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2019 2020 2021 2015 2016 2017 2018 2019 2020
2018 2019 2020
Trade Balance (Bn USD) Export-g (%YoY)-rhs Target 30 T 100 T 110 T 120 T 140 T 190 T
Fintech Lending (Trillion IDR)

PMI Markit Indonesia Total investment (FDI+DDI)
In Trillion Rupiah Jan-18 Nov-18 Des-18 Jan-19 Nov-19
55
52.2 Des-19 Jan-20 Okt-20 Nov-20
50 826.3
809.6
146.25
137.66
124.40
45
117.82
88.37
40
81.50
75.71
74.54
69.82
63.86
35 721.3
26.00
22.67
22.44
21.85
19.84
19.62
19.06
16.52
12.67
11.67
10.68
3.56
30
3.05
3.00
2.54
2.58
0.42
27.5
25
2018 2019 2020 JAWA L UOUTSIDE

AR JAWA AGREGAT
AGGREGATE
JAVA ((TOTAL)
TOTAL)
JAVA
Source: Bloomberg, Bank Indonesia, BPS, BKPM, Financing Policy Committee for MSMEs, IHS Markit 23
Section 2
Institutional and Government Effectiveness:
Accelerated Reforms Agenda with
Institutional Improvement
Improving Global Perception
…with recent improvements on governance effectiveness
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 60
45 72
40 50 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- 160
90 term growth.
India Indonesia Philippines Bulgaria Colombia Indonesia India Philippines Bulgaria Colombia
Worldwide Governance Indicators3 Corruption Perception Index4
65 44
60 Higher score is better 43
53 42 42
55 41
51 41
40 40
45
42 38 38
38
35 37
36 36
28 36
25
34 34
Higher rank is better
15 32
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
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 2020 Update;
4. Source: Transparency International – Corruption Perceptions Index 2019 Report 25
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

26
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 December 2020, Rating Affirmed at BBB+/Stable
“The upgrade reflects the firm implementation of policies to strengthen economic growth “The ratings mainly reflect the country’s solid domestic demand-led economic growth
potential on the back of a solidified political foundation. As the global spread of the novel potential, restrained public debt, and resilience to external shocks supported by flexible
coronavirus could strain growth in the Indonesia economy, the government and the central exchange rate and monetary policies and accumulation of foreign exchange reserves.
bank are working to shore up the economy and maintain macroeconomic stability. Given the Additionally, the government has been maintaining the momentum of economic
country’s underlying economic strength which remains intact, R&I expects the economy to structural reforms even amid the pandemic, as evidenced by the enactment of the
start to recover if the epidemic is brought under control” "Omnibus Law on Job Creation".
27
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 HR

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

Achieving Sustainable Competitiveness of the Labour Force
4 Environmental Climate
Regulation
5
Developing Cultural Progress
Reflecting the Nation's Personality
3 Simplification Engaging in Mental Revolution
and Culture Development
Developing a Dignified and Trustworthy
6 Legal System Free from Corruption Strengthening Infrastructure to
Simplification of Support Economic Development
Protection of All Nations and
4 Bureaucracy and Improve Basic Services
7 Provision of Security to All
Citizens Conservation of Environment,
Supporting Climate Change, and
Attaining Good, Effective, and Enhancing Disaster Resilience
8 Economic
Reliable Governance 5 Transformation
Enhancing Political, Legal, Defense
Achieving Synergy of Governmental and Stability and Transforming
9 Framework with the Regional Public Services
Government
Source: National Development Planning Agency 28

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
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 &
BIG Among the 64.19 Complicated licensing

Of the total population aged 203.97 million people,
million MSEs, 64.13 issues with abundant
there are 14.28 people affected by Covid-19
F A C T
million are Micro & central & local regulations

1. Unemployment due to covid-19 (2,56 million people) MIDDLE
Small Businesses, (hyper-regulations) that
- 2. Not labor force due to Covid-19 (0,76 million people) most of which are in regulate the sector,
- 3. Temporarily not working due to Covid-19 (1,77 million SMALL causing disharmony,
the informal sector, so
people) it needs to be overlapping, non-
- 4. Work with shorter hours due to Covid-19 (24,03 MICRO encouraged to operational and sectoral.
million people) transform into formal
ones.
JOB CREATION LAW

1. IMPROVING INVESTMENT 2. BUSINESS LICENSING 3. LABOR 4. SUPPORTING MSMEs 5. EASE OF DOING BUSINESS 6. RESEARCH & INNOVATION
SUBSTANCE ECOSYSTEM
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 and Protecting Worker’s Rights through Benefits for the General Public,
Entrepreneurship through Ease of Doing Worker’s Protection including provision of housing and
Business from MSEs and Large redistribution of land
Enterprises
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

Development of Implementing Regulations
for the Job Creation Law
The government has completed 51 implementing Regulations

• The ministry immediately makes internal
regulations consisting of 47 government regulations and 4
implementation standards or guidelines no
presidential regulations later than 2 months after the implementing
regulations are enacted
The implementing regulations are grouped into 11
Public Communication
regulatory clusters, namely: Ministries / Institutions held intensive
1. Spatial (4) socialization in the form of electronic media and
2. Land and Land Rights (5) leaflets
3. Environment (1) Infrastructure and Supporting System
4. Construction and Housing (6) • OSS and Supporting System will be ready
5. Cooperatives and SMEs (4) for operation in July 2021
6. Investment (6) • Readiness of Ministries / Agencies and
7. Fiscal (3) Local Governments in providing networks,
8. Employment (4) tools, and consultations
9. Economic Zone (2)
10. Government Goods / Services (1) Human Resources
11. Licensing and Sector Business Activities (15) Training for OSS Operators and Supervisors

51 Regulations for Job Creation Law
(Substance Grouping)
Spatial Construction and Housing
1. Government Regulation No. 21 of 2021 concerning the 1. Government Regulation No. 12 of 2021 concerning Amendments
Implementation of Spatial Planning to Government Regulation No. 14 of 2016 concerning
2. Government Regulation No. 43 of 2021 concerning Settlement of Implementation of Housing and Settlement Areas
Inconsistencies in Spatial Planning, Forest Areas, Permits, and / or 2. Government Regulation No. 13 of 2021 concerning the
Land Rights Implementation of Flats
3. Government Regulation No. 45 of 2021 concerning the 3. Government Regulation No. 14 of 2021 concerning Amendments
Implementation of Geospatial Information to Government Regulation No. 22 of 2020 concerning
4. Presidential Regulation No. 11 of 2021 concerning Cooperation Implementation Regulations of Law No. 2 of 2017 concerning
between the Central Government and State-Owned Enterprises in Construction Services
Providing Basic Geospatial Information 4. Government Regulation No. 15 of 2021 concerning
Implementation Regulations of Law No. 6 of 2017 concerning
Architects
Land and Land Rights 5. Government Regulation No. 16 of 2021 concerning
Implementation Regulations of Law No. 28 of 2002 concerning
1. Government Regulation No. 18 of 2021 concerning Management Buildings
Rights, Land Rights, Apartment Units and Land Registration 6. Presidential Regulation No. 9 of 2021 concerning the Agency for
2. Government Regulation No. 19 of 2021 concerning Implementation the Acceleration of Housing Management
of Land Acquisition for Development for Public Interest
3. Government Regulation No. 20 of 2021 concerning Control of
Neglected Areas and Lands
4. Government Regulation No. 23 of 2021 concerning Forestry
Cooperatives and SMEs
Implementation 1. Government Regulation No. 34 of 2021 concerning the Use of
5. Government Regulation No. 24 of 2021 concerning Procedures for Foreign Workers
Imposing Administrative Sanctions and Procedures for Non-Tax State 2. Government Regulation No. 35 of 2021 concerning Specific Time
Revenues Derived from Administrative Fines in the Forestry Sector Work Agreements, Transfer, Working Hours and Breaks, and
Termination of Employment
Environment 3. Government Regulation No. 36 of 2021 concerning Wages
4. Government Regulation No. 37 of 2021 concerning the
1. Government Regulation No. 22 Year 2021 concerning Implementation of the Job Loss Guarantee Program
Implementation of Environmental Protection and Management

Investment Employment
1. Government Regulation No. 42 of 2021 concerning the Ease of 1. Government Regulation No. 34 of 2021 concerning the Use of
National Strategic Projects Foreign Workers
2. Government Regulation No. 44 of 2021 concerning 2. Government Regulation No. 35 of 2021 concerning Specific
Implementation of the Prohibition of Monopolistic Practices and Time Work Agreements, Transfer, Working Hours and Breaks,
Unfair Business Competition and Termination of Employment
3. Government Regulation No. 48 of 2021 concerning Third 3. Government Regulation No. 36 of 2021 concerning Wages
Amendment to Government Regulation No. 31 of 2013 4. Government Regulation No. 37 of 2021 concerning the
concerning Implementation Regulations of Law No. 6 of 2011 Implementation of the Job Loss Guarantee Program
concerning Immigration
4. Presidential Regulation No. 10 of 2021 concerning the
Investment Business Field
5. Government Regulation No. 73 of 2020 concerning Investment Economic Zone
Management Institutions2. 1. Government Regulation No. 40 of 2021 concerning the
6. Government Regulation No. 74 of 2020 concerning Authorized Implementation of Special Economic Zones
Capital for Management Institutions Investation 2. Government Regulation No. 41 of 2021 concerning the
Implementation of Free Trade Zones and Free Ports
Fiscal
1. Government Regulation No. 9 of 2021 concerning Tax
Treatment to Support Ease of Doing Business
2. Government Regulation No. 10 of 2021 concerning Regional
Government Goods / Services
Taxes and Regional Levies in the Framework of Supporting 1. Presidential Regulation No. 12 of 2021 concerning Amendments
Ease of Doing Business and Regional Services to Presidential Regulation No. 16 of 2018 concerning Government
3. Government Regulation No. 49 of 2021 concerning Taxation Procurement of Goods / Services
Treatment of Transactions Involving Investment Management
Institutions and / or Entities They Own

Licensing and Sector Business Activities

1. Government Regulation No. 5 of 2021 concerning 9. Government Regulation No. 31 of 2021 concerning
Implementation of Risk-Based Business Licensing the Implementation of the Shipping Sector
2. Government Regulation No. 6 of 2021 concerning the 10. Government Regulation No. 32 of 2021 concerning
Implementation of Business Licensing in Regions the Implementation of the Aviation Sector
Implementation of the Sector of Energy and Mineral the Implementation of the Railway Sector
Resources 12. Government Regulation No. 38 of 2021 concerning
4. Government Regulation No. 26 of 2021 concerning the Accompanying Accounts for Umrah Travel Expenses
Implementation of the Agricultural Sector 13. Government Regulation No. 39 Year 2021
5. Government Regulation No. 27 of 2021 concerning the concerning Implementation of the Halal Product
Implementation of the Marine and Fisheries Sector Guarantee Sector
Implementation of the Industrial Sector Post, Telecommunication and Broadcasting
Implementation of the Trade Sector the Implementation of Hospitalization
8. Government Regulation No. 30 of 2021 concerning
Implementation of the Road Traffic and Transportation
Sector

Government Supports in Job Creation Law
• Support for MSMEs: Business licensing for MSMEs is sufficient only through registration.
• Support for Cooperatives: easiness in establishing cooperatives by setting a minimum number of 9 people, and cooperatives can apply
Sharia business principles, and can take advantage of technology.
• On the continuity of community plantations in forest areas, the community is given permission (legality) for the use of land sustainability
in forest areas, where for community lands located in conservation areas, the community can still utilize plantation products with
government supervision.
• Better policy integration between obtaining business licencing and environmental impact assessment. Policy integration utilise risk based
approach, which makes it more uncomplicated to obtain Environmental Approval while still meeting the stipulated requirements.
• For Halal Certification: The government bears the cost of certification for MSEs, acceleration and certainty in the halal certification process,
as well as expanding the Halal Inspection Agency, which can be carried out by Islamic Organizations and State Universities.
• For Fishermen: Previously, the fishing boat licensing process had to go through several agencies, with the Job Creation Law, it was enough
only to be processed at the Ministry of Marine Affairs and Fisheries.
• For the provision of housing: the backlog of community housing and the construction of houses for Low-Income Communities (MBR) will
be accelerated, which is managed by the Agency for the Acceleration of Housing Management (BP3).
• The Land Bank will carry out agrarian reform and land redistribution to the community
• Businesses and MSMEs will receive benefits that include:
• Ease and certainty in obtaining business licenses, by implementing risk-based licensing & implementing standards.
• Proper rights and protection for workers/labour will increase competitiveness and productivity.
• Receive incentives and conveniences, both fiscal incentives and convenience and certainty of services for investment.
• Wider space of business activities for investment to be entered by referring to the business sectors that are prioritized by the
Government.
• Regarding the imposition of sanctions, administrative violations are only subject to administrative sanctions, while violations that
occur due to K3L (Safety, Security and Environment) are subject to criminal sanctions.

Investment Priority List in the Presidential Regulation for the
Investment Business Sector
The government provides positive sentiment to the business world by establishing policies for
regulating business sectors that are more open (positive) and priority.
PRESIDENTIAL REGULATION OF INVESTMENT BUSINESS FIELDS
246 PRIORITY 90 AREAS OF > 1700 OTHER

BUSINESS FIELDS BUSINESS FIELDS 46 BUSINESS FIELDS OPEN FIELDS OF
BUSINESS
given fiscal incentives and OR PARTNERSHIP WITH SPECIFIC
WITH COOPERATIONS REQUIREMENTS (domestic / foreign / joint
and non-fiscal, a.l. Tax venture) without
Allowance and Tax Holiday AND MSMEs
conditions
 With a positive approach, the Government provides assurance that in principle all business
fields are open to investment, which is declared closed by law. The investment value for
Mandatory PMA is> IDR 10 billion.
 This openness takes into account the protection and empowerment of MSMEs.
 The government also provides information on the direction of investment policy in Indonesia by
determining business fields that are the Government's priorities.

Indonesia Investment Authority (INA) as An Alternative Source
of Economic Development Financing
The government has established an Indonesia Investment Authority (INA) as alternative financing and provides legal certainty. Currently, all the
modalities are complete to run the Authority, such as regulation, the Supervisory Board and Board of Directors, and initial capital
PURPOSE
Target
a. Strong Institutions with Best Governance, To Get Global Investor Trust;
Target is USD 20
b. Integrate pockets of government investment that have been scattered in many places; billions. Government
Republic of Indonesia
c. Anticipating the need for infrastructure financing, especially those financed by short-term has committed to put
debt so that it can be shifted by financing from INA and long-term. USD 5 billions as
initial capital
CHARACTERISTICS AND ADVANTAGES OF INA

Focus on Capital A Strong Legal Strong Support From
Flexible Investment
Maximization Foundation for Certainty The State
Follows International Strong Independency and Balance Between Capable of Capturing
Business Practices Professional Economic and Investors Appetite
Management Commercial Benefits
• Govt. Regulation No. 73 of 2020 concerning Initial Capital for Indonesia Investment Authority (INA)
Legal • Govt. Regulation No. 74 of 2020 concerning Indonesia Investment Authority (INA)
Master Fund
Basis • Govt. Regulation No. 49 of 2021 concerning tax treatment of transactions involving INA and / or the
entities it owns
Top SWF in ASEAN with its total assets: Top SWF in Global with its total assets:
o GIC Private Limited  USD 453 millions o Norway Gov  USD 1,1 billions
Thematic Fund
o Temasek Holdings  USD 417 millions o China Inv. Co. USD 1 billion
o Khazanah Nasional Berhad  USD 20 millions o Abu Dhabi  USD 579 billions

Investment 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 (BKPM) 39
Investment Realization in 2020
DDI: Domestic Direct Investment

FDI: Foreign Direct Investment
*) The investment realization target for 2020 is based on the chairman of BKPM letter No. 102/A.1/2020 dated April 16th 2020 regarding the Proposed Revision of the
Investment Targets for 2020-2024 due to the Impact of Covid-19 and the letter from Ministry of National Development Planning of the Republic of Indonesia to The
Indonesia Investment Coordinating Board (BKPM) No. B.265/M.PPN/D1/PP.03.02/04/2020 dated April 24th 2020 regarding the Approval of the Proposed Revision of
Investment Target 2020-2024 due to the Impact of Covid-19.
**) Towards the 2020 investment realization target Q-4 2020 y-o-y q-o-q
 The investment realization figures of the fourth quarter of 2020 constitute the direct investment DDI 0.7% 0.8%
realization done for the three months period (October – December 2020) based on investment
realization report (LKPM) from the DDI and FDI companies. FDI 5.5% 4.6%
 Investment on Oil and Gas, Banking, Non-Bank Financial Institution, Insurance, Leasing, and Home TOTAL 3.1% 2.7%
Industry sectors are excluded.
 The investment value is in Trillion Rupiah (T), and US$ 1= Rp 14,400 based on 2020 National Budget Jan-Dec 2020 y-o-y
 The total investment realization of the fourth quarter of 2020 is Rp 214.7 T, 2.7 % increase from the DDI 7.0%
third quarter of 2020 (Rp 209.0 T) and 3.1 % increase from the fourth quarter of 2019 (Rp 208.3 T)
FDI -2.4%
 Investment realization in January – December 2020 is Rp 826.3 T, 2.1% increase from the previous
period in January – December 2019 (Rp 809.6 T) TOTAL 2.1%
(excluding the upstream oil and gas sector and financial services)
Top 5 Investors (by country) By Geography By Region

(in USD billion) IDR 68.8T West Java 120.4
in IDR Trillion
8.3% IDR 71.8T

IDR 51.3T
8.7% DKI Jakarta 95
(6.2%)
Singapore 9.8 East Java 78.3

34.1% IDR 200.7T
(24.3%) Banten 62
IDR 408.8T
China 4.8 (49.5%) IDR 24.8T Central Java 50.2
(3%)
16.7%
Others 420.4
Hongkong 3.5
12.1% By Sector
Japan 2.6 Others
IDR 337.3 T Transportation, Warehouse, and
9.1% (40.9%) Telecommunication
IDR 144.8 T (IDR.5%)
South Korea 1.8 Electricity, Gas, and Water Supply
6.3% IDR 102.0 T (1IDR3%)
Others 6.2 Basic Metal, Metal Goods, Non-

Machinery and Equipment Industry
21.7% IDR 94.8 T (11.5%)
Construction
IDR 71.0 T
Housing, Industrial Estates, and Office Building
(8.6%)
IDR 76.4 T (9.2%)

(excluding the upstream oil and gas sector and financial services)
Jan – Dec 2019 Jan – Dec 2020

Total : IDR 809.6 T Total : IDR 826.3 T
Outside Java
IDR 375.0 T Java Outside Java
(46.3%) IDR 434.6 T IDR 417.5 T Java
(53.7%) Realization y-o-y IDR 408.8 T
(50.5%)
Java -5.9% (49.5%)
Outside Java 11.3%
TOTAL 2.1%
Direct Investments
IDR tn 214.5
FDI DDI TOTAL
103.6
110.9
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 Q3 Q4
2013 2014 2015 2016 2017 2018 2019 2020

Potential Investment Realization Reaches IDR 708 T
Companies that had been facilitated:
IDR 708T ±IDR 410T 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)
IDR1.8T
Klaten, Central
PT Sumber
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

Enhancing Business License Service Standard
Presidential Regulation to Accelerate Ease of Doing Business implemented since 2014
Improve efficient, streamlined, Provide business licensing Overcome the barriers

& integrated business license process assurance in terms to doing business in
service standards of the costs and lead times Indonesia
Policy Goals
2 4 6
1 3 5
Accelerate the Increase coordination & Implement integrated
business licensing synergy between central & licensing process
process regional government (single submission)
1st Phase 2nd Phase

Forming a Task Force to Business license
identify & overcome the end- regulatory reforms
Main Policy
to-end licensing barriers
Implementing a licensing checklist Implementation of the

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

Note: 1st and 2nd Phase are implemented in parallel
Improving Investment Climate
…Bonded Logistic Center launched in 2016 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
implementation of the Food & Small and
medium
1 st Economic Policy Package, beverages
industry
industry
launched on March 2016 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 industry
substances)
the domestic industry, including Textile industry.
Heavy
(cotton)
small and medium Equipment
industry
industries; increase industry
Aircraft
investment; and to make Defence MRO
Indonesia to become a logistics industry industry
hub in Asia Pacific.

Online Single Submission (OSS) Has Been Launched in 2018
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
& Forestry & Housing Suitable for all
Sector Sector
Sector Sector category,
Marine & Medicine & Transportation Information &

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

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

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

…revision of the Negative Investment List in 2018
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 100%
Enterprises (MSMEs) 95% 33% 67% 51% 67%
Grandfather Law: If a particular

sector is tightened in future,
existing foreign investor does Professional Training, Golf Course Telecommunication Provider
not need to comply with tighter Management, Air Transport Support Services, Consultancy for Construction1 with Integrated Services
stake Travel Bureau
Before After Before After Before After
Strengthen implementation of
negative investment law through
active roles from ministries, 67% 67% 67%
49%
agencies and regional 55% 65%
governments
1 For total project value of IDR10bn and above

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 Budget reform as broadened
Largest Economy Populous country a part of larger from one
in South East in the World; economic reform reduce
Asia 64% in initiative dependency on
productive age commodities
Large and Consistent Fuel subsidies
Rising Middle Stable Budget Reform
significantly
reduced and
Manageable Class and Economy spending
Prudent debt
Inflation Rate Affluent management
redirected to
Customers
more productive
Reform-Oriented allocation
Administration
From commodity-based to Three main sources of financing for
manufacturing and investment needs: State and regional
service sectors via infrastructure budget, State Owned Enterprises and
PPP
development New High Continuing from 2015 policy,
From consumption-led to investment-
led growth via a stronger Economic Infrastructure infrastructure spending will be higher
than fuel subsidy
manufacturing sector and more Structure Investments
investment initiatives Infrastructure spending focused on
Policies to maintain purchasing power basic infrastructure projects
to stimulate domestic economy in the
Fiscal and non-fiscal incentives to
midst of weakening macroeconomic
attract infrastructure investment and
conditions
promote PPP
49
National Economic Growth Improved
Strong GDP Growth1 • National economic growth maintained recovery momentum in the fourth quarter of
2020. Based on data from BPS-Statistics Indonesia, economic growth in Indonesia
% recorded a shallower -2.19% (yoy) contraction in the fourth quarter of 2020,
QoQ YoY
improving from -3.49% (yoy) in the third quarter of 2020. A fourth-quarter
7.0
5.124.944.935.054.82 5.174.925.185.014.945.015.015.065.195.065.275.175.185.075.055.024.97 improvement was recorded across nearly all demand-side components and economic
4.744.77 5.05
5.0 4.21 4.20 sectors. Therefore, national economic growth in Indonesia contracted 2.07% in
3.83 3.74 4.01
3.27 3.31 4.01 2020. Looking forward, domestic economic growth, which improved through to the
3.14 3.19 3.09 3.06 2.97
3.0 end of 2020, is projected to gradually gain momentum in 2021. Bank Indonesia has
oriented its accommodative policy mix towards supporting the national economic
1.0 0.04 recovery, while strengthening synergy with the Government and other relevant
authorities.
-1.0 (0.16) (4.19) (0.42)
(0.36) (0.30) (0.41) (0.52) • Domestic economic improvements in the fourth quarter of 2020 were supported by
(3.49) stimulus realisation and a positive external sector contribution. Government
-3.0 (1.73) (1.81) (1.70) (1.69) (1.74)
(2.07) (2.41) (2.19)
(5.32)
consumption expanded 1.94% (yoy) in 2020 due to the realisation of government
-5.0 stimuli, dominated by social assistance disbursements, other goods and services
expenditure as well as regional transfers and village fund disbursements. Meanwhile,
-7.0 household consumption growth recorded a shallower -3.61% (yoy) contraction in the
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 fourth quarter of 2020 compared with -4.05% (yoy) in the previous period in
response to greater public mobility. Annually, household consumption contracted
2014 2015 2016 2017 2018 2019 2020 2.63%. Investment growth also experienced a slightly shallower -6.15% (yoy)
contraction in the reporting period compared with -6.48% (yoy) in the previous
Favourable GDP Growth Compared to Peers2 period, bringing the decline for the year in 2020 to negative 4.95%. On the other
hand, net exports enjoyed a positive position as export performance improved in line
% with economic recovery momentum in several of Indonesia's major export
10.00 8.80 destinations amidst comparatively subdued import performance.
7.40
• Most economic sectors recorded incremental gains in the fourth quarter of 2020.
5.00 6.10 Sectors associated with healthcare as well as work-from-home and school-from-home
activities continued to improve and maintained positive growth, including Information
Growth Prospect
and Communication as well as Health Services. In addition, Agriculture and
0.00 4.00 Education also recorded positive growth, while the Manufacturing Industry and Trade,
2021 GDP
accounting for large economic Institutions
contributions, improved to experience shallower
growth (%YoY)
contractions.
-5.00 2021 Budget 5.0
Bank Indonesia 4.3-5.3
-10.00 Bulgaria Colombia India
Indonesia Philippines IMF (WEO, Jan 2021) 4.8
-15.00 World Bank (Global Economic Prospects, Jan 2021) 4.4

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021*
ADB (ADOS Dec 2020) 4.5
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 (February 2021) 4.5 50
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 Q3 Q4 Tot
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 5.2 5 5.1 5.1 5.0 5.2 5.0 5.0 5.0 2.8 -5.5 -4.0 -3.6 -2.6
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 8.7 11 9.1 17.0 15.3 7.4 3.5 10.6 -5.0 -7.8 -2.0 -2.1 -4.3
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 5.3 8.2 1.0 0.5 3.3 3.8 -6.9 9.8 1.8 1.9
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 6.1 6.7 5.0 4.6 4.2 4.1 4.5 1.7 -8.6 -6.5 -6.2 -4.9
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 7.4 8.3 4.6 6.5 -1.5 -1.8 0.1 -0.4 -0.9 0.4 -12.0 -11.7 -7.2 -7.7
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 13 15 14 7.4 12 -6.5 -6.7 -8.3 -7.9 -7.4 -3.6 -18.3 -23.0 -13.5 -14.7
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 -3.5 -2.2 -2.1
GDP
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
Q3 Q4 Tot. Q4 Tot. Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Tot Q1 Q2 Q3 Q4 Tot Q1 Q2 Q3 Tot
Q1 Q2 Q1 Q2 Q3 . Q4
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 3.3 4.7 3.6 3.8 3.9 1.8 5.3 3.1 4.2 3.6 0.0 2.2 2.2 2.6 1.8
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 -4.3 -1.2 -2.0
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 -4.3 -3.1 -2.9
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 -4.5 -5.7 -3.3
Wholesale and Retail Trade, Repair of
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 5.2 5.3 4.4 5 5.2 4.6 4.4 4.2 4.6 1.6 -7.6 -5.0 -3.6 -3.7
Car and Motorcycle
Transportation and Storage 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 5.4 5.9 6.7 7.6 6.4 1.3 -30.8 -16.7 -13.4 -15.0
Information and communication 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 9.1 9.6 9.2 9.8 9.4 9.8 10.8 10.7 10.9 10.6
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 6.2 8.5 6.6 10.6 1.1 -0.9 2.4 3.2
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 -6.2 -1.4 -1.7 -1.2
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 -3.5 -2.2 -2.1
Source: Central Bureau of Statistics of Indonesia (BPS)

*Other services consist of 10 sectors (according to Standard National 2008) 51
Economic Performance Improved In Almost All Regions
REGIONAL GDP Q4-2020 (% YOY)
Source: Central Bureau of Statistics of Indonesia (BPS), calculated

52
Economic Performance in Most Sectors Starting to Improve
Most economic sectors recorded incremental gains in the fourth quarter of 2020. Sectors associated with healthcare as well as work-
from-home and school-from-home activities continued to improve and maintained positive growth, including Information and
Communication as well as Health Services. In addition, Agriculture and Education also recorded positive growth, while the
Manufacturing Industry and Trade, accounting for large economic contributions, improved to experience shallower contractions.
Indonesia's GDP Share (%)

% 100.0 1.99
2.63 2.16 2.49 2.49 3.15 3.57 3.85 4.06 3.24 4.14 4.40 4.61 4.11 3.26 3.51 3.50 4.26 3.64
90.0 17.55 17.64 17.88 18.03 18.20 18.64 18.66 18.47 18.35 18.49 18.52 18.33 19.37 18.68 19.08 18.82 19.10 19.86 19.22
80.0 3.46
3.49 3.72 3.88 3.86 4.03
3.73 3.60 3.61 4.19 4.20 4.15 4.34 4.10 4.18 4.24 4.70 4.44 4.32 4.51
3.57 3.50 3.52 3.95 4.34 4.57
70.0 3.57 3.53 3.63 3.93 3.62 3.78 3.77 3.89 3.95 3.96 4.25 4.66 4.56 4.51
4.42 5.02 4.04 4.57
5.20 5.41 5.38 5.53 5.57 5.54 5.57 5.17 3.58 4.40 4.47
13.61 5.63 4.68
13.46 13.21 13.21 13.43
60.0 13.30 12.83
13.19 13.02 13.02 13.19 12.95 12.98 13.01 13.20 12.83 12.93
12.95 12.85
50.0 9.13 9.09 9.35 9.49 9.86
10.21 10.38 10.38 10.53 10.76 10.37 10.60 10.56 10.60 10.71
11.26 10.75 10.70 10.96
40.0
22.04 21.76 21.45 21.03 21.08
30.0 20.99 20.52 20.16 19.86 20.07 19.52 19.62 19.70 19.86 19.86 19.88
19.63 19.98 19.81
20.0 10.46 11.81 11.61 11.01 6.28

9.83 7.65 7.18 7.58 8.08 7.77 7.39 6.95 7.26 6.16 6.44
6.98 6.82 6.48
10.0
13.93 13.51 13.37 13.36 13.34 13.49 13.48 13.16 12.81 12.65 13.57 13.44 12.71 12.84 15.45 14.68 11.97 13.70
11.19
-
2010 2011 2012 2013 2014 2015 2016 2017 2018 Q1-2019 Q2-2019 Q3-2019 Q4-2019 2019 Q1-2020 Q2-2020 Q3-2020 Q4-2020 2020
Taxes Other Services Financial and Insurance Services Information and Communication
Transportation and Warehousing Wholesale and Retail Trade Construction Manufacturing
Mining and Quarrying Agriculture, Forestry, and Fishery
Source: Central Bureau of Statistics of Indonesia (BPS), calculated 53

Stronger Fundamentals Facing the Headwinds
Inflation Rate (%) IDR Movement (%) Foreign Reserves (USD bn)
Inflation controlled within the target range IDR appreciated year-to-date Significantly higher than 1998 & 2008, ample to cover
10 months of import and external debt repayment
1998 -197
1998 82.4 1998 17.4
2008 -35
2008 12.1 2008 50.2
17 Feb
12-Oct-20 -5.56 0.21 (ytd)
Feb 2021
Sep-15 1.55
6.8 (yoy) 2021 Feb Sep-15
2021 138.0
-250 -200 -150 -100 -50 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
3.04
5.7
Dec 2020
August 2020 3.06
3.22
1998 2008 2020
Jul-15
0 5 10 15 20 25 30 35 40
External Debt (Public & Government Debt/GDP External Debt/GDP

Private) to FX Reserve Ratio Higher than 2008, but significantly
Consistently well-maintained
Significantly lower than 1998 crisis lower than 1998
8.6x 3.1x 3.07x 100.0% 27.4% 40,36% 116.8%

33.2% 39.4%
2008 Dec 2020 Q4-2020

2008 Jan 2021 2008
1998 1998
1998
54
Outlook of Domestic Economy Remains Robust
...domestic economic growth is predicted to rebound in 2021
2021 Economic Outlook

 Bank Indonesia projects economic growth in 2021 at the range 4.3-5.3%.
 Bank Indonesia projects Inflation in 2021 to remain under control and within the 3.0%±1% target corridor.
 Bank Indonesia projects the current account deficit at 1.0-2.0% of GDP in 2021, thereby supporting external sector resilience
in Indonesia.
 Bank Indonesia projects credit growth in 2021 will be around 5.0-7.0%
Economic Growth Inflation CAD (% of GDP) Credit Growth
2018
5.17% 3.13% 2.98% 11.75%
Realisation
2019
5.02% 2.72% 2.71% 6.08%
Realisation
2020
-2.07% 1.68% 0.4% -2.4%
Realisation
below
2021 4.3 - 5.3% 1.0 - 2.0 % 5.0 - 7.0%
3.0±1%
Source : Bank Indonesia

55
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 Current Account Continue Recorded Surplus in Q4-2020
2013: 2014: 2015: 2016: 2017: 2018: 2019: 2020:
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$4.7bn)
Current Account Capital and Financial Account US$bn
20 160 US$bn
Overall Balance Reserve Asset (rhs)
135.90 13 1.0
15 0.29
Current Account (%GDP) (rhs) Secondary Income
120 Primary Income Services 0.0
10 8
9.95
-1.0
5 3
0.80 80
0 1.43 -2.0
(0.91) -2
-5 (7.48) -3.0
(0.16) 40
-7
-10 -4.0
(3.10)
-15 0 -12 -5.0
Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4 Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4
2013 2014 2015 2016 2017 2018 2019* 2020** 2012 2013 2014 2015 2016 2017 2018 2019* 2020**
Source: Bank Indonesia Source: Bank Indonesia
Trade Balance Surplus Increases Official Reserve Assets Increased to Reinforce External Sector Resilience
US$bn
2013: 2014: 2015: 2016: 2017: 2018: 2019: 2020:
5.00 Deficit Deficit Surplus Surplus Surplus Deficit Deficit Surplus FX Reserves as of January 2021: US$138.0 bn
(US$4.10bn) (US$2.37bn) US$7.59bn US$8.83bn US$11.83bn (US$8.65bn) (US$3.24bn) (US$21.81bn)
4.00
(Equiv. to 10 months of imports + servicing of government debt)
US$bn FX Reserves (LHS) Month of Import & Debt Service (RHS) Month
3.00 2.63 130 15
14
2.00 120 13
12
1.96 110 11
1.00 10
100 9
0.00 90 8
7
80 6
-1.00 -0.67 5
70 4
-2.00 OG Non-OG Total 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 10 1
1 4 7 1 4 7 1 4 7 1 4 7 1 4 7 1 4 7 1 4 7 1
2013 2014 2015 2016 2017 2018 2019 2020 2021 10 10 10 10 10 10 10
* Preliminary Figure ** Very Preliminary Figure 2014 2015 2016 2017 2018 2019 2020 2020
Source: BPS Source: Bank Indonesia 57
Exchange Rate In Line with Fundamentals
Movement of Rupiah 17,000
a.o. 16 Feb'21 Supported by Bank Indonesia's stabilisation measures and
Quarterly Average 16,500 maintained foreign capital inflows to domestic financial markets, the
Monthly Average rupiah continues to appreciate. As of 17th February 2021, the rupiah
IDR/USD 16,000 strengthened 0.22% on average, or by 0.07% (ptp) on the January
15,711
14,673 2021 level. A surge of foreign capital inflows to domestic financial
14893 15,500
15,179 markets in line with lower global financial market uncertainty and the
14,53014,806
14,381 14,708 positive perception of investors towards the promising domestic
15,000
14,220 14,232 economic outlook have fed through to a stronger rupiah. Looking
14254 14,113 14339 14012
14120 13,714 14,855 14,500 ahead, Bank Indonesia still expects the rupiah to regain lost value as
14,201 the currency is fundamentally undervalued, supported by a narrow
14669 14,000 current account deficit, low and stable inflation, attractive domestic
14134 14,105 14,122 13925
14064 14219 14,023
14,141 financial assets for investment, a lower risk premium in Indonesia as
14,031 14,006 13,500
13,992 well as abundant global liquidity. In addition, Bank Indonesia will
13,000 continue to strengthen rupiah exchange rate stabilisation policy in line
with the currency's fundamental value and market mechanisms
8-Nov
6-Aug
9-Sep
18-Jan
27-Jan
19-Mar
18-May
27-Feb
7-Jun
27-Jun
17-Jul
5-Oct
13-Jan
13-Mar
12-May
22-Apr
21-Jun
11-Jul
31-Jul
22-Feb
1-Jun
16-Feb
9-Dec
29-Dec
7-Feb
28-Apr
8-Apr
4-Dec
24-Dec
2-Feb
18-Dec
7-Jan
2-Apr
26-Aug
25-Oct
14-Nov
20-Aug
29-Sep
19-Oct
28-Nov
15-Sep
through effective monetary operations and by providing market

liquidity.
Rupiah Exchange Rate Fared Relatively Well Compared to Peers Rupiah Exchange Rate Volatilty
JPY -1.23
-1.38 28.5 %30
KRW 1.01
-1.26 25.38
EUR -0.54 Dec-20
-0.82 Feb 2021 vs Jan 2021 25
1.02 22.5 Jan-21
BRL -0.47 point-to-point Average 21.4
SGD 0.05 Feb-21
-0.29 18.02 20
MYR 0.09 17.1
15.22 a.o 17 Feb 2021
-0.24
PHP -0.64
-0.03
-0.25 ao 17-Feb-21 12.8 15
THB 0.14 12.1
CNY -0.45
0.17 3.7 6.5
IDR 0.07 8.85 10
0.22 7.6 8.1
0.25 7.1
INR 6.4 6.4
0.32 5.20
5.1 5.38 5.425.7
ZAR 3.06 2.65 4.62
2.33 2.9 3.26
2.8 3.5 5
TRY 4.47 2.0 1.5
4.55
%
-2.00 -1.00 0.00 1.00 2.00 3.00 4.00 5.00 -
Source: Reuters, Bloomberg (calculated) BRL ZAR TRY IDR KRW THB MYR INR SGD PHP 58
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 January 2021: US$138.0 bn
Swap Arrangement
 Renewed a 3 year USD22.76 billion swap line with Japan on October 14th, 2018
Japan  The facility is available in USD and JPY
South Korea  Renewed a 3 year KRW / IDR swap arrangement with the size of up to KRW 10.7 trillion / IDR 115 trillion in March 2020
Bilateral
Australia  Renewed a 3 year A$/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 2020
 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
Chiang Mai  Entitled to a maximum swap amount of US$ 22.76 bn under the ASEAN+3 (Japan, China, and Korea) FX reserves pool
Initiative created under the 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
Global
 Indonesia is entitled to access IMF facilities for crisis prevention to address potential (actual) BOP problem
Financial Safety
 Such facilities include Flexible Credit Line (FCL) and Precautionary and Liquidity Line (PLL)
Net - GSFN
Source: Bank Indonesia 59
Healthy External Debt Profile
External Debt Structure The Structure of External Debt is Dominated by Long-Term Debt
Private External Debt Public External Debt Short Term External Debt
100% 100%
80% 80%
50.1
60%
60% 84.4
40%
49.9
40%
20%
0%
20%
15.6
Apr 2020*
May 2020*
Aug 2020*
Sep 2020*
2016
2018
Oct 2020*
2009
2010
2011
2012
2013
2014
2015
2017
Q1-2019*
Q2-2019*
Q3-2019*
Q4-2019*
Jul 2020*
Mar 2020*
Jun 2020*
Nov 2020*
Jan 2020*
Dec 2020**
Feb 2020*
0%
May 2020*
Aug 2020*
Sep 2020*
Jul 2020*
Oct 2020*
2017
2009
2010
2011
2012
2013
2014
2015
2016
2018
Q1-2019*
Q2-2019*
Q3-2019*
Q4-2019*
Nov 2020*
Jan 2020*
Dec 2020**
Feb 2020*
Mar 2020*
Apr 2020*
Jun 2020*
External Debt Remains Manageable External Debt to GDP Ratio & Debt to Export Ratio
Million USD % % %
450,000 External Debt External Debt (rhs) 20.0 39.4
17.1 37.3 38.1
18.0 240 36.1 36.0 36.7 36.5 36.1 36.1 40
400,000 34.3 34.7 34.5
31.8 32.9
350,000 16.0 220 35
29.1
14.0 27.4
300,000 11.5 11.312.0 200 26.5
25.0 215.2 30
10.2 10.1 9.9 10.2 12.0 207.3
250,000 180 197.7 25
Axis Title
8.0 7.5 10.0 183.3
200,000 6.5 160 176.1 177.0 177.8 20
5.4 5.9 8.0 168.4 168.6172.2168.4172.0
150,000 5.0
3.8 3.4 6.0 140 15
100,000 3.0 External Debt/ Export Ratio (rhs)
4.0 120 139.5 10
50,000 0.6 2.0 121.8 123.1
100 114.9 113.8 External Debt/ GDP Ratio 5
0 0.0 101.0
80 0
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Q1-2019*
Q2-2019*
Q3-2019*
Q4-2019*
Q1-2020*
Q2-2020*
Q3-2020*
Q4-2020**
Source: Bank Indonesia, External Debt Statistics of Indonesia *Provisional Figures **Very Provisional Figures 60
Manageable External Debt Profile
Short term non-bank corporate debt (non affiliation) represents only 9.8% of total private external debt
Public Long Term 1 Private Bank
US$209.2bn US$157.2bn US$19.0bn Affiliation

or or or
50.1% 75.5% 9.1% US$11.7bn
of Total Ext. of Private Ext. of Private or
Debt Debt Ext. Debt 5.6%
External Debt
of Private
Position
Ext. Debt
US$208.3bn US$51.1bn US$32.1bn

or or or
US$417.5bn 49.9% 24.5% 62.7%
of total of Private of Private
Ext. Debt Ext. Debt Ext. Debt
Private US$20.3bn
Short-Term1 Non-Bank or
Private 9.8%
of Private
External Debt Position as of December 2020 Ext. Debt
1 Based on remaining maturity
Non Affiliation
Source: External Debt Statistics of Indonesia, February 2021
61
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 93.9 230
76.2 corporates 157
24.2 (9.2%) corporates
Philippines 24.7
22.2 (6.3%)
36.3
Indonesia 35.3
36.1
48.7
Colombia
42.7
53 2021F
≤ 3 months > 3 - 6 months
2020F
53.6
2019 2,257 2,330
Bulgaria 56.6
56.3 corporates corporates
(90.8%) (93.7%)
0 20 40 60 80 100
Source: Moody’s Credit View Fundamental Data, July 2020

Liquidity Ratio*
Regulation on Prudential Principle in Managing External Debt
294 corporates
Phase 1 Phase 2 Phase 3
Regulation Key Points Jan 1,2015 – Jan 1,2016 – Jan 1, 2017 (11.8%)
Dec 31,2015 Dec 31,2016 & beyond
Object of Regulation Governs all Foreign Currency Debt
Hedging Ratio
< 3 months 20%* 25%**
2,193
> 3 – 6 months 20%* 25%** corporates
Liquidity Ratio (< 3 months) 50% 70% (88.2%)
Credit Rating Not applicable Minimum rating of BB-
Must be done
Hedging transaction to meet not necessarily be done with a
with a bank in
hedge ratio bank in Indonesia
Indonesia Comply Not Comply
Sanction As of Q IV-2015 Applied *Data as of Q2 2020, with total population 2..487 corporates
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 Gov’t Securities Crisis Management Protocol (CMP)
at the time of financial crisis in the form of Financial  Indicators:
System Stability Committee (KSSK) - 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  Policies to address the crisis at every level :
Deposit Insurance Corporation - Repurchase the government securities at secondary market
- Postpone or stop the issuance
Swap facility arrangements based on international

Bond Stabilization Framework
cooperation First Line of Defense
Buyback fund at DG of Budget
State’s Budget Financing and Risk Management
Investment fund at Public Service
Enhancing coordination between government Agency (BLU) (min. level Aware)
institutions and continuous dialogue with market State Owned Enterprises
participants (BUMN)’s Budget Related SOEs (min. level Aware)
Social Security
Organizing Agency BPJS (min. level Aware)
(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)
Source: Ministry of Finance 63

Section 5
Fiscal Performance and Flexibility:
Strong Commitment in Maintaining Fiscal Credibility
2021 ECONOMIC RECOVERY WILL BE STRENGTHEN
2020 2021
STRENGTHENING PANDEMIC
Achievement HANDLING & ECONOMIC
RECOVERY
Indonesia is taking a big but measured
steps to handle the pandemic
Overcoming the spread of Covid-19, protecting the Priority policies will Mass vaccination
purchasing power of poor and vulnerable people,
maintaining the sustainability of the business world, continue Strengthening 3M & 3T
including MSMEs
Optimizing PEN program
Supported by synergy between
institutions and all elements of the Nation
Government, legislative institutions, law enforcement Indonesia is optimistic, but remains vigilant that
officers, KSSK, private sector, and society
the pandemic can be controlled and socio-
Indonesia's economic and fiscal pressures economic activities will continue to recover
are better than many other countries
Indonesia's economic contraction and widening fiscal “We all have to be optimistic that the beginning of 2021
deficit and debt were relatively moderate compared
to many other countries will be a turning point for the pandemic problem."
(President RI's remarks at the annual meeting of the financial services industry, 15 Jan '21).
65
STATE BUDGET IS CRUCIAL TO CONTAIN THE IMPACT OF COVID-19
State Budget plays critical role as countercyclical instrument in avoiding the deeper economic
contraction
Indonesia Economic Growth (%, yoy) State Budget Continue To Strive in 2021
2017 2018 2019 State Budget

2020 2021 Allocation Growth
5.1 2021
5.2 5.0 Realization (as of Feb 22 (%)
5.0 (interim) 2021)
Q1 2020
State Budget Rp2,589.9 T Rp2,750.0 T 6.2
2.97
National Economic Recovery
Covid-19 Program (PEN) Rp579.8 T Rp699.43 T 20.6
Pandemic
Health Rp63.5 T Rp176.3 T 177.6
Q4 2020 Social Protection Rp 220.4 T Rp157.4 T -28.6
-2.19 MSMEs Support &
Rp 173.2 T Rp186.8 T 7.9
Corporation Financing
Q2 2020
Business Incentives Rp 56.1 T Rp53.9 T -3.9
-5.32 Q3 2020
Priority Program Rp 66.6 T Rp125.1 T 87.8
1.2% -3.49
Deficit (% to GDP) 6.09% 5.70%
3.2%
• Through the widening of the 2020 state budget deficit to 6.1% of GDP, the
realization of state expenditure of IDR 2,589.9 trillion, including the
realization of PEN, IDR 579.8 trillion government role prevent a deeper
economic contraction due to the 2020 pandemic.
State Budget & PEN
• In 2021, state budget and fiscal policy will continue its role as a srive to
66 support national economic recovery
66
STATE BUDGET SUPPORTS THE 2020 ECONOMY THROUGH
GOVERNMENT CONSUMPTION, HOUSEHOLD CONSUMPTION, AND
PUBLIC INVESTMENT
THE ROLE OF GOVERNMENT EXPENDITURE IN Expansion of social protection Household

PROMOTING ECONOMIC RECOVERY spending in cash includes PKH, Consumption
incentives for pre-employment card, Continues to
Initial Realization 2020 cash social assistance, and groceries Strengthen
State Budget Expenditure IDR2,589.9 T
(94.55%)
Government consumption
National Economic Recovery IDR579.78 T expenditure includes MSME Government
(PEN) (83.4% )
support, personnel expenditure, Consumption
Health IDR63.5 T operational goods expenditure, and Grows Positively
Social Assistance IDR220.4 T government assistance
Support for MSMEs IDR112.4 T
Business Incentives IDR56.1 T
Government capital expenditures
Public
include building health facilities,
Sectoral and Local Government Investment
Support
IDR66.6 T procurement of PSN land,
remains
procurement of defense and security
Corporate Financing IDR60.7 T promoted
equipment, construction of irrigation
Deficit 6.09% of GDP
67
THE 2020 SOCIAL PROTECTION PROGRAM IS ESCALATED TO MITIGATE
THE NEGATIVE IMPACT OF COVID-19 PANDEMIC
Ministry of Finance estimation shows that Social Protection is able to maintain the consumption of the poor and vulnerable groups
Simulation of Changes in Household Expenditure Due to Covid-19 and Social Protection

15%  The poor and vulnerable people (the poorest
10.9%
10% 7.8% 50%) have the most benefits.
6.8% 5.9% 5.1%
5%
4.0%
2.3%
 The Social Protection (Perlinsos) program
0.1% 1.9% 1.5% 1.2% 0.7% reaches up to the affected middle class
-1.4% -1.9% -2.5%
0% -3.0%
-5.5% population (for example, wage assistance, pre-
-6.2% -6.5% -6.5%
-5%
-3.6%
employment cards, and internet quota
-10% -6.8% -7.7% -7.8% -7.6% -7.6%
subsidies)
-8.2% -7.8% -8.1% -8.1%
-15%  Without the PEN program, poverty is expected
10% 2 3 4 5 6 7 8 9 10% to escalate even further by 2020
Termiskin
Poores Terkaya
Richest
10%
 The middle and rich classes (group of 10% to
Perubahan
Changes inPengeluaran Karena
spending due Covid-19
to Covid-19 Changes inPengeluaran
Perubahan spending due to Social
Karena Perlinsos 6th and above) tend to hold back consumption,
Net Perubahan Pengeluaran RT
Net Changes in Household spending Assistance due to limited mobility. Third Party Funds (DPK)
in banking grew to reach 10.9%
Source: BKF calculations, for the realization of various 2020 Perlinsos programs
Note: a) simulations are carried out on the growth of nominal household consumption in 2020 using Susenas 2019. b) distribution of the Perlinsos Program is carried out based on beneficiaries in Susenas
PKH 10 mio Sembako Card Non PKH Basic Food Cash PKH Participants Rice
Realization Beneficiaries 19,4 mio Benficiaries Assistance 9 mio Beneficiaries Aid 10 mio Beneficiaries
Jabodetabek Wage Assistance Wage Subsidy Assistance for
of PEN & Food Aid 2,2
mio
12.4 mio employees non-permanent teachers 2,6
Internet Quota Subsidy
51 Juta Beneficiaries
mio teachers
Social Beneficiaries
Non Jabodetabek Village Fund Cash Pre Employment Card
Electricity Discount
Cash Social Direct Assistance 5,6 mio beneficiaries
Protection Assistance 9,2 mio 8 mio penerima 32,1 mio
households
Beneficiaries
68
2020 APBN SUPPORTS MSMEs SURVIVALS THROUGH VARIOUS
ASSISTANCE PROGRAMS
The government spends IDR112.44T to support

the sustainability of MSMEs through interest Fund Placement Interest subsidy
subsidies, credit distribution through fund IDR66.75 T IDR12.83 T
placement, Micro Business President Assistance Total Credit Rp315.51 T For 19.1 million Debtors
(BPUM), Final Income Tax exemption and For 4.7 million debtors
investment financing through LPDB.
37 million MSMEs received at least one Banpres for Micro Credit Guarantee
government aid. Business Actors IDR2.09 T
(BPUM) IDR28.8 T • Accumulated working
Grant IDR 2.4 million / capital credit: IDR19.32 T
Debtors who receive interest subsidies and business for 12 million • Total working capital
debt restructuring benefit from loosening cash businesses credit debtors: 923.67
flows and reducing NPL risk. Thousand
Surveys conducted by LPEM-LD FEBUI, BRI Investment Financing

Final Income Tax for
Institute, LIPI and ITB show that MSMEs can LPDB IDR 1.29 T
UMKM IDR0.67 T
survive thanks to government assistance. For 63 cooperative
For 248,275 Tax Payers
partners
Most of the beneficiaries used PEN funds for and 101,011 MSMEs
working capital (buying raw materials).
69
TAX INCENTIVE HAS SUPPORTED THE BUSSINESS RESILIENCE
Tax incentives has been utilized and has supported The tax payers most affected by pandemic has
464,316 tax payers dominated the incentives utilization
Incentive to improve 131,889 Employers

people purchasing Construction
power Govt’ Trade Manufacturing
borne
47% 19% 7%
income tax
*apart from MSME incentives (58% of trade sector)
Incentives to
support business Income Tax Reduction Accelerated The Majority of eligible sectors have utilized the
liquidity and Exemption on Tax Tax Refund
continuity
on Import Installment
incentives
14,941 66,682 2,529
 Government-  Reduction of Tax
Borne Income 90% Installment 86%
Tax
Incentive to  Income Tax  Accelerated Tax
support the
Final
248,275 MSMEs Exemption on 72% Refund 43%
MSMEs Income Tax Import
for MSMEs
70
ECONOMIC RECOVERY POLICY FRAMEWORK 2021
1 HEALTH
•
•
Free Vaccination  for 185.55 million people to achieve herd immunity
Encouraging 3M 3T
INTERVENTION
• Other intervention  Health facilities, Health Protective Equipment
Social Protection Programme

For bottom 40 and the vulnerable group:
3 STRUCTURAL
PKH, Sembako card, BST, BLT DD, Pre REFORM
employment, electricity discount, internet Through the Job Creation Law
subsidy to address various challenges of
2 SURVIVAL AND
national development
(providing employment
RECOVERY KIT
opportunities, empowering
MSMEs, regulatory reform, SWF
Maintaining Business Continuity
• Support for SMEs and cooperation development, Ease of Doing
• Priority programs to support job Business, etc.)
creation
NATIONAL ECONOMIC RECOVERY
71
STRATEGIC POLICY DIRECTION TO MAINTAIN RECOVERY MOMENTUM
Acceleration on vaccination and pandemic handling, and strengthening economic boost program
SCHEDULE ON VACCINE DELIVERY Vaccination progress in many countries

(22 Feb 2021, in million doses)
2nd WAVE : APR 2021-MAR World 205
1st WAVE : JAN-APR 2021
Vaccination & 2022 63.09
strengthening 3T and 3M PUBLIC
REST OF
(2) China 40.5
OFFICERS THE
HEALTH POPULATION 26.53
to handle the pandemic WORKERS 17.4 mil
VULNERABLE
(5) India 11.09
Population in
and as fundamental base areas with
Cluster approach 6.63
Vaccination in ELDERLY according to (8) Turky 6.59
for solid economic 34 provinces Will be delivered
highest risk of
vaccine 5.55
virus
recovery after receiving
safety notice for transmission
availability (18)… 1.96
1.3 mil elderly age 0.26
63.9 mil 77.4 mil (49)… 0.1
21.5 mil
Source: Bloomberg Vaccine Tracker, selected countries
1st Semester 2021 2nd Semester 2 2021

Maintain the recovery trend to positive zone Business in stronger recovery phase and becoming
PEN Program & Bussines growth engine for sustainable economic
Stimulus Packages to • Continuing the existing incentive program for • Targeted support for business particularly
support the economic business, including incentive in MoF Regulation for in potential sector which become
recovery and anticipate 9/2021 which apply until June, 30 2021 economic recovery driver
pandemic pressure • Integrated Policy Package KSSK to increase • Improving the Integrated Policy Package
business financing in order to accelerate Effectiveness to support business
economic recovery expansion
72
GAIN RECOVERY MOMENTUM WITH EXPANSIVE YET CONSOLIDATIVE
FISCAL POLICY IN 2021
Also continue to address the Covid-19 pandemic issues, while pursuing a sustainable development goals
Macroeconomic Development Indicator

Assumption Target
Indonesia's economic growth is projected to return to its
The overall fiscal policies are expected to support the
medium-term growth trajectory, while anticipate the uncertainty
achievement of development targets in 2021
in global economic recovery
Budget Budget
Economic Growth (%) 5.0 Unemployment Rate

7.7 – 9.1
(%)
Inflation (%, yoy) 3.0
Poverty Rate (%) 9.2 – 9.7
Exchange Rate (Rp/US$) 14,600
10 years Government
Gini Ratio (index) 0.377 – 0.379
Securities Rate (%)
7.29
Human Development
Index
72.78 – 72.95
ICP (US$/barrel) 45
Oil Lifting (rbph) 705 Farmer Terms of Trade 102-104
Fisherman Terms of
Gas Lifting (rbsmph) 1,007 Trade
102-104
73
2021 BUDGET IS A CRITICAL TOOL TO DRIVE THE ECONONOMY AMIDST
UNCERTAINTY
Comprehensively designed to support the acceleration of economic recovery and address Covid-19 pandemic
2020 2021 STATE REVENUE POLICY

Account • Supporting national economic recovery by
(IDR T) Perpres Realization State Growth* providing tax incentives selectively and prudently
72/2020 (Unaudited) Budget (%) calculated
• Cutting the red tape to accelerate national
economic recovery
Revenue 1,699.9 1,633.6 1,743.6 6.7
• Improving public services to optimize non-tax
Tax Revenue 1,198.8 1,070.0 1,444.5 35.0 revenue
Customs & Excise 213.5 212.8 215 1.0 EXPENDITURE FOCUS
Non Tax Revenue 409.0 338.5 298.2 -11.9 • Handling COVID-19 and supporting health
Grant 1.3 12.3 0.9 -92.7 programs
• Continuing social safety net to lay a solid
Expenditure 2,739.2 2,589.9 2,750.0 6.2 foundation of inclusive economic recovery
Central Government Expenditure 1,975.2 1,827.4 1,954.5 7.0 • Expanding access to capital for MSMEs and
cooperatives through interest subsidy
• Supporting programs activities for impacted
Regional Transfer & Village Funds 763.9 762.5 795.5 4.3 sectors (e.g. Tourism)
Primary Balance (700.4) (642.2) (633.1) -1.4
FINANCING STRATEGY
Surplus (Deficit) (1,039.2) (956.3) (1,006.4) 5.2
• Supporting the restructuring of SOEs, PSA, Sovereign
% to GDP (6.3) (6,09) (5.70) Wealth Fund (SWF)
Financing 1,039.2 1,190.9 1,006.4 -15.5 • Increasing access to financing for MSMEs and
* Based on 2020 realization
housing for low-income household
• Continuing to support higher education,, research
and cultural activities
74
THE PEN PROGRAM AS THE KEY INSTRUMENTS FOR COVID-19 HANDLING
Evidence of the government's commitment to accelerate the economic recovery
Projected Allocation for PEN 2021 IDR 699.43 T* (2020 PEN Realization at IDR 579.78 T)*
HEALTH SOCIAL PRIORITY MSMEs SUPPORT BUSINESS

Rp176.30 T PROTECTION PROGRAMS & CORPORATION
FINANCING INCENTIVES
Rp157.41 T Rp125.06 T Rp53.86 T
Sectoral and Regional Rp186.81 T
2020 : IDR63.51 T 2020 : IDR220.39 T Government 2020 : IDR66.59 T 2020 : IDR173.17 T 2020 : IDR56.12 T*
1. The COVID-19 vaccine 1. PKH 10 million 1. Government-Borne

1. KUR and non- KUR
2. Medical Facilities and beneficiaries (KPM) 1. Tourism Supports Income Tax
interest subsidy
Infrastructure 2. Food Security/Food 2. Income Tax Exemption on
2. Basic Food/SEMBAKO 2. Loss Limit Guarantee for Import
3. Health Care Claim Costs Estate
Card MSMEs 3. VAT Refund
4. Medical Personnel 3. ICT Development
3. Pre-Employment Card & Corporation 4. Government-Borne
Incentives and death 4. Loan to Regions
4. Cash Transfer - Village 3. guarantee services (IJP) of Income Tax for MSMEs
compensation 5. Labor Intensive Program
Fund MSMEs 5. Reduction of Tax
5. Reserve BPJS 6. Industrial Area and cooperatives
Contribution Assistance 5. Cash Social Assistance 7. Other Priority Programs 4. Electrical Assistance 6.
Insent
Installment
Corporate income tax
for PBPU / BP 10 million KPM
6. Health tax incentives
5. Other PEN Programs tariff reduction
6. Internet Subsidy
(including VAT and 6. Placement of Funds 7. VAT not-
import duty incentives
7. Electricity Discount 7. PMN to SOEs carrying out Rp141,36 T
collected/exempted
for vaccine purchases) assignments (HK, ITDC, (Bonded Zone/KITE)
Pelindo III, KIW) 8. Import duty incentives
*) The 2021 figure includes additional proposals. The 2020 figure is a temporary realization/unaudited.
75
SEVEN AREAS TO BE STRENGTHENED THROUGH REFORMS
In order to thrive together and transform the economy
1 EDUCATION 2 HEALTH 3 SOCIAL PROTECTION
 Going digital;  Strengthening health sector’ facilities  Improving program effectivity (data
 Strengthening teacher quality; and human resources; accuracy, synergy between programs)
 Simplifying curriculum;  Improving national health security  Social security system covering all life
 Global standard for measurement; program; cycle;
 Link and match;  Strenthening health security  Adaptive Social safety net.
 Strenthening public and private roles in preparedness;
education.  Integrated health system.
BUREAUCRATIC BUDGETING DATA

4 INFRASTRUCTURE 5 REFORM 6 REFORM 7 STRENGTHENING
 Improving basic infrastructure  System improvement:  Budget efficiency for basic
for human capital  Going digital for public function of the government; Improving accuracy,
development; services;  Focus on priority programs reliability and data
 Improving the quality of  Simplifying process; (Zero based budgeting); integration
infrastructure to support  Improving human capacity:  Synergy between central and
 Consistent reward &
economic transformation and local governments
Punishment;
strengthening cometitiveness;  Result-based budgeting
 Pension reform
76
THE STATE BUDGET BECOME THE PRIME MOVER FOR THE ECONOMY
The realization as of January 2021 is still conserved, spending acceleration to support the continuation of PEN
and the first batch of the vaccination programme
2020 2021 State revenue realization was

Account mainly supported by customs
Realizatio Realizatio
(IDR T) % of Perpres and excise performance;
n as of 31 Growth (%) Budget n as of 31 % of Budget Growth (%)
72/2020 (excise tax policy and
Jan 2020 Jan 2021
increased exports align with
Revenue 105.1 6.2 (3.3) 1,743.6 100.1 5.7 (4.8) rising commodity prices).
Tax Revenue 80.8 6.7 (6.1) 1,229.6 68.5 5.6 (15.3) Meanwhile, taxation and non-
tax revenue are still under
Customs & Excise 4.5 2.2 16.0 215.0 12.5 5.8 175.3 pressure due to economic
activity and oil prices that had
Non Tax Revenue 19.7 6.7 5.8 298.2 19.1 6.4 (2.9) not fully recovered.
Grant 0.1 7.3 25.1 0.9 0.0 0.5 (94.8) The expenditure grew
positively, mainly driven by
Expenditure 139.9 5.1 (9.1) 2,750.0 145.8 5.3 4.2 capital expenditures to
Central Government Expenditure 71.5 3.6 (6.1) 1,954.5 94.7 4.8 32.4
support infrastructure
development and social
Regional Transfer & Village assistance to protect the
68.4 9.0 (12.0) 795.5 51.1 6.4 (25.3)
Funds community.
Primary Balance (12.2) 1.7 (44.8) (633.1) (21.0) 3.3 72.3 Budget deficit reached IDR45.7
T (0.26% to GDP).
Surplus (Deficit) (34.8) 3.3 (23.0) (1,006.4) (45.7) 4.5 31.5
Budget financing is still on
% to GDP (0.23) (5.70) (0.26) track, supported by positive
sentiment in the financial
Financing 68.9 6.6 (44.3) 1,006.4 165.9 16.5 140.7
market, capital flows, and
SiLPA (SiKPA) 34.1 - - - 120.2 - - foreign investment.
77
2021 Budget Financing

2021 Financing Needs
Financing Needs Financing Sources

Budget Deficit Foreign
Domestic Debt
Denominated Debt
2021 15-20%
80-85%
Foreign
IDR1,006.4 T Foreign
Loan
Denomina-
Domestic
Loan
Domestic
GS
ted Bonds
(5.7% of GDP)
GROSS GS
(Through auction & non-
2021
o Investment financing auction)
Matured
o Lending T-Bills
GDS Sukuk Issuance
o Liabilities
68-73% 27-32%
o Other financing
o Matured debt
*GS: Government Securities

2021 Financing Strategy
Opportunistic, Measured, and Prudent Financing Strategies to support counter cyclical policies

Government Securities Indicative Financing Plan for 2021
Auction:
• Conventional Securities – 24x
• Islamic Securities – 24x
Non – Auction
• Retail GDS (tradable/ORI & non tradable), Retail Sovereign
Sukuk (tradable/sukri & non-tradable)
• Private Placement – based on request
Government GS Rupiah
Auction
Securities Domestic [80% - 85%]
Issuance [85% - 88%] Non Auction

Composition International [4% - 6%]
[12% - 15%]
Foreign *GS: Government Securities
Denominated GS
• Foreign denominated GS as complementary ( avoid crowding

out in domestic market)
• The target amount can be adjust to the potential of other
financing sources and financing needs
Synergy Between Central Bank and the Government
in Accelerating National Economic Recovery
The Enactment of Emergency Law No. 1/2020 (becoming Law No. 2/2020) allows Central Bank to buy GS in the primary market
1st Joint Decree between Minister of Finance and Governor of Bank

Realization of Gov’t Securities purchased by Bank Indonesia
Indonesia (BI) on April 16, 2020 (SKB I)
under SKB I IDR 75,855 tn
The role of BI is as backstop buyer in the primary market
COVID-19 HANDLING ALLOCATION
2nd Joint Decree between Minister of Finance and Governor of BI on July IDR 903,46 T
7, 2020 amended with Joint Decree on July 20, 2020 (SKB II)
Health
IDR 87.55 T
Burden Sharing Scheme
Public
Social Protection
Covered by BI with Issuance specifically to Goods IDR 203.90 T
1. Public Goods rate based on BI BI through private IDR 397.56T
Reverse repo 3M placement Sectoral K/L, LocalGovt
IDR 106.11 T
2. Non-Public Covered by Government Micro small andMedium
with rate BI Reverse repo Enterprises (MSME)
Goods: 3M minus 1%, and BI Issuance through IDR 123.46 T
 MSME covered the remaining market mechanism Non-Public Goods
difference with market IDR 505.90T
 Corporation (auction, Green Shoe Corporation Non-MSME
rate Option, Private
on-MSME IDR 53.57 T
Placement according
Full Covered by to the SKB on April Others
3. Non-Public Government amounting 16, 2020) IDR 328.87T
Goods: Others market rate
• SBN purchased by BI (SKB II) for Public Goods IDR397,56T or 100% from
target and issuance of SBN for Non Public Goods reach IDR177,03T (100%).
• Non-Public Goods : Others, refer to all issuance (incl: auction, private
placement, retail, and foreign denominated GS.
Government Securities Financing Realisation
(a.o January 29,2021)
(Trillion IDR)
Realization
(ao. Jan 29, 2021)
Government Securities (GS) Nett 167.74
Government Securities (GS) 183.47
GS Nett Government Debt Securities (GDS) 147.97
IDR Denominated GDS 88.00
- Coupon GDS 74.35
- Conventional T-Bills 6.65
- Private Placement 7.00
- Retail Bonds 0.00
Foreign Denominated Bonds 59.97
- SEC USD-EUR REG SHELF TAKE-DOWN 59.97
- Samurai Bond 0.00
Government - SEC USD REG SHELF TAKE-DOWN 0.00
Securities - USD Onshore Bonds 0.00
Sovereign Sharia Securities (Sukuk) 35.50
Domestic Sovereign Sharia Securitoes 35.50
- IFR/PBS/T-Bills Sukuk (Islamic Fixed Rate Bond/Project Based Sukuk 32.00
SUKUK
- Retail Sukuk 0.00
- Private Placement 3.50
GDS Global Sukuk 0.00
83
Source: Ministry of Finance
Republic of Indonesia - Dual Currency US$3bio and EUR1bio
Issuer Republic of Indonesia Investor Breakdown by Investor Type

Issuer Rating Baa2 Moody’s (Stable)
BBB S&P (Neg)
BBB Fitch (Stable)
Exp. Issue Rating Baa2 Moody’s / BBB S&P / BBB Fitch
Format SEC Registered RIEUR033
3 RI0351
Issue Senior unsecured fixed rate notes off US SEC Shelf
Pricing Date January 5, 2021
Settlement Date January 12, 2021 RI0371
RI0331
Currency USD Euro
Size US$1.25bio US$1.25bio US$0.5bio €1bio
Tenor Long 10-year Long 30-year Long 50-year Long 12-year
Maturity March 12, 2031 March 12, 2051 March 12, 2071 March 12, 2033
Coupon (p.a.) 1.850% 3.050% 3.350% 1.100% Investor Breakdown by Geography

Yield 1.900% 3.100% 3.400% 1.174
Price 99.538% 99.020% 98.794% 99.165%
Listing Singapore, Frankfurt Stock Exchange
RIEUR0333 RI0351
Use of Proceeds The net proceeds are for general purposes of the Republic of Indonesia,
including its Covid-19 relief efforts
Transaction Highlights
• The lowest yields and coupons throughout the issuance of Indonesian Global
Bonds for all tenors and currencies
• All tranches priced inside of the Republic’s existing credit curve with negative new RI0331 RI0371
issue premium and at the tightest levels for every one of the tranches
• The transaction was well-executed and competitively priced, with final pricing
across all tranches pricing 45bps inside of initial price guidance for USD and
40bps inside of initial price guidance for EUR
GS Primary Market Performance 2020 - 2021
Through Auction
In 2021, average incoming bid = IDR57.42 tn/auction while average awarded bid = IDR28.25 tn/auction
[IDR
Trillion] Incoming Bids Awarded Bids % Bid to Cover Ratio (RHS)
400 7.00
6.50 Average
Average Awarded
350 Incoming Bid 2020 = 6.00
Bid 2020 = IDR15.85T
IDR54.50T /auction
300 /auction
5.14 5.00
250 4.24
3.91 3.85 4.00
200
3.14 3.35
3.01
3.00
2.95
150 2.45
2.16 2.03 2.00
100 1.98
50 1.00
- -

Ownership of IDR Tradable Government Securities
(a.o January 29,2021)
(IDR tn)
Description Dec-17 Dec-18 Dec-19 Dec-20 Jan 29,2021
Banks* 491.61 23.41% 481.33 20.32% 581.37 21.12% 1375.567 35.54% 1,507.76 36.78%
Govt Institutions (Bank Indonesia**) 141.83 6.75% 253.47 10.70% 262.49 9.54% 454.3606 11.74% 378.09 10.91%
Govt Institution
Bank Indonesia (gross) 179.84 8.56% 217.36 9.18% 273.21 9.93% 874.875562 22.60% 906.08 22.67%
BANK GS used for Monetary Operation 38.01 1.81% -36.11 -1.52% 10.72 0.39% 420.514938 10.86% 528.00 11.76%
Non-Banks 1,466.33 69.83% 1,633.65 68.98% 1,908.88 69.34% 2,040.83 52.72% 2,086.15 52.31%
NON-BANK Mutual Funds 104 4.95% 118.63 5.01% 130.86 4.75% 161.321131 4.17% 166.17 4.08%
Insurance Company and Pension Fund 348.86 16.61% 414.47 17.50% 471.67 17.13% 542.817373 14.02% 557.70 14.06%
Foreign Holders 836.15 39.82% 893.25 37.71% 1,061.86 38.57% 973.91 25.16% 987.32 24.75%
Foreign Govt's & Central Banks 146.88 6.99% 163.76 6.91% 194.45 7.06% 178.3111 4.61% 233.76 5.79%
MUTUAL FUND
INSURANCE &
Individual 59.84 2.85% 73.07 3.09% 81.17 2.95% 131.210288 3.39% 139.19 3.47%
PENSION FUND
Others 117.48 5.60% 134.22 5.67% 163.32 5.93% 231.572274 5.98% 235.77 5.95%
FOREIGN
Total 2,099.77 100% 2,368.45 100% 2,752.74 100% 3,870.76 100% 3,972.00 100%
INDIVIDUAL
OTHERS on January 24, 2020, foreign Portion of foreign ownership
holders reach a record high in the mid & long term
in nominal terms. sector (≥ 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.

Disciplined and Sophisticated Debt Portfolio Management
Stable Debt to GDP Ratio Over the Years Prudent Fiscal Deficit
IDR Tn Government Debt / GDP (%)
38.68% 40,36% 500 442 446.3 0.0%
407 414.52
6,000 40% 362
852.9 849.6 400
30.23% 35% -0.5%
5,000 29.40% 30.10% 300
27.43% 28.33%
24.74% 764.5 30%
200 -1.0%
4,000 810.7
746.2 25%
100
3,000 734.8 20% 19 14 -1.5%
755.1 5,221.7 5,383.6 0
677.6 15% -4 (20) (9)
2,000 4,014.8 -100 -1.8% (35) -2.0%
3,248.6 3,612.7 -58 -69 (56) (66)
2,780.6 10%
1,000 2,410.0 -200
1,931.2 5% -2.2% -2.5%
-300
0 0% -2.5% -2.5% (269)
-2.6%-298 (308)
2014 2015 2016 2017 2018 2019 Des Jan-21* -400 (341) (349) -3.0%
2020* 2015 2016 2017 2018 2019
Bond Loan Debt/GDP Ratio [RHS] GS Nett Loan Nett
Non-Debt Surplus (Deficit) Budget
Weighted Average Debt Maturity of ~8.7 Years Well Diversified Across Different Currencies
% of Yearly Issuance
9.75 100% 1% 1% 1% 1% 1% 1%
7% 6% 6% 5% 5% 5%
4% 4% 4% 5% 5% 5%
9.39
80% 23% 22%
9.13 31% 29% 30% 27%
60%
8.68 8.7
8.52 8.47 40%
8.37 66% 67%
57% 59% 58% 62%
20%
0%
2016 2017 2018 2019 2020 Jan-21
2014 2015 2016 2017 2018 2019 2020 44197

Jan-21 IDR USD EUR JPY OTHER
Well Balanced Maturity Profile with Strong Resilience
Against External Shocks
Interest Rate Risks Declining Exchange Rate Risks
25.0 50.0
21.0 21.0 21.17 43.4 44.6
20.7 42.6 41.3 41.0
19.2 19.7
20.0 37.9
17.5 40.0
16.1 33.53 33.49
14.8 14.17
15.0 13.7 13.29 30.0
12.1
10.6 10.6
9.8
10.0 20.0
12.2 12.1 12.1 12.2 13.2 13.51
10.7 11.4
10.0
5.0
0.0
0.0
2014 2015 2016 2017 2018 2019 2020 Jan-21
2014 2015 2016 2017 2018 2019 2020 Jan-21
FX to GDP Ratio FX Proportion
VR Proportion Refixing Proportion
Debt Maturity Profile Upcoming Maturities (Next 5 Years)

IDR tn
45.0
40.4 41.0
600 39.3 39.59 39.03
40.0
500 36.0
IDR Denominated (Triliun Rp) 33.9 34.7
35.0
400 Other Currencies (Triliun Rp)
300 30.0
25.0 25.5 24.3
200 25.0 22.7 22.8 22.51
21.4
20.1
100 20.0
- 15.0
9.9 10.6
7.7 8.4 8.1 7.84 8.69
10.0 6.5
5.0
0.0
2014 2015 2016 2017 2018 2019 2020 Jan-21
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
25.2% 24.9%
38.2% 37.5% 39.8% 37.7% 38.6% 36.0% 34.8% 33.5% 33.9%
37.0% 38.6%
44.7%
39.3% 37.2%
34.1%
39.0% 37.4% 35.6% 36.8%
35.8% 35.4%
37.8% 39.9% 36.8% 42.0% 40.3% 39.8%
37.7% 38.6%
38.2% 37.5%
25.2%
24.9%
35.5% 38.0% 17.3% 22.0% 22.1% 22.0%

17.8%
18.4%
23.9% 22.5% 23.4% 21.1%
20.3% 11.8%
5.3% 5.1% 6.7% 4.0% 3.6%
1.3% 1.9%
3.2% 3.5% 5.0% 4.3% 2.4% 4.6% 5.1%
Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 Dec-20 Jan-21 Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 Dec-20 Jan-21
0-1 >1-2
Foreign Holders Domestic Non -Banks Domestic Banks >2-5 >5-10
>10 % Foreign Ownership of Total

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 The “Nine Agenda Priorities” of the
Sustainable Development Goals (“SDG”) in order to 2009 based on the concept of sustainable President’s priority actions. Shifting to
achieve the 2030 development agenda introduced by development, prevention, precaution and a a low-carbon and climate-resilient
the UN. Through Presidential Regulation No. 59/2017 “polluter pays” principle. To better address development path is an integral part
relating to the implementation of SDGs in Indonesia, environmental issues, the Ministry of Environment of this mission and is integrated in
the National and the Ministry of Forestry were merged to development policies, strategies and
Development Planning Agency was instructed to become the Ministry of Environment and Forestry programs
present a roadmap to implement the SDGs in October 2014
Indonesia’s Environmental Commitment andObjectives
Mitigation Adaptation Biodiversity

• Adopted the National Action Plan for Greenhouse Gas • National Action Plan on Climate Change Adaptation: • Indonesia is an archipelago made up of
Emission Reduction in 2011. National framework for adaptation initiatives 17,504 islands with unique ecosystems
• Focuses on reducing greenhouse gas emission through a mainstreamed into the National containing a large number of diverse
National Determined Contribution with an unconditional Development Plan. species.
reduction target of 29% by 2030 compared to the 2010 • Medium Term Development Plan 2020-2024 (RPJMN): • Indonesian Biodiversity Strategy and
baseline. An additional 12% reduction is conditional on reflects Indonesia’s strong commitment to shift to a low Action Plan 2015-2020: launched to
technology transfer, capacity building, results for payment carbon development based approach to economic provide an outline on how biodiversity
and access to finance. development and a more climate resilient path. Includes could be utilized sustainably to improve
• Environmental Fund Management Agency (BPLDH): key priorities such as renewable energy and energy economic and development
established in October 2019 with the vision to create a efficient development, forest conservation and opportunities.
trusted institution to attract national and international reforestation, waste management, land intensification,
donors as well as effectively mobilize public and private food security as well as governance and
fund in order to support protection programmes. institutionalization of investment and regulation.
Source: Green Sukuk Report 2020, Bank Indonesia, Ministry of Finance

91
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 Ministry of Finance
Sukuk Review and approval The Green Bond and Green Sukuk will prepare and
process by Ministry proceeds will be credited to a publish a Green
Eligible Green of Finance and designated account of relevant Bond and Green
Projects must National ministries for funding exclusive projects Sukuk annual report
fall into one of Development as previously defined. Allocation is on the list of
the nine eligible Planning Agency managed by Ministry of Finance. projects, amounts
sectors of proceeds
Line Ministries allocated to such
The line ministries utilizing the projects and
proceeds shall track, monitor and estimation of
report to Ministry of Finance, on the beneficial impacts
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

92
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)
93
Indonesia’s Green Initiatives: Financing Green Projects
Development of Indonesia’s Green Projects Financing
The Republic of Indonesia has issued two sovereign global Indonesia has continued to develop the Green market through the introduction of the first
Green Sukuk, consecutively in February 2018 and 2019, with Retail Green Sukuk in the world (Savings Retail Sukuk, ST006) in November 2019. The ST006
the total amount of USD 2 Billion is an investment instrument based on Sharia principles issued and sold to individual
Indonesian citizens in the domestic market with an online platform. Allocation and impact
2019 Issuance 2018 Issuance
of the Retail Green Sukuk is not included in the Green Sukuk Issuance Allocation and Impact
USD 750 million USD 1.25 billion Report issued in February 2020
(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
94
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)
95
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
Refinance 2017 USD39.62 mil -
Projects
Target Impact / In order to achieve 48,000,000 tonnes

134,872.41 tonnes of CO2e -
Emissions Reduction target set in RAN-GRK
(2017)
• Planning, Development and Supervision of • Construction of Flood Control • Improvement of Municipal Solid Waste
New, Renewable Energy and Energy Facilities (Financing) Management System (Refinancing)
Conservation Infrastructure (Refinancing and
Financing)
Construction of retention Improvement of basic waste management
Construction of new and renewable energy ponds/polders, flood canals, dikes, infrastructure services through the development
infrastructure, with a focus on areas outside checkdam, and river maintenance of city, regional and special area-scale of final
current electricity coverage. The project aims and normalization. It aims to reduce disposal sites.
Project Examples to improve the electrification ratio in off-grid the risk of flooding due to increased Locations: All provinces except East Kalimantan
Financed / Refinanced areas across the country. Power generation is rainfall intensity and land use
sourced from solar, mini hydro, and micro changes. • Improvement of Municipal Solid Waste
hydro power plants*. Management System (Financing)
Locations: West Java, Central Java,
Locations spread across 19 provinces in 2017 Yogyakarta, North Sumatera, West Improvement of basic waste management
(Refinancing) and the 2019 development of Sumatera, South Sulawesi, Maluku, infrastructure services through the development
such infrastructure are spread across all Bali of city, regional and special area-scale of final
provinces (Financing) 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
96
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 • Construction and • Installation of Navigation Facilities (Refinancing)

Train (Refinancing) Management of Double
Track Railways Construction, rehabilitation and replacement of marine navigation aids and the
Construction of double-double track of Infrastructure and installation of solar cells to power marine navigation aids. The shift towards
the Jabodetabek urban railway Supporting Facilities solar powered marine navigation aids reduces the use of fossil-fuel sources of
network. (Refinancing and power.
Locations: Jabodetabek (Jakarta, Financing) Locations: spread across 21 provinces in 2017
Bogor, Depok, Tangerang, Bekasi)
The construction of the • Improvement of Land Transportation Traffic Management System
• Construction and Management of double track railway (Refinancing)
Railways Infrastructure and project in the Trans Java
Project Examples Financed /
Supporting Facilities in Sumatera railway’s northern section, Installation of road traffic equipment such as traffic signs, area traffic control
Refinanced in 2019
(Refinancing and Financing) upgrading the single-track systems (ATCS) and navigation aids for river and take crossings (SBNP) with
railway. energy-saving sensors.
Construction of the Trans Sumatera Locations: Jabodetabek Locations: Jakarta, West Java, Central Java, Yogyakarta, East Java
Railway from Aceh to Lampung (Jakarta, Bogor, Depok,
province. The Trans Sumatera Railway Tangerang, Bekasi) • Construction, Rehabilitation and Maintenance of Airport Infra-structures
causes a mode shift from road (Refinancing)
transport to rail transport and logistics
Locations: Aceh, North Sumatera, West The installation of solar-powered street lights and solar power plants. It
Sumatera and South Sumatera improves the energy efficiency of airports and ensure electricity is sourced
from renewable sources
Locations: spread across 30 provinces in 2017
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
97
Section 7
Monetary and Financial Factor:
Credible Monetary Policy Track Record
and Favourable Financial Sector
Bank Indonesia’s Policy Mix 2020
Synergy to Build Economic Recovery Optimism
l Maintaining accommodative monetary policy

stance (lowering policy rate 125bps in 2020).
l Maintaining rupiah exchange rate stabilisation l Implementing Macro prudential
policy in line with the currency's fundamental Intermediation Ratio (RIM)
value and market mechanisms. l Implementing Macro prudential
2
Strengthening the monetary operations strategy Liquidity Buffer (MLB)
1
l
to reinforce the accommodative monetary
policy stance. Macro-
l Focusing on the quantity channel by providing Monetary prudential
liquidity to stimulate economic recovery Policy Policy l Electronification: Social
program, e-payment for
Government
3
l Controlling inflation thru Inflation Control l Financial technology
Team in national and regional level. l National Payment Gateway
l Supporting the 2020 state budget through (NPG)
SBN purchases in the primary market in line Payment
with Act No. 2/2020, while maintaining
Coordination l QRIS (QR Indonesia
System Standard)
macroeconomic stability. with other
Policy
Authorities l Expanding National Clearing
Supporting national economic recovery
4
l System (SKNBI) services
5
program thru Burden Sharing Scheme with
the MOF
l Promoting lower lending rates through close Financial Market l Developing market instruments for
supervision and public communication in Deepening financing infrastructure
coordination with OJK.
l Developing financial market infrastructures
l Strengthening policy coordination with the
Government and Financial System Stability l Rupiah Interest Rate Swaps (IRS) and
Committee to maintain macroeconomic and Overnight Index Swap (OIS)
financial system stability. l Domestic non-Deliverable Forward (DNDF)
l Developing the Commercial Papers (Surat
Source: Bank Indonesia Berharga Komersial)
99
Bank Indonesia Policy Mix: February 2021
The BI Board of Governors agreed 17th and 18th February 2021 to lower the BI 7-day Reverse Repo Rate by 25 bps to
3.50%, Deposit Facility (DF) rate by 25 bps to 2.75% and Lending Facility (LF) rate by 25 bps to 4.25%.
• Facilitating trade and investment promotion for

productive sectors and tourism as well as
socialising the use of local currency settlement
Publishing the (LCS) domestically and internationally in
“Assessment of conjunction with other relevant institutions and
Strengthenin Maintaining Policy Rate stakeholders.
g the rupiah Relaxing down Transmission to • Supporting development of an inclusive and
monetary exchange payment Prime Lending efficient digital economy and finance
Lower
operations rate requirements Rates in the ecosystem, specifically targeting SMEs, to drive
BI7DRR to
strategy to stabilisation on automotive Banking Industry" the economic recovery by;
3.50% to
reinforce policy in loans/financing to accelerate • Extending the QRIS 0% merchant discount
support
the line with the and Relaxing monetary policy rate (MDR) for micro enterprises until 31st
national
accommoda currency's the LTV/FTV transmission and Dec 2021;
economic
-tive fundamental ratio on expand the • Expanding QRIS acceptance to 12 million
recovery
monetary value and housing dissemination of merchants in collaboration with payment
policy market loans/financing information to system service providers as well as the
stance; mechanisms; corporate and central and local government;
individual • Encouraging collaboration between e-
consumers. commerce, SMEs and the Government to
strengthen the competitiveness of domestic
SME products for the domestic and export100
Strengthened Monetary Expansion and Fiscal Synergy
PRINCIPLES OF FUNDING AND BURDEN SHARING • Commencing in 2020, Bank Indonesia has injected liquidity
through quantitative easing to the banking industry
totalling Rp750.38 trillion (4.86% of GDP), consisting of
Rp726.57 trillion in 2020 and Rp23.81 trillion in 2021 (as of
16th February 2021)
• Synergy between monetary expansion and fiscal stimuli
has been strengthened through SBN purchases by Bank
Indonesia in the primary market
• After making purchases in the primary market totalling
Rp473.42 trillion to fund the 2020 State Budget, Bank
Indonesia is continuing to purchase SBN in the primary
market in 2021 to help fund the 2021 State Budget through
mechanisms pursuant to the Joint Decree issued by the
Minister of Finance and Governor of Bank Indonesia on
16th April 2020, which was subsequently extended on 11th
December 2020 until 31st December 2021
• As of 16th February 2021, Bank Indonesia has purchased
SBN worth Rp40.77 trillion in 2021 in the primary market,
including Rp18.16 trillion through private placement and
Rp22.61 trillion through greenshoe options (GSO)

101
Further Strengthening of an Accommodative Bank Indonesia’s Policy Mix
BGM 19-20 FEB, 2 BGM 17-18 JUNE BGM 18-19 AUGUST 2020
BGM 13-14 APRIL
MAR, AND 18-19 2020 AND 15-16 BGM 16-17 SEPTEMBER 2020
AND 18-19 MAY
MAR 2020 JULY 2020
2020
1. Lower BI7DRR by 25 bps 1. Hold BI7DRR at 4,00%
1. Hold the BI 7-Day Reverse 1. Lower BI7DRR to 4,00%, 25
in February to 4,75%,
Lower/Hol Repo Rate at 4.50% for bps in June and 25 bps in July 2. Focusing on the quantity channel by providing liquidity to
and other 25 bps in
dBI 7-day external stability & stimulate 2. Maintaining Rupiah exchange stimulate economic recovery, including supporting
March to 4,50%
Reverse growth rate stabilization policy in line Government in accelerating 2020 state budget realization
2. Lower a 50bps of daily
Repo Rate 2. Strengthening the intensity with the currency's 3. Maintaining rupiah stabilization policy in line with
rupiah reserve fundamental value & market mechanisms
of triple intervention policy fundamental value and
requirement (RR) for 4. Strengthening MO strategy in order to accelerate monetary
3. Providing liquidity for the market mechanisms
the banks engaged in policy transmission
Stabilization export-import financing, banking industry on 3. Providing reserve
Of The restructuring MSME loans requirement remuneration of 5. Accelerating money market and foreign exchange market
and expanding rupiah deepening through infrastructure development, including ETP
Rupiah and ultra-micro with formal 1.5% per year for banks
RR cut for SME & CCP
loans meeting daily and average
3. Lower Foreign Exchange 6. Lowering the minimum limit of DP on green automotive
4. Lower the rupiah RR ratios rupiah reserve requirements
Reserve Requirement loans/financing from 5-10% to 0%, in compliance with
4. Strengthening a synergized
Money from 8% to 4% by 200bps for conventional
expansive monetary policy prudential principles
Market & 4. Rupiah accounts commercial banks and by
response with accelerated 7. Extending the 50bps lower on rupiah reserve requirements, as
Foreign (vostro) of foreign 50bps for Islamic banks
fiscal stimuli from the an incentive for banks disbursing loans to SMEs and for
Exchange investors as underlying 5. Strengthening Monetary
operations and Islamic Government: export-import activity and to non-SMEs operating in priority
of DNDF
financial market deepening  firmly committed to sectors as stipulated in the PEN, from 31 Dec’ 20 previously
5. Domestic custodian until 30 Jun’21;
through FLisBI, PaSBI and funding the APBN 2020
bank for global investors
Quantitative 6. Triple intervention: SiPA through SBN purchases in 8. Accelerating development of money market instruments to
Easing spot, DNDF, & 6. Relaxing the additional the primary market to support corporate and SME financing in line with the national
demand deposit obligations finance the budgets for economic recovery program
purchasing SBN in the 9. Strengthening synergy with the banking industry, FinTech,
on the MIR healthcare, social
secondary market Government and relevant authorities to accelerate
7. Raised the MLB by 200bps protections, sectoral
7. Daily FX swap auction digitalization, amongst others, by supporting SME
Macro- for conventional commercial government ministries and
and Repo auction of SBN digitalization and the Made in Indonesia National Movement
Prudential banks and by 50bps for agencies & local
8. Liquidity injection (GERNAS BBI), and promoting the use of QRIS for e-commerce
Policy Islamic banks government
through monetary
8. Increasing the non-cash  Burden sharing with the 10. Expanding QRIS acceptance to bolster economic recovery and
operation accelerate SME by extending 0% MDR for micro-businesses
payment instruments uptake Government to accelerate
9. Relaxation of Macro- from 30 Sept’20 previously until 31 Dec’20
9. Strengthening policy mix MSME and corporate
prudential
Payment and coordination with the sector recoveries 11. Strengthening policy implementation to stimulate SMEs
Intermediation Ratio
System Government & other 5. Expediting payment system through corporatization, increasing capacity, access to finance
10. QRIS campaign to SME,
Policy authorities digitalization to hasten the as well as digitalization in line with Gernas BBI
traditional markets, 12. Strengthening the digital economy & finance ecosystem
10.Accelerating digital economy and finance
students and worship through the use of digital payment instruments &
implementation of digital implementation as part of the
BGM: places
economic recovery efforts collaboration between the banking industry, FinTech & e-
Board of Governor Meeting 11. Lower SKNBI cost economy & finance
Source: Bank Indonesia commerce to support PEN 102
Further Strengthening of an Accommodative Bank Indonesia’s Policy Mix
BGM 16-17 DECMBER 2020 BGM 20-21 JANUARY 2021

BGM 18-19 NOVEMBER
2020
1. Hold BI7DRR at 3,75% % for maintain external 1. Hold the BI 7-Day Reverse Repo Rate at 3.75%, while also
1. BI7DRR lower 25 bps at 3,75% for stability and inflation is predicted to remain low maintaining the Deposit Facility (DF) rates at 3.00% and Lending
maintain external stability and inflation 2. Maintaining rupiah stabilization policy in line with Facility (LF) rates at 4.50%.
Lowe/Hol is predicted to remain low 2. Maintaining rupiah exchange rate stabilisation policy in line
dBI 7-day fundamental value & market mechanisms
2. Focusing on the quantity channel by with the currency's fundamental value and market mechanisms.
Reverse providing liquidity to stimulate 3. Strengthening MO strategy in order to accelerate
monetary policy 3. Strengthening the monetary operations strategy in order to
Repo Rate economic recovery, including
reinforce the accommodative monetary policy stance.
supporting Government in accelerating 4. Strengthening accommodative macroprudential
2020 state budget realization policy to stimulate growth of loans allocated to 4. Accelerating money market deepening by strengthening JISDOR
3. Maintaining rupiah stabilization policy priority sectors towards national economic as a rupiah reference rate against the US dollar in order to
Stabilization in line with fundamental value & recovery, while maintaining financial system increase domestic foreign exchange market credibility and
Of The market mechanisms resilience support exchange rate stability in Indonesia. BI has
Rupiah 4. Strengthening MO strategy to
5. Promoting lower lending rates through close strengthened JISDOR in terms of the methodology, transaction
accelerate MP transmission monitoring period and publication schedule.
5. Accelerate the deepening of the supervision and public communication in
coordination with the Indonesian Financial Services 5. Strengthening accommodative macroprudential policy to
development of the foreign exchange
Money market and the domestic financial Authority (OJK) in terms of interest rate stimulate growth of loans/financing allocated to priority sectors
Market & market through the implementation of transparency in the banking industry towards national economic recovery.
Foreign BPPU 2025 6. Strengthening money market deepening by 6. Promoting lending rate transparency in the banking industry in
Exchange 6. Maintain a CCB ratio of 0%, RIM 84- expanding underlying DNDF to boost liquidity and order to accelerate monetary and macroprudential policy
94%, PLM 6% as well as 6% repo reinforce JISDOR as a reference for exchange rate transmission.
flexibility and LTF / FTV ratio for 7. Strengthening coordinated and integrated bank supervision
setting in forex market
property loans. between Bank Indonesia, the Indonesian Financial Services
7. Strengthening integrated bank supervision
Quantitative 7. Strengthening macroprudential policy
Authority (OJK) and Deposit Insurance Corporation (LPS) to
to stimulate inclusive financing, in coordination between BI, OJK and LPS to maintain
Easing maintain financial system stability.
particular for small and medium financial system stability
enterprises (SMEs) 8. Accelerating digital transformation & synergy to 8. Strengthening payment system policy and rupiah currency
8. Strengthening payment system strengthen economic recovery momentum with management to establish a digital economy and finance
digitalization in order to build economic robust payment system policy and faster ecosystem in order to accelerate the economic recovery by:
Macro- recovery momentum through several implementation of BSPI’25 a. Applying an integrated and collaborative strategy to expand
Prudential digital transformation initiatives,
9. Extending the 0% MDR on QRIS transactions for QRIS acceptance to 12 million merchants, while developing
Policy including: expanding access to digital QRIS features, such as transfers, withdrawals and deposits,
financial economy services for SMEs & micro enterprises until 31/3/2021
10. Strengthening and expanding electronification and in order to boost public QRIS acceptance.
public, collaboration between banks &
fintech; promoting broader acceptance digitalization centrally and regionally b. Implementing payment system regulatory reforms in
of digital payments through the QRIS 11. Promoting technology innovation, utilization & accordance with Bank Indonesia Regulation (PBI) No.
Payment 9. Reducing service fees for the BI-RTGS, 22/23/PBI/2020 through industry restructuring, license
collaboration between the banking & FinTech
System Extending the period of lower service reclassification, ownership, technological innovation,
industries through faster implementation of
Policy fees for the SKNBI, & lower payment including data and information, as well as strengthening
Sandbox 2.0, encompassing, i.g: the regulatory
limit and late payment fees for CC supervision, including cyber risk management.
sandbox, industrial tests, innovation lab & start-ups
BGM:
Board of Governor Meeting
Stable Monetary Environment Despite Challenges
Well Maintained Inflation Ensured Price Stability Strengthened Monetary Policy Framework
20 10 (%)
CPI (%, yoy) rhs 8.00 19 August 2016
8 The New Monetary
15 Core (%, yoy) - lhs Operation Framework
7.00
Volatile Food (%, yoy) - lhs2 LF Rate: 7.00
6
Administered (%, yoy) - lhs BI Rate: 6.50
10 6.00
4
LF Rate: 4.25
5 1.55 5.00
2.822
1.56 BI 7Day RR Rate: 3.50
4.00
0 0.34 0
DF Rate: 2.75
3.00
Rupiah Exchange Rate Fared Relatively Well Compared to Peers *) Credit Growth Profile
YTD 2021 vs 2020
BRL -3.59 20.0 % yoy
-4.52
JPY -2.63
2.42
KRW -1.92 15.0
6.85
EUR -1.88
5.95
PHP -0.74 10.0
3.24
ZAR -0.69 -0.8
9.39
SGD -0.38 5.0
3.89
THB -0.17
4.29 -0.9
MYR 0.00 0.0
3.90
0.21 -2.4
IDR 3.67 Total Growth Working Capital Loans
point-to-point average -5.0
INR 0.61
1.38 Investment Loans Consumption Loans -4.3
CNY 1.00
6.72
ao 17-Feb-21 5.56 -10.0
TRY -3.79
1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10
-6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0
2015 2016 2017 2018 2019 2020 104
Source: Bank Indonesia *) Source: Reuters and Bloomberg
Regional Inflation Remains Under Control
…supported by maintained inflation in all regions
Inflation remains low on subdued domestic demand and adequate supply , JANUARY 2021(%, YOY)
Source: Central Bureau of Statistics of Indonesia (BPS), calculated

105
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 trade Improving Strengthening
Stabilizing Managing Strengthening Improving data
food reserves cooperation trade central-regional
the price demand side institution quality
and food between infrastructure coordination
export-import regions
management

106
Principles of Average Reserve Requirement Ratios Improvement
Considerations for the Average Reserve Requirement Effective

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

107
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%

108
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 The policy is expected to This
intermediation function and effective for stimulate the bank macroprudential
liquidity management, Bank conventional intermediation function to the policy instrument is
Indonesia issued Bank Indonesia commercial banks from real sector congruent with countercyclical and
Regulation (PBI) No. 16th July 2018 and for sectoral capacity and the can be adjusted in
20/4/PBI/2018 and Board of sharia banks from 1st economic growth target in line with prevailing
Governors Regulation (PADG) No. October 2018. compliance with prudential economic and
20/11/PADG/2018 concerning principles, while also financial dynamics.
the Macroprudential overcoming the issue of
Intermediation Ratio (MIR) and liquidity procyclicality.
Macroprudential Liquidity Buffer
(MLB) for Conventional
Commercial Banks, Sharia Banks
and Sharia Business Units.

109
Principles of Macroprudential Intermediation Ratio (MIR)*
MIR Sharia (Sharia Banks and Sharia

Regulation MIR (Conventional Commercial Bank)
Business 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  Minimum Capital Adequacy Requirement 14%
14%  For Sharia business units, the Minimum Capital
 Upper disincentive parameter 0.2 Adequacy Requirement is the same as that of the
 Lower disincentive parameter 0.1 parent conventional commercial bank
 Upper disincentive parameter 0.2
 Lower disincentive parameter 0.1
3 Scope of credit/financing  Credit: rupiah and foreign currency  Financing: rupiah and foreign currency
and deposits to calculate  Deposits in rupiah and a foreign currency:  Deposits in rupiah and a foreign currency: (i)
MIR / MIR Sharia (i) demand deposits, (ii) savings deposits; wadiah savings; and (ii) unrestricted investment
and (iii) term deposits, excluding interbank funds, excluding interbank funds
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 110
Principles of Macroprudential Intermediation Ratio (MIR)*
Regulation MIR (Conventional Commercial Bank) MIR Sharia (Sharia Banks and Sharia
Business Units)
6 Percentage of the
100%
securities held
7 Criteria for securities  medium-term notes (MTN), floating rate notes  sharia-compliant medium-term notes (MTN)
issued (FRN) and/or bonds other than subordinated and/or sukuk other than subordinated sukuk
bonds
 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  Average daily total deposits in rupiah at all  Average daily total deposits in rupiah at all
meet DD MIR /DD MIR branch offices in Indonesia branch offices and sharia business units in
Sharia  Including rupiah liabilities to a resident and Indonesia
non-resident third-party nonbank, consisting  Including rupiah liabilities to a resident and non-
of: (i) demand deposits, (ii) savings deposits; resident third-party nonbank, consisting of: (i)
(iii) term deposits, and (iv) other liabilities wadiah savings; (ii) unrestricted investment funds,
and (iii) other liabilities
10 Relaxation of DD  Bank Indonesia may relax the provisions of the DD MIR/Sharia DD MIR based on credit/financing
MIR/Sharia DD MIR disbursement 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 111
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
• In response to global and domestic
and Islamic business units as a source of bank funding in the calculation of MIR/sharia MIR.
economic developments, BI is
maintaining an accommodative policy • The criteria for loans/financing received by banks that are eligible to be included in MIR/sharia
mix to maintain the economic growth MIR calculation are as follows:
while also maintaining macroeconomic a. Loans/financing received in Rupiah and foreign currency;
and financial system stability. b. Loans/financing received in the form of bilateral loans and/or syndicated loans for
• BI relaxed MIR/sharia MIR policy in conventional commercial banks, Islamic banks and Islamic business units;
March 2019, which stimulated bank c. Loans/financing excludes interbank loans/financing.
lending. Nevertheless, the d. Loans/financing received with a maturity of no less than 1 year; and
macroprudential intermediation ratio e. Loans/financing received based on a loan agreement.
(MIR) is again approaching the upper • Based on points a and b, the adjusted MIR/sharia MIR formula is as follows:
bound, thus necessitating efforts to
increase bank lending capacity. Credit + Owned Bond
Deposit + Issued Bond + Loan/Financing Received
• Considering the potential of bank
funding sources that are not included in Lower disincentive parameter Upper disincentive parameter
the MIR ratio, for example the expanding
MIR/sharia MIR RR= MIR/sharia MIR RR=
share of loans/financing received by
Lower Disincentives Parameter x (Lower Bound of 0.2 x (Bank’s MIR/sharia MIR - Upper Bound of
banks, BI decides to adjust MIR/sharia
MIR/Sharia MIR Target – Bank’s MIR/Sharia MIR) x Deposit MIR/Sharia MIR Target – ) x Deposit
MIR policy in order to optimize
loans/financing received for bank
lending. *This disincentive applies for banks with CAR below
14%.
• This policy to stimulate credit growth
will comply with prudential principles.
Therefore, BI is only encouraging banks
with low non-performing loans and • The reference rate used to calculate penalties for banks that do not meet MIR/sharia MIR policy
adequate capital resilience to expand will be adjusted from the Jakarta Interbank Offered Rate (JIBOR) to the Indonesia Overnight Index
credit/financing. 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  Sharia-complaint securities denominated in
conventional commercial bank that may be used for rupiah held by an Sharia bank that may be
monetary operations (including SBI/SDBI/SBN); and used for sharia-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
commercial bank to rupiah deposits held by an Sharia bank to rupiah deposits
4 Flexibility Under certain conditions, the securities used to meet Under certain conditions, the securities used to
the MLB may be used for repo transactions to Bank meet the sharia MLB may be used for repo
Indonesia for open market operations, totalling no more transactions to Bank Indonesia for open market
than 2% of rupiah deposits operations, totalling no more 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  Rupiah deposits to calculate sharia MLB are
daily total deposits at all branches in Indonesia the average daily total deposits at all
branches in Indonesia
 Rupiah deposits include: (i) demand deposits, (ii)
savings deposits; (iii) term deposits, and (iv) other  Rupiah deposits include: (i) wadiah savings; (ii)
liabilities unrestricted investment funds, and (iii) other
liabilities
113
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 4% of rupiah deposits 6% of rupiah deposits
(MLB) for conventional commercial banks
2 Increase in the Macroprudential Liquidity Buffer 4% of rupiah deposits 4.5% of rupiah deposits
(MLB) 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 1% or maximum of 1 May 2020 – 31st
st
penalties IDR150,000 IDR100,000 December 2020

4 Supporting credit card issuer policy to Issuer discretion 1st May 2020 – 31st
extend the due date for customers December 2020
114
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 2. Relaxing the amount of loan/financing facility through indent
needs through housing loan, specifically by adjusting the LTV ratio mechanism to a maximum of 5 facilities without taking
for property loan and the FTV ratio for property financing for the account of the orders
1st facility, 2nd facility, etc., making the largest LTV ratio for 3. Adjusting the arrangement of stages and amount of property
property credit and FTV ratio for property financing as shown in the loan/financing disbursement of indent property:
table below.
“-“= 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.

116
Adjustment of LTV Ratio for Property Loans, FTV Ratio for Property
Financing, and Down Payments on Automotive Loans/Financing*
(Effective December 2nd, 2019)
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
developments, BI is maintaining an accommodative Financing.
policy mix to maintain the economic growth while
also maintaining macroeconomic and financial a. BI decides to relax the LTV ratio for property loans and FTV ratio for
system stability. This effort will be targeted to property financing by 5% from current ratio as follows:
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.
Source: Bank Indonesia *This adjustment will be effective from December 2nd, 2019 117
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
considered to meet the criteria. Loans/Financing
ii. In case that the residential area/building is not a a. Down Payments on Automotive Loans/Financing is
certified green belt area, an evaluation will be adjusted as follows:
conducted on each unit as follows:
 For buildings < 2500m2, the bank may conduct a i. Relaxation on the down payments of automotive loans
self-assessment using the tools/applications or automotive financing 5%-10% from current
provided by a recognized institution. regulations;
 For buildings > 2500m2, the assessment must be ii. The relaxation should consider the gross NPL/NPF
conducted by a recognized institution; ratios and gross NPL/NPF ratios on automotive
 For new buildings constructed in an area by one loans/financing;
developer or group of developers, the assessment iii. The adjustment of down payments of automotive
must be conducted by a recognized institution and loans/financing in points a and b is as follows:
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%

120
Adjustment of LTV/FTV Requirements on Automotive loans/financing
(effective from 1st March 2021 until 31st December 2021)
Bank Indonesia relaxes down payment requirements on automotive loans/financing to minimum 0% for all new motor vehicles to stimulate credit growth in
the automotive sector, while maintaining prudential principles and risk management
Policy Objectives and Background

a. In response to the latest global and domestic developments, Bank Indonesia is maintaining an accommodative policy mix in line
with efforts to stimulate economic recovery and maintain financial system stability.
b. Considering the need to stimulate recovery, particularly in the automotive sector, and considering the sector has strong
backward and forward linkages in the economy.
c. The policy is implemented as part of the policy mix with fiscal stimuli issued by the Government, including a reduction to the
luxury goods sales tax (PPnBM).
d. The amendment also takes into consideration the contained credit/financing risk in the automotive sector.
e. Looser downpayment requirements on automotive loans must comply with prudential principles and risk management.
Changes to Down payment Requirements on Automotive Loans/Financing

121
Adjustment of LTV/FTV ratio on Housing loans/financing
Bank Indonesia relaxes he Loan/Financing-to-Value (LTV/FTV) ratio on housing loans/financing to maximum 100% on all residential property (landed houses,
apartments and shop houses/office houses) for banks meeting specific NPL/NPF criteria, and repealing regulations on the gradual liquidation of partially
prepaid property to stimulate credit growth in the property sector, while maintaining prudential principles and risk management,
Policy Objectives and Background

a. In response to the latest global and domestic developments, Bank Indonesia is maintaining an accommodative policy mix in line
with efforts to stimulate economic recovery and maintain financial system stability.
b. Considering the need to stimulate recovery, particularly in the property sector, and considering the sector has strong backward
and forward economic linkages.
c. The amendment also takes into consideration the contained credit/financing risk in the property sector.
d. The LTV ratio is set at an upper limit of 100% for banks meeting the NPL/NPF requirements and regulations concerning the
liquidation of partially prepaid property (inden) are being relaxed, which must comply with prudential principles and risk
management.
a. Changes to LTV/FTV Ratio on Non-Green Property Loans/Financing

122
Adjustment of LTV/FTV ratio on Housing loans/financing
b. Changes to LTV/FTV Ratio on Green Property Loans/Financing
c. Changes to Indent Regulations

123
Assessment of Policy Rate Transmission to Prime Lending Rates
in the Banking Industry
Bank Indonesia published the “Assessment of Policy Rate Transmission to Prime Lending Rates in the Banking Industry" to accelerate monetary policy
transmission and expand the dissemination of information to corporate and individual consumers in order to enhance governance, market discipline
and competition in the credit market.
Prime Lending Rate and Deposit Rate Response to BI7DRR 1
Key Takeaways Bank Indonesia has maintained an accommodative monetary and macroprudential
 Prime lending rate response to lower policy rate policy stance in order to stimulate economic growth.
(BI7DRR) still rigid. • Prior to the Covid-19 pandemic, from June 2019 until Feb 2020, BI lowered the
BI7DRR policy rate five times by a total of 125bps from 6.00% to 4.75%.
 Greater prime lending rate rigidity at state-owned • From March 2020, Bank Indonesia lowered the policy rate another four times
banks compared with other bank groups. (100bps) to a level of 3.75% in November 2020.
 Prime lending rate rigidity found across all credit • In terms of liquidity, accommodative monetary and macroprudential policy
segments, excluding micro loans. significantly boosted liquidity in the banking industry in order to maintain
financial system stability and the bank intermediation function.
Notwithstanding, the lending rate response to a lower Graph 1.

policy rate and loose liquidity conditions in the banking BI7DRR – Monthly Deposit
Rate – SBDK – Prime
industry remains rigid. This is reflected by significant Lending Rate (SBDK)
rigidity in the Prime Lending Rate (PLR)2 in response to
the lower policy rate
• The prime lending rate is used as the basis for
determining the interest rate to be charged by the
bank to the customer yet does not include the risk Graph 2.
premium. Therefore, the interest rate charged by the Prime Lending Rate (SBDK)
bank to the borrower is not necessarily the same as based of banking group
• Regional Govt Banks (BPD)
the prime lending rate. • State Owned Banks (BUMN)
• National Private Commercial
PLR rigidity is a facet of nearly all credit segments, Banks (BUSN)
• Foreign Branch Banks (KCBA)
affecting consumer loans, corporate loans and retail
loans. The rigid banking industry response, as reflected Graph 3.
by smaller increments of prime lending rate reductions, Prime Lending Rate (SBDK)
based of credit segment
1has been observable in non-housing consumer loans
Assessment period until December 2020 based on data availability. • Mortgage (KPR)
2 (67bps) as rate
The prime lending well
is the as housing
base rate loans
published by (57bps) with
banks in accordance since June
OJK Regulation • Non Mortgage (non KPR)
2019
(POJK) No. 37/POJK.03/2019, dated 19th Dec 2019, concerning Bank Report Transparency and • Corporation
Publication. • Micro
Source: Bank Indonesia • Retail
124
Improving the Effectiveness of Monetary Policy Transmission
Bank Indonesia has instituted a Reformulation of Monetary Policy Operations Framework which consists of 3 pillars
Reformulation of
Monetary Policy Operational Framework
Implementation of BI 7 Day Implementation of Money Implementation of Reserve

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

signal and transactions management
Blueprint for Money Market Development (BPPU) 2025 launched on Dec 14th, 2020
to build a reliable and efficient ecosystem for money market development in Indonesia
Initiative I Initiative II Initiative III

Promoting Digitalization and Strengthen Strengthening Effectiveness of Developing Economic Financing Sources and
Financial Market Infrastructures Monetary Policy Transmission Risk Management
(Trading venue, central counterparty, (Repo, IndONIA and JIBOR, Overnight (long-term hedging, sustainability and green
BI-SSSS, BI-RTGS, trade repository) Index Swap, DNDF, LCS) financing, investor retail, asset securitization)
Blueprint is accessible here: https://www.bi.go.id/en/publikasi/kajian/Pages/Blueprint-Pengembangan-Pasar-Uang-2025.aspx

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

 Domestic Non-Deliverable Forward Transaction (DNDF Transaction)
1. To support the effort of Plain vanilla derivative transaction of foreign exchange against rupiah in the form
stabilizing the Rupiah exchange of forward transaction with fixing mechanism in the domestic market
rate through the additional of
 Forward Transactions
alternative hedging instruments
Forward Transactions are sell/purchase foreign currencies against rupiah
whereas the delivery of funds shall be performed in more than 2 days after the
2. To support the development and
transaction date
deepening of the domestic
financial market  Fixing Mechanism
Transaction settlement mechanism without full movement of funds by calculating
3. To increase the confidence of the difference between rate on the transaction date and reference rate in JISDOR
exporters, importers, and on a specified future time agreed in the contract (fixing date)
investors in conducting
 Other Definitions
economic and investment
The definition of derivative transaction of foreign exchange against rupiah,
activities through the flexibility of
Forward Transaction, Spot Transaction, Customers, Foreign Party is referring to
hedging transactions against
Bank Indonesia regulations regarding foreign exchange transaction against
Rupiah currency risk
rupiah

126
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
127
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

Hedging Bank
Foreign Party 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.
128
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.

129
Strengthening Jakarta Interbank Spot Dollar Rate (JISDOR)
To accelerate money market deepening
• The strengthening of JISDOR to increase domestic foreign exchange market credibility and support exchange rate stability. This
measures is in line with the benchmark reform initiatives taking place on global financial markets, to establish a reference rate
that represents daily exchange rates based on transactions supported by best practice methodologies.
 Effective starting April 5, 2021
• JISDOR is obtained by calculating the weighted average based on transaction volume of the Rupiah exchange rate against USD
on the spot market within the specified time window
JISDOR is available on every working days on https://www.bi.go.id/en/statistik/indikator/Default.aspx

130
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
4 flows during the contract period or at the
completion of the contract based on certain
notional amount. IRS pricing is based on
JIBOR.
OIS is an interest rate swap agreement based

3 on a daily overnight reference rate (IndoNIA)
Improvement of
IRS transaction
2 liquidity
Alignment
between JIBOR
and OIS interest  Encourage price transparency in the
rate rupiah money market
OIS transaction
1 with IndoNIA as
 Strengthen monetary policy
transmission
benchmark rate  Provide alternative hedging instruments
IndoNIA & JIBOR against rupiah interest rate changes
 Support securities market deepening in
Indonesia
Strengthening
reference rate
based on real
transactions
131
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 Calculation OIS Quotation rates
Interest Payment
foreign party is required to have an analysis on the Base based on 2
based on Netting
need of rupiah interest rate derivative transactions. ACT/360 decimals
IndONIA Notional of Net

Market Conventions. When performing IRS and OIS interest payment in Quotation : 1W,
Index
transactions, the respective bank is bound by IDR with 0 2W, 1M, 2M, 3M,
with 5
market conventions agreed upon by market players decimals 4M, 5M, 6M
decimals
through industry association including the
Indonesian Foreign Exchange Market Committee.
Compound At the 1st phase,
Settlement Date =
Floating Rates OIS settlement will
Settlement. Settlement can be performed as a 1 business days
(CFR) based only be done at the
netting payment and every transaction has to be after Maturity Date
on 5 end of the OIS
settled in Rupiah. Close-out netting can be applied (MD)
decimals tenor (MD+1bd).
under predetermined conditions.

132
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.

133
Financial Intermediation Affected Economic Activities
Recovery of financial services intermediation remains a challenge as credit demand has not fully recovered due to limitations on daily
activities…
Following the Bank’s restructuring program, credit growth shows a On-going focus on repayment and restructuring, restrained new financing
declining trend in 2020 with a -2.41% growth in December 2020. distribution, pushing growth to contract by -18.20% in December 2020.
IDR Tn
Bank Loans YoY Growth (rhs) YoY IDR Tn YoY
6,000 5,481.56 16% Financing Growth (rhs)
500 10%
5,000 12%
400 370 5%
4,000
8% 0%
300
3,000 -5%
4% 200
2,000 -10%
-2.41% 0% 100
1,000 -18.20% -15%
0 -4% - -20%
Jan-19
May-19
Jun-19
Aug-19
Nov-19
Jan-20
Apr-20
May-20
Jun-20
Aug-20
Nov-20
Sep-19
Sep-20
Feb-19
Apr-19
Oct-19
Dec-19
Feb-20
Oct-20
Dec-20
Jul-19
Jul-20
Mar-19
Mar-20
May-19
Aug-19
Aug-20
Feb-19
Feb-20
Apr-20
May-20
Jan-19
Jun-19
Sep-19
Apr-19
Nov-19
Jan-20
Jun-20
Sep-20
Nov-20
Dec-19
Dec-20
Jul-19
Oct-19
Oct-20
Jul-20
Mar-19
Mar-20
After experiencing a contraction since 2019, life insurance premium

Capital raising through securities issuance reached IDR 118.7 Tn in 2020, growth increased by 1.9% while general insurance premium growth
and recorded the highest number of IPO among ASEAN countries (53). remained steady from the previous month.
IDR Tn Life Insurance Premium Growth

IPO Rights Issue Corporate Bond & Sukuk 50
General & Reinsurance Premium Growth
180
160
30
140
120
10 1.9
100 92.3
80
-10
60 -7.2
40 20.3
-30
20 6.1
Aug-19
Aug-20
Jan-19
Apr-19
May-19
Jun-19
Nov-19
Jan-20
May-20
Jun-20
Nov-20
Sep-19
Sep-20
Apr-20
Feb-19
Oct-19
Dec-19
Feb-20
Oct-20
Dec-20
Jul-19
Jul-20
Mar-19
Mar-20
0
2016 2017 2018 2019 2020
Source: Financial Service Authority (OJK) 134
Resilient Financial Institutions
Domestic financial institutions remain sound and stable, supported by strong capitals and leverage amidst hurdles due to the
pandemic… RBC of the insurance industry remained high and well above the
CAR of the banking sector remained high and stable at 23.84%, with minimum threshold (120%) with Life Insurance RBC at 529% and
Tier-1 capital at 22.06% as of December 2020. *) General Insurance RBC at 343%. *)
CAR Tier 1 Life Insurance (Lhs) General Insurance (rhs)
26 900 400
23.84 343
24 800 350
22.06 700
22 300
600 529
20 250
500
18 200
400
16 150
300 threshold Insurance RBC (rhs)= 120%
14 200 100
threshold Insurance RBC (Lhs)= 120%
12 100 50
10 0 0
May-19
Jun-19
Aug-19
Sep-19
Nov-19
May-20
Jun-20
Aug-20
Nov-20
Jan-19
Jan-20
Sep-20
Feb-19
Apr-19
Oct-19
Dec-19
Feb-20
Apr-20
Oct-20
Dec-20
Mar-19
Jul-19
Mar-20
Jul-20
Jan-19
Jan-20
Aug-19
Aug-20
May-19
Jun-19
Nov-19
May-20
Jun-20
Nov-20
Sep-19
Sep-20
Apr-19
Apr-20
Feb-19
Dec-19
Jul-19
Oct-19
Feb-20
Oct-20
Dec-20
Jul-20
Mar-19
Mar-20
As of December 2020, banking sector’s profitability remained adequate Gearing ratio of multi-finance companies remained steady far below
with a slight increase from the following month. *) the threshold in December 2020. *)
6 Net Interest Margin Return on Assets %

4
4.32
3
4
2.15
2
2 1.59
1
0 0
Aug-19
Aug-20
Jan-19
May-19
Jun-19
Nov-19
May-20
Jun-20
Nov-20
Jan-20
Sep-20
Apr-19
Jul-19
Sep-19
Apr-20
Jul-20
Oct-20
Feb-19
Oct-19
Dec-19
Feb-20
Dec-20
Mar-19
Mar-20
Aug-19
Aug-20
Jan-19
May-19
Jun-19
Nov-19
Dec-19
Jan-20
May-20
Jun-20
Nov-20
Feb-19
Sep-19
Sep-20
Dec-20
Apr-19
Apr-20
Oct-19
Feb-20
Oct-20
Jul-19
Jul-20
Mar-19
Mar-20
Source: Financial Service Authority (OJK) *) provisional figures due to the relaxation on financial institutions’ report to OJK because of Covid-19
135
Manageable Credit Risks with Adequate Liquidity
Financial Institutions are equipped with ample liquidity while credit risk is still manageable..
Investment adequacy ratios in the insurance industry, both life and

The ratios of liquid assets to deposit and non-core deposits remained well general insurance, were maintained above the threshold of 100% and
above the threshold following banks’ cautious appetite for lending. *) remained steady in December 2020. *)
% % %
Liquid Assets to Non-Core Deposits 240 Life Insurance General Insurance
170 149.38 40
160 220 203.3
Liquid Assets to Deposits (rhs) 35
150 200
140 30 180
130 32.31 160
120 25 140
110 120 105.7
20
100 100
90 15 80
80
threshold LA to Deposit (rhs) = 10%
10 60 threshold Investment Adequacy Ratio= 100%
70 40
60 threshold LA/ NCD= 50% 5 20
50
0
40 0
Aug-19
Aug-20
Nov-19
Jan-19
May-19
Jun-19
Jan-20
Apr-20
May-20
Jun-20
Nov-20
Sep-19
Dec-19
Sep-20
Dec-20
Apr-19
Feb-19
Oct-19
Feb-20
Oct-20
Jul-19
Jul-20
Mar-19
Mar-20
May-19
Sep-19
May-20
Sep-20
Aug-19
Aug-20
Jun-20
Jan-19
Apr-19
Jun-19
Apr-20
Nov-19
Jan-20
Nov-20
Dec-19
Dec-20
Feb-19
Oct-19
Feb-20
Oct-20
Jul-19
Jul-20
Mar-19
Mar-20
Banking NPL ratios are well-managed below the threshold, at 3.06% As economic conditions are improving, NPF of multi-finance companies
gross and 0.98% net as of December 2020. *) are steadily declining which is at 4% as of December 2020. *)
% 6
5 NPL Net NPL Gross
5
4 4
3.06 4
3 3
2 2
1 0.98 1
0
0
Jun-19
Aug-19
Jun-20
Aug-20
Jan-19
May-19
Sep-19
Nov-19
Jan-20
May-20
Sep-20
Nov-20
Dec-19
Dec-20
Apr-19
Apr-20
Feb-19
Oct-19
Feb-20
Oct-20
Jul-19
Jul-20
Mar-19
Mar-20
May-19
May-20
Sep-19
Sep-20
Aug-19
Aug-20
Jun-20
Jan-19
Apr-19
Jun-19
Nov-19
Jan-20
Apr-20
Nov-20
Dec-19
Dec-20
Feb-19
Oct-19
Feb-20
Oct-20
Jul-19
Jul-20
Mar-19
Mar-20
Source: Financial Service Authority (OJK) *) provisional figures due to the relaxation on financial institutions’ report to OJK because of Covid-19 136
Manageable Market Risks
Amidst global pressure, the risk profile of domestic financial institutions remains manageable…
Net open position in the banking sector was still maintained far below The net asset value (NAV) of Equity Mutual Funds continues to
the maximum limit of 20% in December 2020. *) recover, following JCI's upward trend.
% IDR Tn NAV Equity Mutual Funds JCI (rhs)

5 200 7,000
4 6,000
150 5,000
3
1.58 4,000
2 100
3,000
1 As of 5 Feb, 2021
50 As of 5 Feb, 2021 2,000
0 1,000
May-…
Nov-…
May-…
Nov-…
Jun-19
Aug-19
Jun-20
Aug-20
Jan-19
Sep-19
Jan-20
Sep-20
Feb-19
Apr-19
Oct-19
Dec-19
Feb-20
Apr-20
Oct-20
Dec-20
Jul-19
Mar-19
Mar-20
Jul-20
0 0
May-19
May-20
Jan-19
Sep-19
Nov-19
Jan-20
Sep-20
Nov-20
Jan-21
Mar-19
Jul-19
Mar-20
Jul-20
Insurance & pension fund investment value was steadily increasing with
insurance reaching IDR 1242.47Tn and pension fund at IDR 305.83Tn in Multi-finance companies’ exposure to foreign and domestic debt remained
December 2020. *) stable. *)
IDR Tn Insurance Pension Funds (rhs) IDR Tn 250 Domestic Debt Foreign Debt
1,500 400
1242.47
200
1,200 140.20
350
150
900
300
100
600
305.83
250 50 91.80
300
0 200 0
Aug-19
Aug-20
May-19
Jun-19
Nov-19
May-20
Jun-20
Oct-20
Nov-20
Jan-19
Sep-19
Apr-19
Oct-19
Jan-20
Feb-20
Sep-20
Feb-19
Dec-19
Apr-20
Dec-20
Mar-19
Jul-19
Mar-20
Jul-20
Aug-19
Aug-20
Nov-20
Jan-19
May-19
Jun-19
Nov-19
Jan-20
May-20
Jun-20
Sep-20
Dec-20
Sep-19
Dec-19
Apr-19
Apr-20
Oct-20
Feb-19
Oct-19
Feb-20
Jul-19
Jul-20
Mar-19
Mar-20
Source: Financial Service Authority (OJK) *) provisional figures due to the relaxation on financial institutions’ report to OJK because of Covid-19 137
Domestic Capital Market Performance Amid Global Challenges
Positive development of Covid-19 vaccines and prospect of economic recovery have kept a positive tone in the global capital market…
Global indices continue to rise as more investors have returned to JCI experience correction in January but continues its upward trend
stock markets. as it enters February.
Stock Index Performance as of 5 Feb’21 (compared to 31 Dec’20) 340 Comp Bond Index Comp Stock Index (rhs) 7000
MAL -2.99% 6500

320
PHIL -1.69%
CHIN 0.67% 6000
300
BRAZ 1.03%
US 1.77% 5500
EU 280
1.81%
SIN 5000
2.23%
INDO 2.89% 260
4500
THAI 3.26%
TURK 3.42% 240
4000
WORLD 3.76%
JPN 4.86% 220 3500
As of 5 Feb, 2021
HKN 7.56%
S KOREA 8.60% 200 3000
Jan-19 Apr-19 Jul-19 Oct-19 Jan-20 Apr-20 Jul-20 Oct-20 Jan-21
Non-resident portfolios, both of gov’t bonds and equity have recorded Gov’t bond yields remain competitive with continued improvement
a net buy of IDR 10.02 Tn and IDR 3.79 Tn respectively in February. followed by stable rupiah as risk premium is maintained.
100 Gov't Debt Securities Equity Yield (%) 5-yr Yield 10-yr Yield
10 20-yr Yield IDR (rhs)
50
3.79 18,000
9
0
10.02 14,000
8
-50
10,000
7
-100
6 6,000
-150
5 2,000
Aug-19
Aug-20
Jan-19
May-19
Jun-19
Jan-20
May-20
Jun-20
Nov-20
Jan-21
Sep-19
Sep-20
Apr-19
Apr-20
Feb-19
Oct-19
Dec-19
Feb-20
Oct-20
Dec-20
Feb-21
Jul-19
Jul-20
Mar-19
Mar-20
Nov-19
May-19
Nov-19
May-20
Nov-20
Jan-19
Sep-19
Jan-20
Sep-20
Jan-21
Mar-19
Jul-19
Mar-20
Jul-20
Source: Bloomberg and Ministry of Finance 138
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 2 Maintaining financial market stability

sector
OJK Regulation No. 11/POJK.03/2020: OJK Circular Letter No. 3/SEOJK.04/2020:
“National Economic Stimulus as A “Other Conditions as Significantly Fluctuating Market
Countercyclical Policy of The Impacts of Condition on Stock Buyback issued by Issuers or Public
COVID-19 Outbreak” Companies”
Bank  Relaxation of credit assessment and credit restructuring to - Prohibition of short-selling
debtors who are affected by COVID-19. - Asymmetric Auto Rejection (current auto rejection limits
- Credit assessment (up to IDR10 billion) is based only under 7%)
on the punctuality of debtors to pay their debts and - 30-minute Trading Halt for 5% decrease in IHSG
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, Aimed to enhance the participation of shareholders in General
consolidation, acquisition, and/or integration to banks Shareholders Meeting (RUPS) by allowing electronic authorization
permitted by OJK. to third parties.
*) OJK Regulation No.16/POJK.04/2020:
*) OJK Regulation No. 14/POJK.05/2020: “The Implementation of Electronic General Shareholders Meeting
“Countercyclical Policy as an Impact of (GSM)”
Regulating the implementation of electronic corporate decision
NBFI COVID-19 for Non-Bank Financial Institution making by requiring a member of the board of
(NBFI)”
 Extended deadline of report submission director/commissioner in charge of GSM, while other electronic
 Relaxation of financing assessment attendances are counted as fulfillment of attendance quorum.
 Financing Restructuring
- Regulating loan restructuring, deadline of periodic *) OJK Regulation No.17/POJK.04/2020:
reports, “Material Transaction and Changes in Business Activities ”
- Conducting fit and proper tests, Improving the definition and procedure of Material Transaction,
- Determination of asset quality of financing, as well as the effectiveness of regulation to enhance the
- Calculation of solvency level of insurance companies, protection of public shareholders and the quality of information
- Calculation of pension fund quality, and disclosure in Material Transaction and Business Activities
- Implementation of asset management provisions. 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 139
economic activities.
Further Stimuli to Provide Liquidity and Capital in Banking
Industry
Relaxation for Conventional and Sharia Restructured credit/financing is excluded from the Loan at Risk (LAR) in the
Banks assessment of banks performance. Banks are also allowed to approve credit
(Reporting/Treatment/Governance of restructuring with several alternative governance by considering the necessary
Restructured Credit/Financing) 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)
Adjustment of Banking Provisions ii. Maintaining the obligation of fulfilling Liquidity Coverage Ratio (LCR) and
Implementation during Relaxation Period Net Stable Funding Ratio (NSFR) for BUKU 3, BUKU 4, and foreign banks
at a minimum level of 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 i. The deferment reforms include Risk-Weighted Assets (RWA) for operational
Implementation (valid until 31 December risk, credit risk, market risk, and Credit Valuation Adjustment (CVA)
ii. Until then, the Capital Adequacy Requirement still refers to the current
2022)
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
Relaxation for Rural and Rural Sharia Banks Maximum Limit 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 Providing Interest Subsidies for MSMEs

(PEN) 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 subsidies while debtors with credits up to IDR10 billion will go
recovery, 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
Fund Placement COVID-19, valid from 29 February 2020.
Targeted
Placement of funds by the Government to
Beneficiaries Other Requirements
provide liquidity support to banks conducting
loan restructuring and to provide additional • MSMEs debtors with credits up • Obedient taxpayer
to IDR10 billion
credit / working capital financing • Excluded from National
• Debtors of housing loans (KPR) Blacklist (DHN)
up to type 70
• Debtors of motorcycle loans for
productive activities, including
OJK supports the program through Liquidity online transportation and
Buffer and Credit Restructuring to Banks and informal business
Multi-Finance Companies
OJK’s Role Mechanism
Providing necessary information in The provision regarding the
the implementation of interest budgeting, implementation, and
subsidies based on the procedure responsibility mechanism of
which will be arranged through Joint interest subsidies and debtor
Decision Letter (SKB) requirements 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  Enhancement of electronic reporting system.
fund, IGBF (Indonesia Government Bonds Future) &  Development of electronic public offering.
equity 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  Development of market players’ capacity
investors (insurers & pension funds) in capital  Enhancement of GCG for publicly-listed companies
markets .  Establishment of disgorgement fund
 Development of the domestic investor base
(conducting 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.
Promoting the
Developing Developing Strengthening
establishment
financial Enhancing the micro-credit the role of
of Islamic
education role of the products with Financial Access
microfinance
models utilizing “Investment additional Acceleration
institutions
various delivery Alert Taskforce” business support Taskforce (TPAKD)
(“Bank Wakaf
channels (“KUR Klaster”) in local areas
Mikro”)
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 & MARKET INFRASTRUCTURE
3 Pilars HARMONIZATION &
RISK MANAGEMENT DEVELOPMENT
EDUCATION
Money Bond Stock Syariah Structure Product

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

of Financial Infrastructure 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

Progress of NCSA Programs
Family Hope Program Non Cash Food Assistance

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

147
Section 8
Progressive Infrastructure Development:
Strong Commitment on
Acceleration of Infrastructure Provision
Institutional Reforms to establish a conducive PPP ecosystem
Institutional Reforms for PPP Implementation
PPP Joint Office: Indonesia Sarana Multi

KPPIP:
Information center Infrastructure Infrastruktur:
Coordinating unit
for policy Guarantee Facilitating
in decision-
coordination and Fund: Provides infrastructure
making
capacity building guarantee and financing,
processes and
to encourage supports preparing project,
debottlenecking
the use of PPP project and serving
efforts for
schemes preparation advisory
infrastructure
acceleration
Project Development
Facility (PDF)
PPP Stages
Outline Determination of Tender Financial

Business Funding document + Transaction PPP Agreement
Close
Case Scheme preparation
Final Business
Case (FBC)
Government Contracting Agency (PJPK)
Legend
Ministry of
Business
National
Entity Developm ent
Planning
PIC
Business Lender Ministry

of
Entity Finance
Source: Committee for Acceleration of Priority Infrastructure Delivery (KPPIP) 149

Reforms Along the Project’s Life Cycle
...to encourage and accelerate infrastructure project using PPP scheme
Government of Indonesia
Project Viability
Guarantee Availability Land
Development Funding Tax Facilities
Scheme Payment Acquisition
Facility (PDF) Gap (VGF)
Preparation Bidding Process Construction
Project A facility which Guaranteeing MoF Reg. A scheme in which A facility to support
development contributes to govt. contractual No.150/2018 allowed concessionaires land acquisition for
facility assists construction obligations under 100% Tax Holiday receive periodic infrastructure
the Government cost in order to infra. concession for 18 Pioneering payments from projects particularly
Contracting increase project agreements and Industries for 5 – 20 central or regional projects that involve
Agency (GCA) in financial MoF Reg. No. years depending on government if the private sector
PPP project feasibility 130/PMK.08 the investment value. service standard is Managing entity:
preparation The tax holiday is fulfilled. The Ministry of Finance;
/2016 re: Govt.
(PDF&TA) not only given to MoF Regulation Ministry of Agrarian
guarantee for the new investments and MoHA and Spatial
Managing entity: electricity project but can also be Regulation on Planningl/BPN, and
KPPIP, PT SMI Managing entity: acceleration obtained by the Availability BLU-LMAN
and PT IIF, Ministry of Managing entity: existing taxpayers Payment have
Ministry of Finance based Indonesia Infra. who want to expand been stipulated.
Finance on GCA Guarantee Fund their business.
proposal Govt’s (IIGF) and MoF Managing entity: Gov’t. commitment:
commitment: Managing entity: Ministry of Finance US$ 9.3 bn (2016-
Max 49% per Govt’s 2021)*
Ministry of Finance Ministry of Home
commitment:
project cost Affairs *USD1=IDR13,500
US$ 450 Mil

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

Limited Concession Scheme as an Alternative of Infrastructure financing
Presidential Regulation No 32/2020 about Infrastructure Financing through Limited Concession Scheme
Definition
LCS Principles
Limited Concession Scheme of
Infrastructure Asset is the asset LCS transfers concession rights from brownfield asset
owned by the Government and/or SOEs to private sector
concession agreement to improve
to operate, maintain, and develop the assets;
operations of Government assets
(BMN) and/or SOEs’ assets to As the rewards, Government and/or SOE will receive upfront
generate revenue to improve similar payment or annuity payment during the concession period
project operations and/or finance Future CAPEX during the concession period will be borne by
other infrastructure provision the concession holder to ease the Government and SOE
budget burdens
Infrastructure Financing
Priority Technical Criteria for the LCS assets
Revenue generated by the LCS will be The asset has been fully operated for minimum 2 years
used to fund the priority infrastructure The asset needs to improve operation efficiency based on international
projects and/or national strategic
standard
infrastructure projects
Asset's useful life minimum is 10 years
For the SOE’s asset, the asset must have positive cash flow for minimum 2
years in a row and has been audited at least 3 years in a row
For Government asset (BMN), the asset should be on the Ministry Financial
report that has been audited based on the Government Accountancy
Standard in the previous period

Land Value Capture (LVC) Scheme
“
A policy approach that enables communities to recover and reinvest economic value increases and
increases in economic productivity that result from public investment and other government actions.
(Lincoln Instituteof LandPolicy)
Development Based
Tax based LVC
LVC
Land Sale and Rent
Land and Property Tax
Air Right Sale

Betterment Levies and
Special Assessment
Joint Development
Tax Increment Financing
(TIF) Land Readjustment
LVC Benefit Triple Win LVC

• Local revenue from tax and levy Better Creating
Better city planning and development Reducing
• Urban Fiscal
Regional growth Subsidy
• Mobility Space
• Distributed developmentin urban area

Sovereign Wealth Fund (SWF)
Government of Indonesia
SWF Investment Guide Cq. Ministry of Finance

Principal
Indonesia Sovereign Wealth Fund
(Lembaga Pengelola Investasi/LPI) Investor
Domestic and
• Omnibus Law mandated the International
(ex. ADB, JBIC)
Master Fund
establishment of Sovereign Investor Manager
Wealth Fund as GoI investment Management
Co – Investor
body Agreement
(Minority Shareholder)
• With goal to
Direct landing to Master Fund /
• Increase and optimize company/ asset/ project Investment Investment
asset value in long term Agreement Agreement
• To support
sustainable Managed fund Managed fund Managed fund Managed fund Managed fund
development for Energy & Managed fund
for for Health for for
Natural for New Capital
• GoI committed to invest IDR infrastructure sector Tourism Technology
Resources
15 Billion as initial capital • Toll roads • Oil & Gas • Hospitals • Tourism SEZ • Digital lending • Contractor
for SWF/LPI • Airports reserves • Pharma- • Tanamori • Payments • Utilities
• Seaports ceuticals • Toba • Commerce • Land &
• Likupang building
• Hotel chain

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
2
Acceleration of the National Strategic Projects Implementation
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.
3
Presidential Reg. No. 56/2017 on Social Impact Handling in Land Acquisition Process for PSN
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
5
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. 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, j.o Presidential Decree no.109/2020
Project acceleration for Land transfer fee waiver

private investment
Settlement of Electronic permit licensing

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

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

New Facilities
via KPPIP IT System Guarantee Provision
Existing Facilities

Job Creation Law ‘s Positive Development of PSN
Government Regulation Government Regulation on Government Regulation on

on Ease of Doing Land Acquisition for Public Spatial Adjustment for Forest and
Business for PSN Interest Land Right/Permit
Government Government Regulation

Regulation on on Land Bank
Spatial Planning

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 Aeroplane Industry
8 Projects
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
PSN Profile of 223 Projects and 3 Programs
The Estimated Investment Value for 5 Sectors with Highest

223 Projects + 3 Programs PSN1 Investment 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$ 307.4 US$ 96.6 Bn
SEZs and IEs

Billion
Private
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
From 2016 –2020, there were 92 projects1 completed with total
estimated investment value of IDR 847 tn
Completed 2016
20 Projects (IDR 33,3 T)
• 7 Airports • 1 Seaports
• 1 Toll Road • 1 Gas Pipe
• 6 Dam • 4 National Border
Completed 2017 Completed 2018 Completed 2019 Completed 2020
10 Projects (IDR 61,4 T) 32 Projects (IDR 207,4 T) 30 Projects (IDR 165,3 T) 12 Projects (IDR 135,3 T)
• 4 Airports • 1 Airport
• 2 Toll Road • 3 National Border • 2 Railway • 1 Airports
• 9 National Road • 1 Train
• 1 Access Road • 1 Dam • 4 Dam • 4 Industrial Zone • 3 Highway
• 1 Airports • 1 Irrigation • 1 Irrigation • 4 Smelter • 6 Industrial Zone • 1 SPAM
• 1 Gas Facility • 10 Toll Road • 1 Fishery Center • 2 Smelter • 3 Industrial Estate
• 4 Dam • 2 Dam
• 5 SEZ • 1 Port
• 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
160
Since January 2020, 12 PSN projects completed
with 19 projects operate partially and 99 under construction
PSN Progress (January – December 2020) PSN Investment contributor
State budget
Completed (IDR 124,2 6%
T)
SOE
Operate Partially (IDR 1.442,2 T)
25
% IDR 4.817,7
Construction (IDR 1.749,9 T) Trillion*
Transaction (IDR 214,7 T) 69%
Preparation (IDR 1.286,8 T) Private
*Include10 programs -> 6 Operate partially, 1 *Exclude Regional Development program, food estate
Construction, and 3 Preparation program and Bali Utara airport investment

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 16. Patimban Port 28. Abadi WK Masela Field
Road 17. Inland Waterways Cikarang-Bekasi-Laut (CBL) 29. Unilization Field Has Jambaran-Tiung Biru
5. Probolinggo – Banyuwangi Toll Road 18. Palapa Ring Broadband 30. Indonesian Deepwater Development (IDD)
6. Yogyakarta – Bawean Toll Road 19. Batang, Central Java Power Plant (CJPP) 31. Tangguh LNG Train 3 Development
7. SHIA Express Railway 20. Central – West Java Transmission Line 500 kV 32. West Semarang Drinking Water Supply System
8. MRT Jakarta South-North Line 21. Indramayu Coal-fired Power Plant 33. Jakarta Sewerage System
9. Makassar-Parepare Railway 22. Sumatera 500 kV Transmission (4 Provinces) 34. National Capital Integrated Coastal
10. Light Rail Transit (LRT) of Jakarta- 23. Mulut Tambang Coal-fired Power Plant (6 Development (NCICD) Phase A
Depok-Bogor-Bekasi Provinces) 35. Jatiluhur Drinking Water Supply
11. LRT of South Sumatera 24. PLTGU (16 Provinces) 36. Lampung Drinking Water Supply
12. East Kalimantan Railway 25. Bontang Oil Refinery 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
5% will start operating after 2019 Trans Sumatera Toll Road
Segment of Pekanbaru-Dumai (131,5Km) has been operated on
60% 3 projects in transaction Sept 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
US$ 183.9 Billion and Phase II has been decided in the KPPIP Ministerial meeting –
8% 49% will be borne by Central Government and 51% will be borne
US$120.7 billion from Private/ Provincial Government of DKI Jakarta.
PPP
Patimban Port
26% US$47.7 billion from SOE/
Loan Agreement has been signed on 15 November 017.
Regional SOE
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 1. Regulation No.1/2015 concerning electricity Launching 35.000 MW
35,000 MW / 5 years supply cooperation & joint utilization of the by the President in
electrical network among license holders. Cabinet Meeting
(Kepmen ESDM No. 0074/2015 on Goa Beach Sanden
Progress of
RUPTL 2015-2024) 2. Regulation No.3/2015, concerning DIY
35,000 MW
Procedures of 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 35,000 MW Program Distribution
Indonesia, requires construction Update Electricity Supply Business Plan
of large capacity plant "
(RUPTL) 2019-2028)
Kalimantan (4,477 MW) Sulawesi (2,570 MW)
1. Op. 904 MW 1. Op. 1,146 MW
Maluku-Papua (877 MW)
2. Cons. 785 MW 2. Cons. 963 MW
1. Op. 437 MW
The progress so far: 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. 150 MW
1. Op. 1,302 MW
5. Plan. 158 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% 19 2% 24
% %
16 6% 5% 3% 2%
9% 19 18
% 28
% %
% 32
44
% %
30
38 52
%
24 % %
57 54
% % %
706 MW in 998 MW in 2,899 MW in 6,811 MW in 8,400 MW in

operating phase operating 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 2,228 MW in 954 MW in 734 MW in 724 MW in

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

PLN Subsidiary Independent
and Transmission Ministry of
(Joint Venture) Power Producer
Finance
Strengthen Equity
Strengthen PLN‘s Balance Sheet
Loan from Equity Injection by PT PLN’s divident
independent lenders the Government allocation
Refinancing Hedging
Bond issuance Asset Direct Company
by PT PLN Revaluation Lending Tax Holiday *)SJKU=Surat Jaminan
Financial Asset Optimization Kelayakan Usaha/
Direct Other types Business Viability
Lending of 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
existing study and user-friendly
latest project status. framework.
Jatigede Dam (Operational) Umbulan Drinking Water Provision System, East Java
Transportation
An integrated IT Record decisions related

Jakarta MRT Project2 Terminal 3 Ultimate Soekarno-Hatta2 system with to projects and
monitoring capacity synchronize the
for stakeholders, so implementation schedule
that they can have that can be utilized by
real time data. stakeholders.
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 167
Infrastructure Projects and Financing Schemes
Promotion of Infrastructure Development to Accelerate Economic Growth
Infrastructure Development is a Key Priority Establishment of PPP Unit

l Infrastructure Development in order to: Broad  Champion project preparation and acceleration of the PPP
1. Accelerate growth particularly in rural areas Objective agenda in 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 highly
l Infrastructure fundraising needs: $357.9 bn (or equivalent to IDR4,796.2 tn) Mandates qualified transaction advisors
l 245 National Strategy Projects under National Medium Term Plan for 2015 –  Act on behalf the Minister of Finance in providing government
2019 with an estimated total cost of IDR 4,197 tn (USD 313 bn) support and approvals for projects
l 37 priority infrastructure projects with an estimated cost of IDR 2,490 tn (USD  Coordinate all public finance instruments
180 billion) Additional  Provide input for PPP Policy program Development and Regulations
l Majority of 37 priority projects are expected to commence commercial operation Mandates  Implement capacity building for Govt. Contracting Agency (GCAs)
by 2018 - 2022  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  Government to inject capital into SOEs:
(special allocation fund & partnership between the Indonesian government and the private sector Intended multiplier effect to develop more
rural transfer) – Projects ready for auction under the PPP Scheme: infrastructure 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 – Infrastructure and maritime development
– Food security: International Airport – Transportation and connectivity
Irrigation, dams etc. – Water supply projects such as the West Semarang Project – Food security
 Various government support for PPP:
– Maritime: Seaports,  Medium term infrastructure developments to
shipyards etc. – Project Development Facility (PDF): Helps Government focus on:
Contracting Agencies (GCAs) in project preparation and
– Connectivity: Village transaction – Water Supply
roads, public – Viability Gap Fund: improves financial viability of PPP projects – Airports
transportation etc. – Government Guarantees: Supports PPP projects’ bankability by – Seaports
providing sovereign guarantees – Electricity and power plants
– Infrastructure Financing Fund: Provided through PT SMI and IIGF – Housing
– Availability Payment (AP): GCA pays private partner based of availability – Mining
of infrastructure services
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 Q3 2020 **
l Power (Electricity) – Full credit guarantee for PT

PLN’s debt payment obligation under FTP 1 Credit Outstanding
10,000MW and 35GW programs*. Central Government Guarantee for Guarantee
No. /Investment Exposure
Infrastructure Programs Document
l Clean Water – Guarantee for 70% of PDAM’s (billion)**
debt principal payment obligations.
l Toll road – Full credit guarantee for PT Hutama 1 Coal Power Plant 10,000MW Fast Track
15 USD 1.30
Karya’s debt payment obligations for the Program (FTP 1)
Credit development of Sumatra Toll Roads. 2 Clean Water Supply Program 6 USD 0.01
Guarantee 3 Direct Lending from International Financial
l Infrastructure - Full credit guarantee on SOE’s 7 USD 1.83
borrowing from international financial institution Institution to SOEs
& guarantee for PT SMI’s local infrastructure 4 Sumatra Toll Road 10 USD 3.04
financing.
5 Renewable energy, Coals & Gas Power Plant
7 USD 3.88
l Public Transportation (Light Rail Transit) – Full 10,000 MW (FTP 2)
credit guarantee for PT Kereta Api Indonesia’s 6 Public-Private Partnerships (PPP) 7 USD 4.93
debt payment obligations for the development of
7 Regional infrastructure financing 1 USD 0.20
LRT Jabodebek.
8 Public Transportation (Light Rail Transit) 1 USD 0.41
l Power (Electricity) – Guarantee for PT PLN’s 9 Electricity Infrastructure Fast Track Program (35
Business Viability
6 USD 4.51
obligations under Power Purchase Agreements GW)
Guarantee (BVG) with IPPs (off-take and political risk) under FTP-2 Total 60 USD 20.09
10.000MW and 35GW programs*
l Infrastructure – Guarantee for Government-related

l From 2008 to Q3-2020 **, the government has issued 89 guarantee documents
PPP entities obligations (line ministries, local with total value of USD40.69 billion, there were 29 guarantee documents worth
Guarantee governments, SOEs, local SOEs) under PPP USD4.12 billion have been expired.
contracts/agreements
l The Maximum Guarantee Limit for the period 2020-2024 is set at 6% of GDP.
l Beginning in 2008 the Government has allocated a contingent budget with respect
l Infrastructure – Guarantee against infrastructure to these guarantees. Any unused budget allocation may be transferred to a
Political Risk risks for National Strategic Projects (Presidential guarantee reserve fund. This reserve fund, together with the relevant annual
Guarantee Decree No.58/2017) which are not covered by budget allocations, serves as reserves for any claim that arises from these
other type of guarantees guarantees.
*) MOF provides both credit guarantees and BVGs for 35GW program
**) Currency conversion of IDR14,105.01/USD1 and IDR17,330.13/EUR1 (as of end December 2020)
169
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
Viability Gap Fund Project Development Government/SOE (based on the policy of the
Facility (PDF) LCS
(VGF) Government) to the private sector to be
(Limited operated & managed.
Concession
Scheme) Scheme Characteristics
• Asset is owned by public sector

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

funds other than Government’s budget, e.g.
PINA long term management funds (insurance,
Availability Payment Financing from repatriated funds from tax amnesty, pension
Schemes PT. SMI and PT. IIF (Non-Government funds, etc.), private equity investors and
Budget infrastructure funds. Supported & facilitated by
Infrastructure National Development Planning
Financing) Ministry/Bappenas.
Those financial facilities were instrumental in supporting the execution of Scheme Characteristics
PPP projects, indicated by the signing of financial close
of the following PPP projects: • Asset is owned by private sector
• Greenfield / brownfield / operating projects
170
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 objective is to give stimulus to

The Government had issued the acceleration of local
Based on Government Regulation infrastructure development through
Ministry of Finance Regulation No
No. 95/2015 and Ministry of the ease of access to infrastructure
174 of 2016 to provide guarantee
Finance Regulation No. 232/2015,
to PT SMI on the assignment of financing and to boost local
Minister of Finance assigns PT SMI
regional infrastructure financing economic growth, as well as to
(Sarana Multi Infrastruktur) to carry
provision, by loan to local provide alternative financing
out functions in providing loan to
governments that is transferred schemes in order to meet local
local government, as previously
from PIP to PT SMI, and new loan infrastructure development needs
carried out by PIP (Government
channeled by PT SMI to the local
Investment Center). and to reduce reliance on
government.
state/local budget.
171
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Republic of Indonesia Presentation Book - February 2021

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Republic of Indonesia

Maintaining Stability and Supporting Growth,

Published by Investor Relations Unit – Republic of Indonesia

This Presentation Book also can be downloaded from: https://www.bi.go.id/en/iru/presentation/default.aspx

Economic Recovery Program Fiscal Policy Updates

The Job Creation Law Financing Policy Updates

…page 30-36 …page 74-89

GDP Q4-2020 Realization Bank Indonesia

1 Economic Recovery Program and Its Updates

Institutional and Governance Effectiveness:

Economic Factor: Monetary and Financial Factor:

Progressive Infrastructure Development:

Extension of the emergency status for COVID-19 until 29th

Permission for civil servants to work from home, while

Closing and limiting the mobility of Indonesian citizens

5 abroad and foreigners to enter Indonesian territory with

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

Fiscal Stimuli Phase 1 Fiscal Stimuli Phase 2

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

Discounted the price of aviation fuel at airports located

Subsidised or provided grants totalling IDR3.3 trillion to local

Regulates two topics:

State Financial Policy Stability of Financial System

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

Source: Coordinating Ministry for Economic Affairs 8

Source: Coordinating Ministry for Economic Affairs 9

Main Key Driving investment  Capacity utilization increases

Source: Coordinating Ministry for Economic Affairs

Health Sector Comittee Economy Sector

Government Responsibilities: 4. SME’s

Source: Coordinating Ministry for Economic Affairs 11

Need: Brake fluid Oil/Gas

Strong SEATBELT: Driver safety while driving

Source: Coordinating Ministry for Economic Affairs

Source: Coordinating Ministry for Economic Affairs

181,5 millions people Vaccinations are

Procurement of Vaccines “Gotong Royong” Vaccine

SINOVAC NOVAVAC COVAX ASTRAZENECA whose implementation is

Source: Coordinating Ministry for Economic Affairs 14

VACCINATION STAGE-1 VACCINATION STAGE-2

1,5 M Prospective Recipients

95,0% 56,7% Public Transportation

Source: Coordinating Ministry for Economic Affairs 15

Duration Fulfillment of Basic Needs for Self Isolation

Source: Coordinating Ministry for Economic Affairs 16

Realization 2020 Semester I Pre-Employment

Source: Ministry of Industry

TAX INVESTMENT SUPER DEDUCTION

• The criteria are new investment, Super Deduction Vocational

Source: Coordinating Ministry for Economic Affairs 20

MSMEs CREDIT RESTRUCTURING WORKING CAPITAL CREDIT

Source: Coordinating Ministry for Economic Affairs

Subsidizedloan Special scheme of

Source: Coordinating Ministry for Economic Affairs 22

4.97 Trade Balance (Billion USD) Demand for People's Business

Fintech Lending (Trillion IDR)

2018 2019 2020 JAWA L UOUTSIDE

Global Competitiveness Index1 Ease of Doing Business2

Worldwide Governance Indicators3 Corruption Perception Index4