By creating demand, budget realization can also be increased
Jakarta (ANTARA) - Governor of Bank Indonesia, Perry Warjiyo, has urged state budget (APBN) and regional budget (APBD) spending, particularly for supporting micro, small and medium enterprises (MSMEs) and domestic production to boost demand under the economic recovery program.



"By creating demand, budget realization can also be increased," he said during a virtual working meeting with Commission XI of the House of Representatives in Jakarta on Monday.



Of the Rp695.2 trillion allocated by the government under the Handling COVID-19 and National Economic Recovery (PC-PEN) program, Rp123.46 trillion has been earmarked to support MSMEs, he noted.



BI and the government are sharing the burden of supporting the PEN program, namely, by allocating Rp177 trillion for stimulus spending on non-public goods, he said.



The allocation under the non-public goods stimulus comprises MSME support of Rp123.46 trillion and corporate financing of Rp53.6 trillion.



"Of the Rp177 trillion non-public goods (budget) for MSMEs and corporations, only Rp44.3 trillion for MSMEs has been realized, even though we have allocated Rp177 trillion and we are ready to share the burden," he pointed out.



The PC-PEN Committee had earlier revealed that as of September 16, 2020, allocation under the corporate financing program was still at zero percent, but 92 percent or around Rp49 trillion of the total figure is targeted to be realized by the end of this year.



Under the burden-sharing scheme, the government would only bear a three-month reverse repo minus one percent, or about 2.7 to 2.8 percent, Perry informed.



Meanwhile, the central bank, he said, would bear the burden by calculating the yield on government securities (SBN) in the market, which is currently at 6.8 percent minus 2.7-2.8 percent.



BI, he said, is also encouraging MSMEs to move up in class, including by fostering MSMEs, linking them with businesses, including online traders, introducing financial technology and encouraging the digitization of MSMEs, in line with the Proudly Made Indonesia program.



BI is also promoting open banking services, or open banking through a barcode or QRIS application-based payment system, he added. (INE)

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Translator: Dewa Ketut, Azis Kurmala
Editor: Fardah Assegaf
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