Decision 448/QD-TTg 2022 approving the 2022-2024 three-year public debt management program

DECISION

Approving the 2022-2024 three-year public debt management program and the 2022 public loan borrowing and debt repayment plan^[1]

THE PRIME MINISTER

Pursuant to the June 19, 2015 Law on Organization of the Government; and the November 22, 2019 Law Amending and Supplementing a Number of Articles of the Law on Organization of the Government and Law on Organization of Local Administration;

Pursuant to the November 23, 2017 Law on Public Debt Management;

Pursuant to the June 25, 2015 Law on the State Budget;

Pursuant to the National Assembly’s Resolution No. 23/2021/QH15 of July 28, 2021, on the five-year national finance and public loan borrowing and debt repayment plan for the 2021-2025 period;

Pursuant to the National Assembly’s Resolution No. 34/2021/QH15 of November 13, 2021, on the 2022 state budget estimates; and Resolution No. 40/2021/QH15 of November 13, 2021, on allocation of the 2022 central budget funds;

Pursuant to the National Assembly’s Resolution No. 43/2022/QH15 of January 11, 2022, on fiscal and monetary policies in support of the Program on socio-economic recovery and development;

Pursuant to the Government’s Decree No. 91/2018/ND-CP of June 26, 2018, on the grant and management of government guarantee;

Pursuant to the Government’s Resolution No. 11/NQ-CP of January 30, 2022, on the Program on socio-economic recovery and development and implementation of the National Assembly’s Resolution No. 43/2022/ QH15 of January 11, 2022, on fiscal and monetary policies in support of the Program;

Pursuant to the Government’s Resolution No. 26/NQ-CP of March 7, 2022, approving the government guarantee limit and limit on loans to be on-lent in 2022;

After considering the Ministry of Finance’s Report No. 244/TTr-QLN of December 24, 2021, Report No. 59/TTr-QLN of March 25, 2022 on the 2022-2024 three-year public debt management program and the 2022 public loan borrowing and debt repayment plan, and Document No. 2588/BTC-TCNH of March 18, 2022, approving the 2022 bond issuance underwriting limit for the Vietnam Bank for Social Policies,

DECIDES:

Article 1. To approve the 2022 public loan borrowing and debt repayment plan and the tentative 2022-2024 three-year public debt management program, with the following principal contents:

1. Objectives:

a/ To fulfill the task of mobilizing debt capital through diversifying sources and methods of domestic and overseas borrowing in order to maintain the state budget balance, including mobilization of debt capital for the implementation of fiscal policies in support of the Program on socio-economic recovery and development.

b/ To closely control debt safety indicators within the limits approved by the National Assembly.

c/ To promote the development of the domestic capital market.

2. The tentative 2022-2024 three-year public debt management program:

a/ The Government’s loan borrowing and debt repayment

- The Government’s total loan amount in the 2022-2024 period will reach around VND 2,044 trillion at most, of which around VND 1,927 trillion will be for the state budget and around VND 117 trillion for on-lending.

- The Government’s total debt to be repaid in the 2022-2024 period will be around VND 1,116 trillion, of which around VND 971 trillion will be for direct debt repayment and around VND 145 trillion for repayment of on-lent loans.

- To take the initiative in arranging sources for fulfilling the Government’s debt repayment obligation, avoiding overdue debts that may affect the Government’s international commitments.

b/ Government guarantee

- The Government guarantee level must ensure that the growth rate of government-guaranteed outstanding loans does not exceed the gross domestic product growth rate of the previous year and remain within the National Assembly-approved government guarantee limit in the 2021-2025 period.

- For the 2 policy banks: The annual guarantee level for the Vietnam Development Bank in the 2022-2024 period must not exceed the obligation to pay principals of annual due government-guaranteed bonds (VND 15,737  billion); the guarantee level for the Vietnam Bank for Social Policies in the 2022-2024 period must not exceed the obligation to pay principals of annual due government-guaranteed bonds (VND 3,851 billion) plus the obligation to issue bonds for the implementation of policies on concessional loans specified in the National Assembly’s Resolution No. 43/2022/QH15 of January 11, 2022, on fiscal and monetary policies in support of the Program on socio-economic recovery and development (Resolution No. 43/2022/QH15), which will be up to VND 38,400 billion.

- To strictly control the grant of government guarantees for loans within the guarantee limit approved by competent authorities.

c/ Local administrations’ loan borrowing and debt repayment: To control the limit of local administrations’ budget deficit and debts in accordance with the 2015 Law on the State Budget, for which the local budget deficit in the 2022- 2024 period will be around 0.3% of annual GDP.

3. The 2022 public loan borrowing and debt repayment plan:

a/ The Government’s loan borrowing plan sets the loan limit of VND 673,546 billion, including:

- A loan amount of up to VND 646,849 billion to be borrowed for balancing the central budget of which an amount of up to VND 450,700 billion for offsetting the central budget deficit and VND 196,149 billion for repaying the loan principal.

- Loan amount for on-lending: VND 26,697 billion.

Capital shall be flexibly mobilized from (i) issuance of government bonds with an average term of under 9 years; in case of necessity, issuance of foreign-currency bonds will be reported to competent authorities for permission; (ii) borrowing of ODA loans and foreign concessional loans; and (iii) in case of necessity, borrowing loans from other lawful financial sources or issuance of government bonds directly to the State Bank of Vietnam.

b/ An amount of around VND 335,815 billion will be for Government’s debt repayment, of which VND 299,849 billion will be for direct debt repayment and VND 35, 966 billion for debt repayment by projects receiving on-lent loans.

c/ Loans guaranteed by the Government:

- An amount of up to VND 20,400 billion will be used for bond issuance underwriting for the Vietnam Bank for Social Policies (equal to the obligation to repay principals of due government-guaranteed bonds in the year which is VND 1,400 billion plus the issuance underwriting limit for the implementation of policies on preferential loans specified in Resolution No. 43/2022/QH15 which is up to VND 19,000 billion). In case the 2022 issuance underwriting limit for the implementation of policies on concessional loans specified in Resolution No. 43/2022/QH15 has not been used up, the Vietnam Bank for Social Policies may use it in 2023, ensuring that the total issuance amount in 2 years does not exceed VND 38,400 billion under Resolution No. 43/2022/QH15.

- The bond issuance underwriting level for the Vietnam Development Bank must not exceed the obligation to pay principals of due government-guaranteed bonds in the year. The bond issuance level for the Vietnam Development Bank shall be determined on the basis of the Ministry of Finance’s appraisal of dossiers of application for government-guaranteed bond issuance in accordance with the Government’s Decree No. 91/2018 /ND-CP of June 26, 2018, on the grant and management of government guarantee.

- For guarantees for domestic and overseas loans of enterprises, the withdrawn fund amount must not exceed the principal amount payable in the year.

d/ Local administrations’ loan borrowing and debt repayment plans:

- Around VND 28,637 billion will be borrowed from the Government’s foreign loans and other domestic sources.

- A total amount of VND 6,111 billion will be for local administrations’ debt repayment, including VND 3,637 billion for principal payment and VND 2,474 billion for interest payment.

dd/ Foreign commercial loans of enterprises that are not guaranteed by the Government:  The limit of medium and long-term foreign commercial loans of enterprises and credit institutions by the method of self-borrowing and self-repayment will be USD 7,300 million; the growth rate of short-term foreign outstanding loans will be around 25% compared to the outstanding loans as of December 31, 2021.

4. Organization of implementation

a/ Ministries, ministerial-level agencies, provincial-level People’s Committees shall:

- Continue to drastically and synchronously implement the guiding viewpoints, policies and solutions to restructure the state budget, manage public debts in order to ensure a safe and sustainable national finance as stated in the Politburo’s Resolution No. 07-NQ/TW of November 18, 2016, the Government’s Resolution No. 51/NQ-CP of June 19, 2017, promulgating the Government’s Action Program to implement the Politburo’s Resolution No. 07-NQ/TW, and the National Assembly’s Resolution No. 23/2021/QH15 of July 28, 2021, on the five-year national finance and public loan borrowing and debt repayment plan for the 2021-2025 period;

- Perform the tasks assigned to them under Resolution No. 43/2022/QH15 and the Government’s Resolution No. 11/NQ-CP of January 30, 2022, on the Program on socio-economic recovery and development and implementation of Resolution No. 43/2022/ QH15.

- For the Government’s foreign loans for implementation of programs and projects, urgently allocate their 2022 plans on central budget’s public investment according to the list and allocated fund amount of each project, and send plans on allocation of foreign funds to the Ministry of Planning and Investment and Ministry of Finance for implementation monitoring and disbursement control according to the budget estimates.

- The Ministry of Planning and Investment shall coordinate with the Ministry of Transport in arranging medium-term public investment plans for the 2021-2025 period and annual budget estimates from 2022 in order to promptly and fully perform the debt repayment obligation for foreign loans guaranteed by the Government of BT projects, thus preventing negative impacts on Vietnam’s national credit rating and the Government’s reputation. Ministries and sectors shall intensify coordination in the implementation of the Government’s commitments, avoiding ineffective coordination and failure to take full responsibility, leading to late repayment of debts.

- Perform the state management, and monitor, examine, supervise, inspect, report and provide information on public debts, the Government’s debts and debts of local administrations under regulations.

b/ The Ministry of Finance shall:

- Decide on structure of loans to be borrowed, domestic and overseas government bond issuance terms, associating the government bond issuance with restructuring of the debt portfolio and development of the government bond market.

- Flexibly use capital mobilized for the Program on socio-economic recovery and development and capital mobilized under five-year and annual national finance and public loan borrowing and debt repayment plans.

- Closely monitor targets set forth in the five-year plan on national finance and public loan borrowing and debt repayment for the 2021-2025 period; in case big changes or risks occur, assume the prime responsibility for reporting them to the Government and Prime Minister for further reporting to competent authorities for consideration and decision.

- Submit to the Prime Minister for approval of the maximum amount of government-guaranteed bonds to be issued for the Vietnam Development Bank in accordance with the Government’s Decree No. 91/2018/ND-CP of June 26, 2018, on the grant and management of government guarantee, this Decision and the scheme on issuance of government bonds of the Vietnam Development Bank.

- Notify the maximum amount of government-guaranteed bonds to be issued, and direct and supervise the Vietnam Bank for Social Policies in mobilization of capital from the bond issuance in accordance with law.

- Continue to promote the development of the domestic capital market and the government bond market in both width and depth toward diversifying products and investor base, prioritizing the development of long-term investors and attraction of the participation of foreign investors in the capital market and the bond market.

- Research and proceed to applying the method of making statistics on foreign debts of the public and private sectors according to the principle of identification of places of residence of creditors in order to be more consistent with international standards; and at the same time, monitor foreign debt targets based on the foreign currency criterion to manage exchange rate risks.

- Improve the public debt management capacity and efficiency in accordance with the 2017 Law on Public Debt Management, focusing on the establishment of professional and modern public debt management agencies in accordance with international practice as directed in the Politburo’s Resolution No. 07-NQ/TW; and improve qualifications of public servants in charge of debt management.

c/ The State Bank of Vietnam shall:

- Closely control the implementation of self-borrowing and self-repayment foreign debt limit of enterprises that are not guaranteed or secured by the Government, ensuring compliance with the approved limit.

- Coordinate with the Ministry of Finance in conducting research and proceeding to renew methods and tools for management and making of statistics on the country’s foreign debts in the direction of separating the management of foreign debts of the public sector (Government’s debts and government-guaranteed debts) from self-borrowing and self-repayment debts of enterprises and credit institutions in conformity with international practices and development requirements of the economy.

- Coordinate with the Ministry of Finance in mobilizing of capital for the Program on socio-economic recovery and development and five-year and annual national finance and public loan borrowing and debt repayment plans.

d/ The Vietnam Bank for Social Policies shall:

- Fully fulfill the debt (principal and interest) repayment obligation regarding government-guaranteed bonds of 2022.

- Decide on and take responsibility for to-be-issued amount, structure and term of issuance of government-guaranteed bonds according to the assigned level in order to balance funds for operation in accordance with disbursement schedules stated in policies on concessional loans specified in Resolution No. 43/2022/QH15 and the Government’s Resolution No. 11/NQ-CP of January 30, 2022, and at the same time, improve credit quality and use borrowed loans in accordance with law.

5. Funds for implementation of the 2022-2024 three-year public debt management program:

a/ Funds for the implementation of programs and tasks shall be arranged from the state budget, raised from foreign donors, on-lending charge allowed to be used and credited guarantee charge in accordance with the 2017 Law on Public Debt Management, Decree No. 91/2018/ND-CP of June 26, 2018, on the grant and management of government guarantee, Decree No. 94/2018/ND-CP of June 30, 2018, on public debt management operation, the Prime Minister’s Decision No. 05/2016/QD -TTg of February 5, 2016, on the management and use of on-lending charge and the deduction of guarantee charge at the Ministry of Finance in the 2016-2020 period, and the Prime Minister’s Decision No. 11/2021/QD-TTg of March 17, 2021, on extension of the time limit for implementation of particular financial mechanisms for a number of state administrative agencies and units.

b/ The Ministry of Finance shall assume the prime responsibility for, and coordinate with related units in, summarizing and balancing funds into annual state budget estimates for the implementation of the Program.

Article 2. This Decision takes effect on the date of its signing.

Article 3. Ministers, heads of ministerial-level agencies, heads of government-attached agencies, chairpersons of provincial-level People’s Committees, and the President of the Vietnam Bank for Social Policies shall implement this Decision.-

For the Prime Minister
Deputy Prime Minister
LE MINH KHAI