Decree No. 94/2018/ND-CP dated July 25, 2018 of the Government on public debt management operations

DECREE

On public debt management operations^[1]

Pursuant to the June 19, 2015 Law on Organization of the Government;

Pursuant to the May 26, 2015 Law on the State Budget;

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

At the proposal of the Minister of Finance;

The Government promulgates the Decree on public debt management operations.

Chapter I

GENERAL PROVISIONS

Article 1.Scope of regulation

This Decree prescribes public debt management operations, including public debt safety indicators; formulation and implementation of five-year plans on borrowing and repayment of public debts, three-year programs on management of public debts, and annual plans on borrowing and repayment of public debts; management of public debt portfolio risks; and reporting and disclosure of information on public debts.

Article 2.Subjects of application

This Decree applies to the Ministry of Finance, ministries, ministerial-level agencies, government-attached agencies, provincial-level People’s Committees, and organizations and individuals engaged in public debt management.

Article 3.Interpretation of terms

In addition to the terms interpreted in Article 3 of the Law on Public Debt Management, the following terms are construed as follows:

1. Disclosure of information on public debts means the provision of information and data on public debts to the public in accordance with law.

2. Managing agency means a ministry, ministerial-level agency, government-attached agency, or provincial-level People’s Committee.

3. Public debt management tools include public debt management indicators, five-year plans on borrowing and repayment of public debts, three-year programs on management of public debts, and annual plans on borrowing and repayment of public debts.

4. Public debt portfolio risks means risks which might occur to the public debt portfolio when there are changes related to the market, credit, liquidity, exchange rate or interest rate or occur in the process of raising funds, using loans and repaying debts by the Government.

5. ODA loan and foreign concessional loan on-lending limit means the maximum level of ODA loans and foreign concessional loans to be borrowed by the Government for on-lending to provincial-level People’s Committees, enterprises and public non-business units in 1 year or 5 years, which shall be determined to be the actually received loan amount minus the paid principal amount.

6. Limit of medium- and long-term foreign loans borrowed by the mode of self-borrowing and self-repayment means the limit of medium- and long-term commercial loans borrowed by enterprises, financial institutions, credit institutions, foreign bank branches, cooperatives and cooperative unions, which shall be determined to be the actually received loan amount minus the paid principal amount in the limit calculation period.

7. Debt rescheduling means the permission to extend the committed repayment period and during the extension period the borrower/sub-borrower still has to pay loan interests.

8. Debt rollover means the raising of funds to repay part or the whole of an outstanding loan ahead of schedule.

9. Debt swap means the concurrent sale and purchase of 2 or more debts of a single issuer at a time with a view to restructuring the debt portfolio.

10. Debt repurchase means that a borrower or debt instrument issuer purchases the whole or part of its debt.

Chapter II

FORMULATION AND IMPLEMENTATION OF PUBLIC DEBT SAFETY INDICATORS

Article 4.Public debt safety indicators

1. Public debt safety indicators are prescribed in Clause 1, Article 21 of the Law on Public Debt Management, including:

a/ Public debt-to-gross domestic product ratio;

b/ Government debt-to-gross domestic product ratio;

c/ Ratio of the Government’s direct liability to repay debts (excluding on-lent loans) to the total annual state budget revenue;

d/ National foreign debt-to-gross domestic product ratio;

dd/ National foreign debt repayment liability-to-total goods and service export value ratio.

2. Public debt ceiling and public debt warning threshold:

a/ Public debt ceiling is the maximum percentage rate of public debt safety indicators prescribed in Clause 1 of this Article;

b/ Public debt warning threshold is the limit of public debt safety indicators which is just below the public debt ceiling and requires solutions for controlling such indicators within the ceiling level decided by the National Assembly.

Article 5.Grounds for formulation of public debt safety indicators

1. Orientations of the five-year socio-economic development plan.

2. Implementation of public debt safety indicators in the previous five years.

3. Growth rate and internal saving rate of the economy.

4. Revenue and expenditure balances, state budget deficit, balance between the demand for loans and debt repayment capacity; foreign currency balance; demand for and structure of social investment funds; and other macroeconomic balances.

5. The situation of and capacity for raising funds at home and abroad.

6. International experiences and practices in the formulation of public debt safety indicators.

Article 6.Formulation of public debt safety indicators

1. The Ministry of Finance shall assume the prime responsibility for, and coordinate with related agencies in, determining the ceiling levels and warning thresholds of public debt safety indicators and report them to the Government for submission to the National Assembly for consideration and decision in the national five-year financial plan.

2. The Ministry of Finance shall assume the prime responsibility for, and coordinate with the State Bank of Vietnam in, formulating the indicators of national foreign debt-to-gross domestic product ratio and national foreign debt repayment liability-to-total goods and service export value ratio.

Article 7.Supervision of the implementation of public debt safety indicators

1. The Ministry of Finance shall assume the prime responsibility for, and coordinate with the State Bank of Vietnam and related agencies in, summarizing and evaluating the implementation of public debt safety indicators for reporting to the Government in annual plans on borrowing and repayment of debts for the latter to report them to the National Assembly and National Assembly Standing Committee in annual reports on performance of financial and budgetary tasks.

2. When a public debt safety indicator reaches the warning threshold, the Ministry of Finance shall propose the Government to implement, or to report the National Assembly or National Assembly Standing Committee, measures for keeping such  indicator within the ceiling level decided by the National Assembly. Such measures include:

a/ Reducing the ODA and foreign concessional loan on-lending limit;

b/ Reducing the government guarantee limit;

c/ Reducing the local administration debt limit;

d/ Reducing state budget deficit so as to reduce the government debt limit.

3. After applying the measures prescribed in Clause 2 of this Article, if the public debt safety indicator still exceeds the ceiling level decided by the National Assembly, the Ministry of Finance shall assume the prime responsibility for, and coordinate with related ministries in reporting to the Government for the latter to submit to the National Assembly for decision measures and roadmaps for adjusting the five-year plan on borrowing and repayment of public debts or adjusting the public debt ceiling level in accordance with the Law on Public Debt Management.

Chapter III

FORMULATION AND IMPLEMENTATION OF PLANS ON BORROWING AND REPAYMENT OF PUBLIC DEBTS

Section 1

FIVE-YEAR PLANS ON BORROWING AND REPAYMENT OF PUBLIC DEBTS

Article 8.Grounds for formulation of a five-year plan on borrowing and repayment of public debts

1. The implementation of the previous period’s socio-economic development plan, five-year national financial plan, medium-term public investment plan, and five-year plan on borrowing and repayment of public debts.

2. Objectives, targets and orientations for socio-economic development, finance-state budget, public investment and macroeconomic balances under resolutions of the National Assembly.

3. Legal provisions on finance-state budget, public debts, public investment, monetary issues, and credit.

4. The Government’s viewpoints and directions on formulation of socio-economic development plans, five-year national financial plans, and medium-term public investment plans.

5. The implementation of existing loan agreements and debt instruments; demand for loans and forecasts about developments at home and abroad which may affect the capacity of raising funds under loan agreements and issuance of debt instruments in the five-year planning period.

Article 9.Order of formulation of a five-year plan on borrowing and repayment of public debts

1. Provincial-level People’s Committees shall formulate five-year plans on borrowing and repayment of local administration debts then send them to the Ministry of Finance according to the Government’s regulations on management of local administration debts for the latter to include them in the five-year plan on borrowing and repayment of public debts.

2. Ministries and ministerial-level agencies acting as managing agencies of programs and projects funded with public debts shall evaluate their management and use of public debts in the previous five-year period and project their demand for use of public debts in the subsequent five-year period, then send them to the Ministry of Finance for inclusion in the five-year plan on borrowing and repayment of public debts.

3. The Ministry of Finance shall assume the prime responsibility for, and coordinate with ministries, sectors and localities in, formulating the five-year plan on borrowing and repayment of public debts for the subsequent period, then submit it to the Prime Minister together with the five-year national financial plan.

4. Based on the Prime Minister’s opinions, the Ministry of Finance shall assume the prime responsibility for, and coordinate with ministries, sectors and localities in, finalizing the five-year plan on borrowing and repayment of public debts for the subsequent period before reporting it to the Government for submission together with the five-year national financial plan to the National Assembly Standing Committee and National Assembly’s agencies.

5. Based on opinions of the National Assembly Standing Committee and National Assembly’s agencies, the Ministry of Finance shall finalize the five-year plan on borrowing and repayment of public debts for the subsequent period before reporting it to the Prime Minister for submission together with the five-year national financial plan to the National Assembly.

Article 10.Implementation of a five-year plan on borrowing and repayment of public debts

1. Each provincial-level People’s Committee shall direct local specialized agencies to implement its five-year plan on borrowing and repayment of local administration debts,  ensuring that:

a/ The total level of loans borrowed and debts repaid by the local administration in the five-year period is within the limit decided by the provincial-level People’s Council;

b/ Funding sources for full and timely repayment of debts are available.

2. The Ministry of Finance shall assume the prime responsibility for monitoring, summarizing and evaluating the borrowing and repayment of public debts in the five-year period:

a/ To ensure that the total loans borrowed and debts repaid in the five-year period are within the limit decided by the National Assembly;

b/ To report to the Government for submission to the National Assembly and National Assembly Standing Committee the solutions prescribed in Clause 2, Article 7 of this Decree;

c/ To report to the Government adjustments to the five-year plan on borrowing and repayment of public debts (if necessary) for submission to the National Assembly and National Assembly Standing Committee.

3. Ministries, sectors, provincial-level People’s Committees and related agencies shall coordinate with the Ministry of Finance in formulating and implementing five-year plans on borrowing and repayment of public debts.

Section 2

THREE-YEAR PROGRAMS ON PUBLIC DEBT MANAGEMENT

Article 11.Grounds for formulation of three-year programs on public debt management

1. The implementation of the socio-economic plan, state budget estimates and the plan on borrowing and repayment of public debts in the current year.

2. The five-year plan on borrowing and repayment of public debts (in case the term of the three-year program falls within a five-year planning period) or objectives and orientations for public debt management in the subsequent five-year period (in case the term of the three-year program belongs to two five-year planning periods).

3. Forecasts about socio-economic, state budget and public investment indicators in the three-year planning period; developments of the domestic and international capital markets related to the forecasts made in the process of formulating the three-year public debt management program of the preceding period.

Article 12.Order of formulation of a three-year program on public debt management

1. Each provincial-level People’s Committee shall formulate a three-year program on management of local administration debts and send it to the Ministry of Finance according to the Government’s regulations on management of local administration debts for inclusion in the three-year program on public debt management.

2. The Ministry of Finance shall formulate a three-year program on public debt management and submit it to the Prime Minister together with the three-year finance-state budget plan in accordance with the law on the state budget.

3. Ministries, sectors and related agencies shall provide the Ministry of Finance with information and reports to serve the formulation of the three-year program on public debt management.

4. Based on the three-year finance-state budget plan already reported to the National Assembly and annual state budget estimates decided by the National Assembly, the Ministry of Finance shall assume the prime responsibility for finalizing the three-year program on public debt management, specifying the government guarantee limit and on-lending limit for each planning year, then submit it together with the annual plan on borrowing and repayment of public debts to the Government and the Prime Minister for decision.

Article 13.Implementation of a three-year program on public debt management

1. Each provincial-level People’s Committee shall direct local specialized agencies to implement its three-year program on management of local administration debts, including:

a/ Formulating a three-year debt management program in conformity with realities; evaluating the implementation in the current year and giving forecasts for the subsequent 2 years;

b/ Prioritizing disbursement of on-lent ODA loans and foreign concessional loans; restricting the borrowing in the form of bond issuance (commercial loans).

2. The Ministry of Finance shall assume the prime responsibility for, and coordinate with ministries, sectors and localities in, implementing the three-year public debt management program, ensuring compliance with the following regulations:

a/ To implement the borrowing and repayment of debts in conformity with the five-year plan on borrowing and repayment of public debts decided by the National Assembly;

b/ To assess the conformity of the structure of public debts, including government debts, local administration debts and government-guaranteed debts, with debt safety indicators;

c/ To evaluate the implementation of the three-year public debt management program and give appropriate recommendations so as to maintain public debt safety indicators within the ceiling levels and warning thresholds.

Section 3

ANNUAL PLANS ON BORROWING AND REPAYMENT OF PUBLIC DEBTS

Article 14.Contents of annual plans on borrowing and repayment of public debts

1. A plan on borrowing and repayment of government debts includes:

a/ A borrowing plan, specifying the issuance of debt instruments in the domestic market, borrowing of ODA loans and foreign concessional loans, issuance of government bonds in the international capital market, and raising of funds from other sources in accordance with the law on the state budget;

b/ A plan on use of loans, specifying the offsetting of the central budget deficit, repayment of loan principals upon maturity, restructuring of government debts and on-lending of ODA loans and foreign concessional loans to provincial-level People’s Committees, public non-business units and enterprises;

c/ A debt repayment plan, specifying the repayment of loan principals, interests, charges and expenses related to loans and issued debt instruments, including plans on repayment of directly borrowed and on-lent loans.

2. A plan on borrowing and repayment of local administration debts includes:

a/ A borrowing plan, specifying the borrowing of foreign loans on-lent by the Government, issuance of local administration bonds, borrowing from state policy banks, the state cash fund, credit institutions and other domestic sources in accordance with the Law on Management of Public Debts and the law on the state budget;

b/ A plan on use of loans by the local administration, specifying the offsetting of the local budget deficit and repayment of loan principals upon maturity;

c/ A plan on repayment of debts by the local administration, specifying the repayment of principals, interests, charges and expenses related to loans borrowed from each sources and identification of funding sources for debt repayment.

3. ODA loan and concessional loan on-lending limits and government guarantee limits include:

a/ The limit of loans borrowed for on-lending, including the limit of loans on-lent to local administrations and the limit of loans on-lent to public non-business units and enterprises;

c/ Annual government guarantee limits, including the limits of guarantee for bond issuance by the Vietnam Development Bank and Vietnam Bank for Social Policies; and guarantee for domestic and foreign loans borrowed by enterprises.

Article 15.Grounds for formulation of an annual plan on borrowing and repayment of public debts

1. The five-year plan on borrowing and repayment of public debts; the three-year program on public debt management.

2. Tasks of raising funds to offset the state budget deficit, borrowing new loans to pay principals of outstanding loans under the state budget estimates decided by the National Assembly.

3. The developments of the domestic and foreign capital markets; estimated interest rates, exchange rates and demand for restructuring government debts in the planning year.

4. Local budgets’ outstanding loan and deficit limits prescribed by the law on the state budget.

5. The implementation of the current year’s plan on borrowing and repayment of public debts and demands for borrowing loans for programs and projects of ministries, sectors, localities, on-lending beneficiaries and entities eligible for government guarantee.

Article 16.Order of formulating and deciding on annual plans on borrowing and repayment of public debts

1. Annually, when making state budget estimates, ministries, sectors, ministerial-level agencies and government-attached agencies acting as managing agencies shall direct project owners under their management to formulate plans on fund disbursement and use for each program or project and submit them to the former for summarization and submission to the Ministry of Finance.

2. Provincial-level People’s Committees shall formulate plans on borrowing and repayment of local administration debts in accordance with the Government’s Decree on management of local administration debts.

3. On-lending beneficiaries and entities eligible for guarantee shall formulate borrowing and debt repayment plans for on-lent loans and government-guaranteed loans and send them to the Ministry of Finance for determining ODA loan and concessional loan on-lending limits and government guarantee limits according to the Government’s Decree on management of on-lending of ODA loans and foreign concessional loans and Decree on grant and management of government guarantee, and submitting them to the Government for decision.

4. The Ministry of Finance shall formulate the total borrowing and debt repayment levels of the central budget and include local budgets’ borrowing and debt repayment levels into the state budget estimates and report them to the Government for submission to the National Assembly for decision.

5. Based on the state budget’s annual borrowing and debt repayment levels decided by the National Assembly and ODA loan and foreign concessional loan on-lending limits and government guarantee limits decided by the Government, the Ministry of Finance shall formulate annual plans on borrowing and repayment of public debts and report them to the Prime Minister for decision.

6. Based on the annual plans on borrowing and repayment of public debts approved by the Prime Minister, ministries, sectors and localities shall organize the borrowing and repayment of public debts, ensuring compliance with the approved limits.

Article 17.Formulation and administration of national foreign debt indicators

1. The State Bank of Vietnam shall summarize demands for borrowing and repayment of short-, medium- and long-term foreign loans by the mode of self-borrowing and self-repayment, propose the maximum short-term outstanding loan growth rate and the limits of short-, medium- and long-term foreign loans borrowed by the mode of self-borrowing and self-repayment and send them to the Ministry of Finance for inclusion in the annual plan on borrowing and repayment of public debts for submission to the Prime Minister for approval.

2. Based on the Prime Minister’s decision, the Ministry of Finance and the State Bank of Vietnam shall manage and supervise national foreign debt indicators, specifically:

a/ The Ministry of Finance shall manage and supervise the Government’s foreign debts and government-guaranteed foreign debts, ensuring that they are kept within the approved limits;

b/ The State Bank of Vietnam shall manage and supervise foreign debts borrowed by the mode of self-borrowing and self-repayment in accordance with the law on management of the borrowing and repayment of foreign debts by enterprises without government guarantee, ensuring that they are kept within the approved limits.

3. Pending the approval of the borrowing limit for the planning year, the Ministry of Finance and State Bank of Vietnam shall, based on the practical situation, determine whether a loan lies within the annual borrowing limit, provided that the accumulative net debt at the time of certification does not exceed 50% of the borrowing limit of the preceding year.

Article 18.Implementation of annual plans on borrowing and repayment of public debts

1. Provincial-level People’s Committees shall direct their specialized agencies to implement annual plans on borrowing and repayment of local administration debts, ensuring compliance with the following regulations:

a/ The borrowing and repayment of debts must be conducted under annual plans on borrowing and repayment of debts decided by the National Assembly and provincial-level People’s Councils;

b/ The outstanding loan amount in the year must not exceed the limit prescribed in Clause 6, Article 7 of the Law on the State Budget and relevant guiding documents;

c/ There must be funding sources for full and timely repayment of debts.

2. The Ministry of Finance shall coordinate with ministries, sectors and localities in implementing annual plans on borrowing and repayment of debts, ensuring compliance with the following regulations:

a/ The total level of government borrowing and repayment to balance the state budget must comply with the state budget estimates approved by the National Assembly;

b/ Investment funds from the source of foreign loans must be disbursed according to state budget estimates;

c/ The on-lending limit and government guarantee limit approved by the Government must be complied with.

Chapter IV

MANAGEMENT OF THE RAISING AND USE OF LOANS AND DEBT REPAYMENT

Article 19.Management of the raising of loans

1. Issuance of debt instruments in the domestic market must comply with the following regulations:

a/ The issuance must be conducted under an issuance plan decided by competent authorities;

b/ The Ministry of Finance shall, on behalf of the Government, issue government debt instruments or authorize the State Treasury to do so. Provincial-level People’s Committees shall issue local administration bonds.

c/ The issuance must comply with the law on issuance, registration, depositing, listing and trading of debt instruments in the securities market.

2. The issuance of government bonds in the international capital market must comply with the following provisions:

a/ The issuance must be conducted under a scheme on issuance of government bonds in the international capital market approved by the Government;

b/ The issuance must comply with the law of the issuing market;

c/ International bonds shall be issued only to offset the central budget deficit for development investment in accordance with the Law on the State Budget or to restructure government debts. The Government’s international bonds may not be issued for on-lending purpose.

3. The borrowing of foreign loans under loan agreements must comply with the following regulations:

a/ Loans may only be borrowed for development investment, not for current expenditures;

b/ New loans must be evaluated in terms of grant elements and impacts on the borrowing limit and public debt safety indicators in accordance with the Law on Public Debt Management;

c/ Project proposals must be approved by the Prime Minister, clearly stating the financial mechanism applicable to each program or project using loans (allocation or on-lending);

d/ The negotiation and conclusion of loan agreements must ensure that programs or projects using foreign loans have obtained investment decisions of competent authorities. The negotiation, conclusion and approval of loan agreements which are treaties to be signed in the name of the State shall be reported by the Prime Minister to the President; for those to be signed in the name of the Government, the Prime Minister shall decide on and direct the negotiation and conclusion.

4. Loans borrowed from other financial sources must comply with the following regulations:

a/ The borrowing must be decided by competent authorities in accordance with the Law on Public Debt Management;

b/ The form of borrowing must comply with competent authorities’ decisions or loan agreements;

c/ Loan amounts, terms, interest rates and expenses related to loans, repayment methods and period, debt rescheduling and late-payment interests (if any), rights and responsibilities of related parties and other terms and conditions related to the borrowing must be clearly identified.

Article 20.Management of the use of loans

1. Domestic loans shall be used for the following purposes:

a/ To offset central and local budget deficits;

b/ To offset temporary shortage of the central budget and ensure liquidity of the government bond market;

c/ To pay principals upon maturity of debts owed by the central budget and local budget; to restructure government debts.

2. The Government’s foreign loans shall be used for the following purposes:

a/ To offset the central budget deficit, specifically:

- To be allocated to development investment programs and projects which are spending tasks of the central budget;

- Foreign loans in cash shall be channeled into the state budget for development investment.

b/ To be on-lent to provincial-level People’s Committees, enterprises, and public non-business units as prescribed in the Government’s Decree on on-lending of ODA loans and foreign concessional loans.

3. Loan estimation:

a/ Ministries, sectors and localities shall prepare loan estimates together with state budget estimates in accordance with the Law on the State Budget and send them to the Ministry of Finance and Ministry of Planning and Investment for sum-up;

b/ The Ministry of Finance and Ministry of Planning and Investment shall sum up loan estimates and report them to competent authorities for approval in accordance with the law on the state budget.

4. Arrangement of domestic counterpart funds:

a/ Annual financial plans must be made for programs and projects funded with the Government’s foreign loans. Such a financial plan must cover a plan on borrowing of foreign loans (classified by country or donor) and a plan on arrangement of domestic counterpart funds;

b/ For programs and projects funded with the Government’s foreign loans and entitled to allocation of the whole loan amounts, domestic counterpart funds shall be arranged within annual state budget estimates of their managing agencies in accordance with regulations on decentralization of state budget management and from other financial sources in accordance with law;

c/ For programs or projects which are entitled to on-lending of the whole or part of the Government’s foreign loan amounts, project owners shall allocate domestic counterpart funds from their equity or other lawful funding sources.

5. The Ministry of Finance shall guide in detail the financial mechanism applicable to programs and projects funded with the Government’s foreign loans.

Article 21.Organization of debt repayment

1. For government debts:

a/ The Ministry of Finance shall arrange funds from the central budget for debt repayment;

b/ The Ministry of Finance shall fully and timely pay principals, interests and related expenses;

c/ For loans borrowed for on-lending, the Ministry of Finance and agencies authorized by the Ministry of Finance to on-lend such loans shall fully and timely recover principals, interests and related expenses.

2. For local administration debts:

a/ Provincial-level People’s Committees shall arrange local budget funds for debt repayment;

b/ Provincial-level People’s Committees shall fully and timely pay principals, interests and related expenses.

3. For government-guaranteed debts:

a/ Entities eligible for government guarantee shall fully perform debt repayment obligations according to loan agreements signed with lenders and government guarantee agreements;

b/ The obligations of the guarantors and responsibilities of entities eligible for guarantee in debt repayment must comply with the Government’s Decree on grant and management of government guarantee.

Chapter V

MANAGEMENT OF PUBLIC DEBT RISKS

Article 22.Risk management objectives

1. To ensure a reasonable public debt structure which is suitable to the objectives and orientations set forth in the five-year plan on borrowing and repayment of public debts decided by the National Assembly.

2. To ensure debt repayment capacity in the medium term and improve the effectiveness of public debt management.

3. To minimize damage which might occur in the worst circumstance at reasonable expenses.

Article 23.Risk handling principles

1. The consideration and handling of risks shall be conducted on a case-by-case basis based on the degree of loss which might occur and on the causes of risks.

2. The prevention and handling of risks shall be based on loan agreements or original debt instruments in the current public debt portfolio and causes of risks and conform with Vietnamese laws and international practices.

3. The prevention of public debt portfolio risks shall be conducted in conformity with the five-year plan on borrowing and repayment of public debts, three-year programs on public debt management and annual borrowing and repayment plans.

4. Organizations and individuals that use loans for improper purposes, deliberately act against regulations, thus giving rise to public debt risks, shall handle such risks and pay compensation for damage in accordance with law.

Article 24.Identification of risks

1. Public debt risks include:

a/ Interest-rate and exchange-rate risks which occur due to changes in the financial market;

b/ Liquidity risks which occur due to shortage of liquidable financial assets for full and timely performance of debt obligations upon maturity as committed, covering the debt repayment capacity of the central budget and local budgets;

c/ Risks which occur due to changes in the financial market that affect the raising of funds, thus leading to debt roll-over at high cost or loss of the debt roll-over ability;

d/ Credit risks which occur because on-lending beneficiaries or entities eligible for guarantee fail to fully and timely repay debts;

dd/ Other risks which may affect public debt safety.

2. The management of credit risks for on-lending beneficiaries and entities eligible for government guarantee must comply with the Government’s Decree on on-lending of ODA loans and foreign concessional loans and Decree on grant and management of government guarantee.

Article 25.Risk assessment

1. Major contents of risk assessment:

a/ Analysis of the macroeconomic, fiscal and monetary issues, exchange rates, interest rates and changes in the domestic and international capital markets affecting public debts;

b/ Analysis and assessment of current and future developments in the currency structure, interest rates, terms and scales, public debt repayment obligations so as to identify the degree of risks and work out appropriate handling measures;

c/ Calculation of the degree of risks, estimation of costs for prevention and handling of risks.

2. Risk assessment shall be conducted as follows:

a/ The Ministry of Finance shall assess risks to public debts, including government debts, local administration debts and government-guaranteed debts;

b/ Provincial-level People’s Committees shall assess risks to local administration debts, including on-lent ODA loans and concessional loans, local administration bonds and other debts of local administrations.

3. Risk assessment shall be conducted periodically in association with five-year plans on borrowing and repayment of public debts, three-year programs on public debt management and annual plans on borrowing and repayment of public debts.

4. On the basis of risk assessment results, the Ministry of Finance shall propose solutions for preventing risks to public debts; provincial-level People’s Committees shall propose solutions for preventing risks to local administration debts.

Article 26.Measures for preventing and handling risks

1. For risks related to interest rates and exchange rates, to use interest-rate and currency derivative instruments.

2. For liquidation risks, to arrange funding sources for full and timely repayment of debts in accordance with Article 54 of the Law on Public Debt Management; to issue debt instruments so as to ensure liquidation; to restructure terms of debts, repurchase debts, swap debts or negotiate for debt rescheduling.

3. For risks due to financial market changes, to develop the domestic capital market; to raise the national credit rating so as to access the international capital market.

4. Based on risk assessment results and the degree of risk to each debt or debt portfolio, the Ministry of Finance shall formulate a debt restructuring scheme and report it to the Prime Minister for decision, then organize its implementation; provincial-level People’s Committee shall report People’s Councils of the same level to decide on debt restructuring plans of local administrations for decision, then organize its implementation.

Chapter VI

REPORTING AND DISCLOSURE OF INFORMATION ON PUBLIC DEBTS

Article 27.Reporting on public debts

1. Principles of making reports on public debts:

a/ Ensuring truthfulness, objectivity, accuracy, completeness and promptness;

b/ For information not on the list of state secrets to be protected, organizations and individuals may provide them to the Ministry of Finance in written form, via fax or in electronic form;

c/ For information on the list of state secrets to be protected, organizations shall provide them to the Ministry of Finance in accordance with the law on protection of the state secrets.

2. Responsibilities to report on public debts:

a/ Annually or when requested, the Ministry of Finance shall assume the prime responsibility for, and coordinate with related agencies in, reporting on public debts to the Government for further reporting to the National Assembly, National Assembly Standing Committee and President in accordance with Article 60 of the Law on Public Debt Management;

b/ Provincial-level People’s Committees shall report on local administration debts to provincial-level People’s Councils, the Ministry of Finance and competent agencies under Clause 3, Article 60 of the Law on Public Debt Management;

c/ The State Bank of Vietnam shall make reports on loans borrowed by enterprises and credit institutions by the mode of self-borrowing and self-payment and send them to the Ministry of Finance for summarization and reporting on national foreign debts;

d/ Ministries and ministerial-level agencies shall report on the management and use of loans by programs and projects under their management;

dd/ On-lending agencies and beneficiaries shall make reports in accordance with the Government’s Decree on on-lending of ODA loans and foreign concessional loans;

e/ Entities eligible for government guarantee shall make reports according to the Government’s Decree on grant and management of government guarantee.

3. The Minister of Finance shall stipulate in detail forms of reports on public debt information.

Article 28.Disclosure of information on public debts

1. The disclosure of information on public debts must meet updating requirements prescribed in Article 61 of the Law on Public Debt Management.

2. Provincial-level People’s Committee chairpersons shall organize the supervision of local administration debts and select appropriate forms of disclosing information on local administration debts in accordance with law.

3. The Minister of Finance shall guide the comparison and certification of data on public debts and other related data among ministries, sectors and localities; provide forms of reports for uniform application, ensure that information is timely and fully updated so as to serve the periodical issuance of public debt bulletins in accordance with law.

Chapter VII

IMPLEMENTATION PROVISION

Article 29.Effect

1. This Decree takes effect on July 1, 2018.

2. The Government’s Decree No. 79/2010/ND-CP of July 14, 2010, on public debt management operations and the Prime Minister’s Decision No. 56/2012/QD-TTg of December 21, 2012, on the Regulation on management and handling of risks to public debt portfolios cease to be effective on the effective date of this Decree.

3. Pending the issuance of new regulations, the reporting on and disclosure of information on public debts and national foreign debts will still comply with the Ministry of Finance’s Circular No. 126/2017/TT-BTC of November 27, 2017.

Article 30.Implementation responsibility

Ministers, heads of ministerial-level agencies, heads of government-attached agencies, chairpersons of provincial-level People’s Committees and related enterprises, organizations and individuals shall implement this Decree.-

On behalf of the Government
Prime Minister
NGUYEN XUAN PHUC