Directorate of Government Debt Securities Directorate General of Budget Financing and Risk Management Ministry of Finance of The Republic of Indonesia

Government Securities Management April 14, 2015

OUTLINE

1. Government Securities Management and Financing Strategy

2. Government Securities Performance

3. Crisis Management Protocol & Bond Stabilization Framework

4. Debt Outstanding & Risk Profile

2

DISCLAIMER: This presentation does not constitute or form part of and should not be construed as an offer to sell or issue or the solicitation of an offer to buy or acquire securities of the Republic in any jurisdiction or as an inducement to enter into investment activity. No part of this presentation, nor the fact of its distribution, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. This presentation is not and should not be construed as financial, legal, tax, investment or other product advice.

Government Securities Management and

Financing Strategy

General Strategy for Debt Financing 2015

1. Optimizes Governments securities (SBN) issuance from domestic sources to fulfill Budget need and uses

foreign debts as complimentary;

2. Determines debt instrument by taken into account of market need in regard to market development and

portfolio management;

3. Issues Retail Bond for instrument diversification and financial inclusion;

4. Optimizes foreign and domestic loan instrument to fulfill Budget need on capital expenditure;

5. Conducts active portfolio management of Government securities through, among others, debt buyback

and debt switch, in order to promote market liquidity and stability;

6. Strengthens the function of Investor Relations Unit, among others, through the proactive dissemination of

information, rapid and effective responses, and effective communication with investors and other stakeholders.

4

Financing Trend, 2004 – 2015

(trillion IDR)

Notes: * Preliminary 2014 ** Revised Budget 2015

5

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014* 2015**

Govt Securities - net 6.9 22.6 36.0 57.2 85.9 99.5 91.1 119.9 159.7 224.7 265.0 297.7

Domestic Loan - - - - - 0.4 0.6 0.8 0.4 0.5 1.7

External Loan - net (28.1) (10.3) (26.6) (26.6) (18.4) (12.4) (4.6) (17.8) (23.5) (5.8) (15.4) (20.0)

Others/Non-Debt - net 42.0 (1.2) 20.0 9.1 16.6 25.5 4.6 28.3 38.1 18.1 (12.2) (65.5)

Budget Defisit, % to GDP 1.1 0.5 0.9 1.3 0.1 1.6 0.7 1.1 1.9 2.3 2.2 1.9

1.1

0.5

0.9

1.3

0.1

1.6

0.7

1.1

1.9

2.3 2.2

1.9

(0.5)

-

0.5

1.0

1.5

2.0

2.5

-100

-50

0

50

100

150

200

250

300

Government Budget FY 2015

6

In billion IDR Financing sources Revised

Budget 2015 come from debt

financing (85.78% from

Government Securities, 9.62%

from Loan) and the rest 4.61%

from non debt financing.

In the Revised Budget 2015

(APBN-P 2015), deficit is

narrowing from 2.21% to 1.91%

of GDP

To maintain resilience and fiscal

sustainability

Despite lower budget deficit, net

debt in 2015 is higher

Government injects equity to SOEs

to increase their capacity to support

the achievement of the national

priority agenda

Stand-by loans are in place

to anticipate adverse

situations.

A. Total Revenue 1,793,588.9 16.1 1,761,642.8 15.1

B. Total Expenditure 2,039,483.6 18.3 1,984,149.7 17.0

Interest Payment 151,968.3 1.4 155,730.9 1.3

C. Primary Balance (93,926.4) (0.8) (66,776.0) (0.6)

D. Deficit (245,894.7) (2.2) (222,506.9) (1.9)

E. Financing 245,894.7 2.2 222,506.9 1.9

I. Non Debt (8,961.2) (0.1) (56,874.0) (0.5)

II. Debt 254,855.9 2.3 279,380.9 2.4

1. Government Securities (Net) 277,049.8 2.5 297,698.4 2.5

2. Loan (Net) (22,193.9) (0.2) (18,317.5) (0.2)

i. Foreign Loan (Net) (23,815.1) (0.2) (20,008.1) (0.2)

Disbursement 47,037.1 0.4 48,647.0 0.4

- Program Loan 7,140.0 0.1 7,500.0 0.1

- Project Loan 39,897.1 0.4 41,147.0 0.4

On Lending (4,319.4) (0.0) (4,471.9) (0.0)

Foreign Loan Principal Payment (66,532.8) (0.6) (64,183.2) (0.5)

ii. Domestic Loan (Net) 1,621.2 0.0 1,690.6 0.0

Disbursement 2,000.0 0.0 2,000.0 0.0

Domestic Loan Principal Payment (378.8) (0.0) (309.4) (0.0)

Assumptions :

GDP (trillion IDR) (Y.o.Y) 11,146,943.0 11,700,808.0

Growth (%) 5.8 5.7

Inflation (%) y-o-y 4.4 5.0

3-month-SPN (%) 6.0 6.2

IDR/USD (average) 11,900 12,500

% to

GDPBudget

% to

GDP

Revised

Budget

2015

Description

Government Securities Financing (Gross) 2015

7

Domestic:

Auction:

conventional securities: 23 x

Islamic securities: 22 x

Non-Auction:

retail bonds: ORI + Sukuk Retail.

International Bonds:

Issuance of International Bonds as complement to avoid crowding out in domestic market and provide benchmark for corporate issuance, consist of USD, YEN or EURO global bonds

Maximum issuance international bond 22.6% from target gross

Issuance targets for GDS, Sukuk and ATM target:

– GDS (SUN): 79.9% – Sukuk: 20.1% – ATM for auctions: 8.2 year

Front Loading strategy: • in the first semester is targeted

at 63.4%. • for domestic issuance is also

targeted at first semester at 59.2%

FR 69 – 5 Y

FR 70 – 10 Y

FR 71 – 15 Y

FR 68 – 20 Y

Benchmark Series for 2014 & 2015

(in trillion Rp)

Instruments Budget

Revised

Budget

Govt Securities (net) 277.0 297.7

Redemption 135.6 136.1

Cash Management 15.0 15.0

Buyback 3.0 3.0

Govt Securities (gross) 430.7 451.8

Domestic 80.0% 77.4%

Retail 9.3% 8.9%

Auctions 70.7% 68.5%

International Bond 20.0% 22.6%

Indicative Target

Securities Financing Realization 2015

*Adjusted by changes in Cash Management & Debt Switch 8

*(Million IDR)

Budget 2015*Revised Budget

2015*

Realization

(ao April 14,

2015)*

% Realization to

Revised Budget

2015

Government Securities Net 277.049.800 297.698.382 160.247.753 53,83%

Government Securities Maturing in 2015 153.612.324 154.112.324 31.199.282 20,24%

-Buyback 3.000.000 3.000.000 - 0,00%

Issuance Need 2015* 430.662.124 451.810.706 191.447.035 42,37%

Government Debt Securities (GDS) 146.082.000

Domestic GDS 95.710.000

-Coupon GDS 68.960.000

-Conventional T-Bills 23.750.000

-Private Placement 3.000.000

-Retail Bonds -

International Bonds 50.372.000

-USD GMTN 50.372.000

-Euro GMTN -

-Samurai Bonds -

Government Islamic Debt Securities 45.365.035

Domestic Government Islamic Debt Securities 45.365.035

- IFR/PBS/T-Bills Sukuk (Islamic Fixed Rated

Bond/Project Based Sukuk) 20.700.000

- Retail Sukuk 21.965.035

- Private Placement 2.700.000

Global Sukuk -

Government Securities Performance

0%

10%

20%

30%

40%

50%

60%

-

20,000

40,000

60,000

80,000

100,000

120,000

Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sept-14 Oct-14 Nov-14 Jan-15 Feb-15 Mar-15 14-Apr-15

Incoming Bids Awarded Bids Foreign Incoming Bids Foreign Awarded Bids % Foreign Incoming Bids (RHS)

10 10

• Average Foreign incoming bids 2015 is Rp7,85T, compare to period in 2014, which reached 7,58T • Average incoming bids 2015 = Rp27,41T, increased from average incoming bids 2014 = Rp22,65T

• Average awarded bid 2015 = Rp11,59T while average awarded bid 2014 = Rp10,97 T.

*as of April 14, 2015

Average incoming bids

2014 = Rp22,65T/auction

Average awarded bids

2014 = Rp10,97T/auction

Government Debt Securities Primary Market Performance 2015

0%

10%

20%

30%

40%

50%

60%

-

20,000

40,000

60,000

80,000

100,000

120,000

140,000

Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Jan-15 Feb-15 Mar-15 14-Apr-15

Incoming Bids Awarded Bids Foreign Incoming Bids Foreign Awarded Bids % Foreign Incoming Bids (RHS)

11 11

• Average Foreign incoming bids 2015 is Rp5,91T

• Average incoming bids 2015 = Rp19,31T, increased from average incoming bids 2014 = Rp14,02T

• Average awarded bid 2015 = Rp7,56T, while average awarded bid 2014 = Rp6,52T.

*as of April 14, 2015

Avr . Awarded bids

2014 = 6,52T

Avr. Incoming Bid 2014: 14,02T

Avr. Foreign Incoming Bid 2014:

4,42T

Government Securities Primary

Market Performance 2015

0

10

20

30

40

50

60

70

Spread (bid-ask)

3,55 2,98 4,39

5,88 5,73 5,31 7,91

10,91 11,11 9,18

6,33 0,41

0,15

0,22

0,16 0,38 0,41

0,76

1,14 0,81

0,77

0,57

0,27 0,30

0,34 1,54

3,45

6,70

8,80

7,45 7,19

4,84 7,65

-

5,00

10,00

15,00

20,00

25,00

Trili

un

OUTRIGHT REPO BANK REPO BI

2,00

4,00

6,00

8,00

10,00

12,00

14,00

16,00

18,00

20,00

22,00

Ap

r'08

Ju

l'08

Ok

t'08

Ja

n'0

9

Ap

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Ju

l'09

Ok

t'09

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0

Ap

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Ju

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Ok

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1

Ap

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2

Ap

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Ap

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Ap

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5Y 10Y 15Y 20Y

(IDR Trilion)

Global Financial

Crisis

Eurozone sovereign debt crisis

[In Percentage]

As of April 10, 2015

Activities of the domestic bonds are growing Yields of Benchmark Series steadily decrease

Bid Ask Spread 10 Y Government Bond Turn Over 10 Y Government Bond

As of April 14, 2015

As of April 14, 2015

Secondary Market Performance

Spread 5.4 bps

(ask 7.245%, bid

7.,299%)

12

7,19(5Y), 7,35(10Y), 7,6(15Y), 7,61(20Y)

5.12

7.04

5.15

14.12 12.88

10.75 10.53

-

3.00

6.00

9.00

12.00

15.00

2008 2009 2010 2011 2012 2013 2014

LCY 10 Year

Government

Bonds

Latest Yield YTD Change (BP)

MTD

Change

(BP)

HK 1.496 -42.7 -0.6

ID 7.252 -54.4 -18.7

JP 0.343 +1.4 -6.2

KR 2.107 -49.8 -5.0

MY 3.878 -26.9 -1.6

PH 4.193 +33.0 +2.6

SG 2.053 -22.7 -22.1

TH 2.663 -6.6 -1.8

US 1.927 -24.4 +0.4

VN 6.588 -64.2 +8.3

• Market Watch as of April 14, 2015

• Source: Asian Bonds Online

Yield GS on peer’s market

13

Source: IDMA, Bloomberg, as of April 14, 2015

-

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

20.0

22.0

1Y 2Y 3Y 4Y 5Y 6Y 7Y 8Y 9Y 10Y 15Y 20Y 30Y

14 Apr '15 7 Apr '15

13 Mar '15 9 Feb '12

23 Sep '11 27 Oct '08

13 Sep'05

[in percentage]

Tenor 14-Apr-15 7-Apr-15 13-Mar-15 9-Feb-12 23-Sep-11 27-Oct-08 13 Sep'05

1Y 6.43 6.49 6.52 3.30 5.29 19.37

2Y 6.90 6.83 6.87 4.21 6.01 17.35 14.59

3Y 7.08 7.10 7.11 4.33 6.13 19.93

4Y 7.19 7.15 7.17 4.39 6.54 17.17 14.14

5Y 7.23 7.21 7.29 4.44 6.69 17.46 14.96

6Y 7.23 7.25 7.31 4.79 6.81 17.05 15.24

7Y 7.24 7.26 7.35 4.88 7.08 17.06 16.17

10Y 7.37 7.38 7.51 5.02 7.43 20.91 15.75

15Y 7.61 7.60 7.73 5.47 7.83 16.65 14.12

20Y 7.65 7.66 7.76 5.96 8.20 20.27

30Y 7.94 7.96 8.13 6.17 8.29 20.37

Ownership of Tradable Domestic Government

Securities

In the end of January 2015, foreign investor ownership record the highest percentage of ownership, showing their

increasing appetite on the Indonesia’s government securities.

14

`

Banks 335,43 33,70% 375,55 31,04% 372,66 29,95% 373,22 29,43% 349,26 26,75% 360,70 27,47%

Govt Institutions (Bank Indonesia*) 44,44 4,47% 41,63 3,44% 38,37 3,08% 53,03 4,18% 85,40 6,54% 80,87 6,16%

Non-Banks 615,38 61,83% 792,78 65,52% 833,42 66,97% 841,85 66,39% 870,83 66,71% 871,57 66,37%

Mutual Funds 42,50 4,27% 45,79 3,78% 47,16 3,79% 47,23 3,72% 50,19 3,84% 52,14 3,97%

Insurance Company 129,55 13,02% 150,60 12,45% 149,95 12,05% 150,21 11,84% 155,54 11,91% 157,42 11,99%

Foreign Holders 323,83 32,54% 461,35 38,13% 500,83 40,25% 507,67 40,03% 504,08 38,61% 506,78 38,59%

Foreign Govt's&Central Banks** 78,39 7,88% 103,42 8,55% 104,66 8,41% 106,17 8,37% 101,41 7,77% 102,10 7,78%

Pension Fund 39,47 3,97% 43,30 3,58% 43,00 3,46% 43,77 3,45% 44,73 3,43% 44,42 3,38%

Securities Company 0,88 0,09% 0,81 0,07% 0,65 0,05% 0,66 0,05% 0,63 0,05% 1,15 0,09%

Individual 32,48 3,26% 30,41 2,51% 28,35 2,28% 26,39 2,08% 47,63 3,65% 40,96 3,12%

Others 46,68 4,69% 60,51 5,00% 63,49 5,10% 65,93 5,20% 68,03 5,21% 68,70 5,23%

Total 995,25 100% 1.209,96 100% 1.244,45 100% 1.268,11 100% 1.305,49 100% 1.313,14 100%

Dec-13 14-Apr-15Feb-15Jan-15Dec-14 Mar-15

Foreign Investor Activity (yearly)

15

Foreign Net Buy/Sell up to March (YTD) & yearly total (IDR trillion)

Investors Net Buy/Sell (IDR trillion)

Source: Bank Indonesia

• Foreign investors (Asing) recorded a net buy of IDR45.6 trillion (year to date). While during the year of 2014 Foreign net buy reached IDR137.5 trillion.

• In March 2015 foreign investor recorded net buy of IDR42,7 trillion, thus during April net buy is recorded IDR2.9 trillion.

Note: *) as of April 10

2011 2012 2013 2014 2015

Domestic 55,3 49,0 121,7 77,2 57,5

Foreign 27,1 47,7 53,3 137,5 45,6

Total 82,4 96,7 175,0 214,7 103,2

27,1

47,7

53,3

137,5

45,6

4,6

4,1

11,1

21,3

42,7

0 20 40 60 80 100 120 140 160

2011

2012

2013

2014

2015

Maret YTD

Foreign Investor Activity (as of April 14, 2015)

Net Buyer (Seller) - Non Resident Foreign Ownership - Proportion by Tenor

[In IDR Trillion]

Foreign investors mostly dominated by high quality long term investors

16

(1,49)

(29,29)

1,69

(4,99)

8,06

13,11

(8,99)

(2,27)

4,15

(4,37)

(0,08)

10,13

(1,41)

7,83 9,35

19,52

0,68 2,68

8,44

(0,88)

17,97

4,22

(19,98)

2,81

(1,76)

10,13

23,98

6,08

(0,37)

4,82

16,49

15,77 16,10

20,15

6,43

14,67

15,95

13,17 12,49

21,34

(19,84)

39,48

6,84

(3,59)

2,70

0,00

0,20

0,40

0,60

0,80

1,00

1,20

(40,00)

(30,00)

(20,00)

(10,00)

0,00

10,00

20,00

30,00

40,00

50,00

Au

g-1

1Se

p-1

1O

ct-

11

No

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1D

ec-1

1Ja

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2Fe

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2M

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12

Ap

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2Ju

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Ap

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No

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3Ja

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14

Ap

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4Ju

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4Ju

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No

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Ap

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5

Capital Inflows

7,84% 5,20% 5,55% 7,06% 5,16% 4,94% 5,39% 4,65% 5,16% 4,99% 5,38% 4,94%

19,32%18,29% 16,15%

18,43% 18,89% 18,90% 19,36% 18,96% 18,13% 16,79% 15,81% 15,68%

72,84%76,50% 78,29%

74,51% 75,95% 76,16% 75,25% 76,39% 76,70% 78,21% 78,81% 79,38%

32,98% 32,54%33,64%

35,66%37,30% 37,80%

39,41%38,13%

40,25%40,03%

38,61% 38,59%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

>5 >1-5 0-1 % Kepemilikan Asing Thd Total Kepemilikan (RHS)

Crisis Management Protocol &

Bond Stabilization Framework

Implement Measures to Manage External Volatility …to mitigate sudden reversals

Pre-emptive Measures

Implementing Crisis Management Protocol

(CMP)

Implementing Bond Stabilization Framework

(BSF)

Enhancing coordination between government

institutions and continuous dialogue with market

participants

Specific policies in place to address crises

enacted in 2015 budget law

Swap facility arrangements based on international cooperation

Crisis Management Protocol

Indicators to determine crisis level of

Government Securities Market condition (normal,

aware, alert, crisis)

Several market indicators that are monitored

daily:

- Yield of benchmark series;

- Exchange rate;

- Jakarta Composite Index;

- Foreign ownership in government securities

Policies to address the crisis at every level :

- Repurchase the government securities at

secondary market

- Postpone or stop the issuance

First Line of Defense

State’s Budget

Buyback fund at DG of Budget Financing

and Risk Management

Investment fund at Government Investment

Agency (PIP) (min. level Aware)

State Owned Enterprises

(BUMN)’s Budget Related BUMNs (min. level Aware)

Social Security Organizing

Agency (BPJS)’s Budget BPJS (min. level Aware)

Second Line of Defense

State’s Budget

State General Treasury Account

(Rekening KUN) (min. level Alert)

Accumulated cash surplus (SAL) (min.

Level Crisis)

State Owned Enterprises

(BUMN)’s Budget Related BUMNs (min. level Alert)

Social Security Organizing

Agency (BPJS)’s Budget BPJS (min. level Alert)

Bond Stabilization Framework

Debt Outstanding & Risk Profile

20

Maturity Profile of Central Government by Instruments (in trillion IDR)

Maturity Profile of Central Government by Currencies (in trillion IDR)

020406080

100120140160180200220240

20

15

20

16

20

17

20

18

20

19

20

20

20

21

20

22

20

23

20

24

20

25

20

26

20

27

20

28

20

29

20

30

20

31

20

32

20

33

20

34

20

35

20

36

20

37

20

38

20

39

20

40

20

41

-20

60

Foreign Domestic

44.1%

55.9%

Foreign

Domestik

020406080

100120140160180200220240

20

15

20

16

20

17

20

18

20

19

20

20

20

21

20

22

20

23

20

24

20

25

20

26

20

27

20

28

20

29

20

30

20

31

20

32

20

33

20

34

20

35

20

36

20

37

20

38

20

39

20

40

20

41

-20

60

Gov't Securities Loan

Maturity Profile Central Government Debt as of the end of February 2015

74.8%

25.2%Gov't

Securities

Loan

Outstanding Central Government Debt by Instrument

21

Note: *) Preliminary Figures

Nominal %

a. Foreign Loan (in billion USD) 68.6 68.4 63.6 58.1 53.9 53.4 25.0%

Bilateral 42.3 42.1 37.2 31.2 26.7 26.5 12.4%

Multilateral 23.2 23.5 23.8 23.6 23.5 23.3 10.9%

Commercial 3.0 2.8 2.5 3.2 3.7 3.6 1.7%

Suppliers 0.1 0.1 0.0 0.0 0.0 0.0 0.0%

b Domestic Loan (in billion USD) 0.0 0.1 0.19 0.2 0.2 0.3 0.1%

c. Government Securities (in billion USD) 118.4 131.0 140.8 136.3 155.2 159.7 74.8%

Foreign Currency Denominated 18.0 21.6 27.4 32.8 36.7 40.6 19.0%

Rupiah Denominated 100.4 109.4 113.4 103.5 118.5 119.0 55.8%

Total Central Government Debt

(in billion USD)187.0 199.5 194.6 209.4 213.4

Total Central Government Debt

(in trilion IDR)1,681.7 1,808.9 2,371.4 2,604.9 2,744.4

Exchange Rate Assumption (IDR/USD1) 8,991.0 9,068.0 12,189.0 12,440.0 12,863.0 9,670.0

Feb-15

204.5

1,977.7

2011 2012 2013 2014*)

2010Description

Outstanding Central Government Debt by Currency

22

2010 2011

Original Currency

IDR (in trillion) 902.6 993.0 1,098.0 1,263.9 1,477.5 1,534.5

Gov't Securities 902.4 992.0 1,096.2 1,261.7 1,474.6 1,531.2

Loan 0.2 1.0 1.8 2.2 2.9 3.3

USD (in billion) 39.6 43.9 49.8 56.8 61.0 64.9

Gov't Securities 16.9 20.4 25.6 31.3 34.2 38.2

Loan 22.8 23.5 24.2 25.4 26.8 26.7

JPY (in billion) 2,689.8 2,589.8 2,498.8 2,395.3 2,204.0 2,204.0

Gov't Securities 95.0 95.0 155.0 155.0 155.0 155.0

Loan 2,594.8 2,494.8 2,343.8 2,228.8 2,049.0 2,056.9

EUR (in billion) 5.4 5.0 4.5 4.2 5.1 5.2

Gov't Securities - - - - 1.0 1.0

Loan 5.4 5.0 4.5 4.2 4.1 4.2

Other currencies

Equivalent in Billion USD

IDR 100.4 109.5 113.5 103.7 118.8 123.4 55.9%

USD 39.8 43.9 49.8 56.8 61.0 67.1 30.4%

JPY 33.1 33.4 29.1 22.8 18.5 19.2 8.7%

EUR 7.2 6.4 6.0 5.8 6.2 6.0 2.7%

Other currencies 6.5 6.3 6.1 5.8 5.0 5.0 2.3%

Total Eq. in Billion USD 187.0 199.5 204.5 194.9 209.4 220.6

Equivalent in Trillion IDR

IDR 902.8 993.0 1,098.0 1,263.9 1,477.5 1,534.5

USD 357.6 397.9 481.9 692.0 758.3 834.2

JPY 297.6 302.5 281.2 278.3 229.8 238.5

EUR 65.0 58.5 57.5 71.1 76.9 74.2

Other currencies 58.6 57.1 59.1 70.2 62.4 62.8

Total Eq. in Trillion IDR 1,681.7 1,808.9 1,977.7 2,375.5 2,604.9 2,744.4

Foreign Currency Portion 46.3% 45.1% 44.5% 46.8% 43.3% 44.1%

Exchange Rate Assumption USD/IDR 8,991 9,068 9,670 12,189.0 12,440.0 12,863.0

----------------Multiple Currencies -----------------------

20132012 2014*)

Feb-15

*) Preliminary Figures

Central Government Debt Ratios

Debt to GDP Ratio Interest Payment to Revenue and

Expenditure Ratio

Debt Service to GDP Ratio Interest Payment to Tax Revenue &

Central Government Expenditure Ratio

23 Notes: Using GDP at Current Market Prices [2010 Version] * Preliminary Figures

8,9

%

7,7

%

7,5

%

7,9

%

8,7

%

8,5

%

7,2

%

6,7

%

6,8

%

7,6

%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

2010 2011 2012 2013 2014*

Interest to Revenue Interest to Expenditure

12

,2%

10

,7%

10

,8%

10

,5%

11

,7%

12,7

%

10,6

%

9,9%

9,9%

11,2

%

0%

2%

4%

6%

8%

10%

12%

14%

2010 2011 2012 2013 2014*

to Tax Revenue to Central Gov't Expenditure

24,5% 23,1% 23,0%

24,9% 24,7%

0%

5%

10%

15%

20%

25%

30%

2010 2011 2012 2013 2014*

3,1%

2,9%

3,2%

2,9%

3,4%

2,00%

2,50%

3,00%

3,50%

4,00%

2010 2011 2012 2013 2014*

Risk Indicators

24 Risk indicators are improving amidst pressure from rupiah depreciation Risk indicators show improvements in interest rate risk and stability in exchange and refinancing risks

Interest Rate Risk Exchange Rate Risk

Debt Maturing in 1,3, and 5 years Average Time To Maturity (ATM) - Years

22,0 20,3

18,8 16,2 16,0 14,8

28,2 26,1 25,9

22,5 23,2 21,0

2009 2010 2011 2012 2013 2014*

Variable rate ratio [%] Refixing rate [%]

7,6 7,1 8,2 7,2 8,6 7,7

20,3 20,8 22,7 21,5 21,8 20,2

33,2 34,2 34,6 32,4 33,4 33,9

2009 2010 2011 2012 2013 2014*

Maturity debt portion < 1 year (%) Maturity debt portion < 3 year (%)

Maturity debt portion < 5 year (%)

*Preliminary Figures

13,4 12,1 11,0 10,6 12,2 10,7

47,4 46,2 45,1 44,4 46,7

43,3

2009 2010 2011 2012 2013 2014*

FX Debt to GDP ratio (%) FX Debt to total debt ratio (%)

9,7

9,5

9,3

9,7

9,6

9,8

2009 2010 2011 2012 2013 2014*

Average Time to Maturity (in years)

Primary Market Performance 2015: Global Bonds (USD)

25

RI0125 RI0145

Summary Terms of Offering

Issuer

Issuer Ratings

Issue Ratings

Issue

Size USD2 billion USD2 billion

Pricing / Settlement Date 8 January / 15 January 2015 8 January / 15 January 2015

Maturity 10 years due 15 January 2025 30 years due 15 January 2045

Coupon 4.125% payable semi annually 5.125% payable semi annually

Reoffer Yield / Price 4.200% / 99.393% 5.200% / 98.867%

Format Rule 144A / Reg S Rule 144A / Reg S

Listing SGX-ST SGX-ST

Total Book Order USD10.05 billion USD9.23 billion

Republic of Indonesia

Baa3 Stable (Moody’s), BB+ Stable (S&P), BBB- Stable (Fitch)

Baa3 (Moody’s), BB+ (S&P), BBB- (Fitch)

USD fixed rate

Allocation by Geography

Allocation by Investor Type

Indonesia13%

Asia15%

Europe24%

USA48%

RI0125

Indonesia4%

Asia20%

Europe23%

USA53%

RI0145RI0125

RI0125

RI0145

RI0145

Fund / Asset Managers

73%

Banks14%

Insurance / Pension Funds

9%

Private Banks2%

SWF2%

Fund / Asset Managers

75%

Banks8%

Insurance / Pension Funds

13%

Private Banks2%

SWF2%

END OF PRESENTATION Directorate General of Budget Financing and Risk Management Ministry of Finance of Republic of Indonesia Directorate of Government Debt Securities Frans Seda building, 4th floor, Jl. Wahidin Raya No. 1, Jakarta Pusat – Postal Code: 10710 Phone: +6221 3810175 Fax. : +6221 3846516 Website: www.djpu.kemenkeu.go.id

Key Initiatives to Develop Domestic Gov. Securities

Market

Facilitating the development of derivative instrument and Government securities repo:

• Develop a deep and liquid repo market, coordinate with FSA

• Facilitating the development of Government Bond Futures

Focused on a few benchmark series with large outstanding

Introduction of an electronic trading platform (ETP)

Strengthening Investor Relations (IR)

Launch a new primary dealer system

Increase domestic participation from key investors

Continuously improving bond stabilization framework

27

Securities Financing Realization 2014

*Adjusted by changes in Cash Management & Debt Switch

28

*(Million IDR)

Revised Budget

2014*

Realization

(ao Dec 31, 2014)*

% Realization to

Revised Budget

2014

Remaining target*

Government Securities Net 264,983,700 264,978,114 100.00% -

Government Securities Maturing in 2014 163,151,013 163,151,013 100.00% -

-Buyback 1,350,968 1,350,968 100.00% -

Issuance Need 2014* 428,134,713 428,129,127 100.00% 5,586

Government Debt Securities (GDS) 352,588,379

Domestic GDS 284,376,795

-Coupon GDS (Auction, Private Placement) 199,870,000

-Conventional T-Bills (Auction, Private Placement) 48,500,000

-SPNNT 20140303 12,400,000

-Retail Bonds 23,606,795

International Bonds 68,211,584

-USD Global Bonds 48,466,366

-USD Domestic Bonds 3,985,450

-Euro Denominated Bonds 15,759,767

-Samurai Bonds -

Government Islamic Debt Securities 75,540,748

Domestic Government Islamic Debt Securities 57,794,345

- IFR/PBS/T-Bills Sukuk (Islamic Fixed Rated Bond/Project Based Sukuk) 38,471,000

- Retail Sukuk 19,323,345

Global Sukuk 17,746,403

Domestic Institutional Investors

Pension Fund Insurance Company

Mutual Fund

Rp241.67

Rp326.23Rp356.45 Rp361.37

Rp497.03 Rp497.99

Rp545.54Rp567.13

27.09%

24.01%

21.77%

24.11%

19.74%21.02%

12.95%13.98%

0.00%

10.00%

20.00%

30.00%

0

100

200

300

400

500

600

2008 2009 2010 2011 2012 2013 Mar-14 Jun-14

Govt. Securities (GS) Bond

Deposit Stock

Mutual Funds Others

Rp90.11

Rp108.39

Rp141.51 Rp136.53

Rp156.45

Rp169.53 Rp164.15 Rp167.23

27.91% 27.43%

21.90%22.64%

19.68%18.36%

19.46%18.33%

0.00%

10.00%

20.00%

30.00%

0

30

60

90

120

150

180

2008 2009 2010 2011 2012 2013 Mar-14 Jun-14

Govt. Securities (GS) BondDeposit StockMutual Funds Others

45%

37%

33%

28%25%

20%

0%

10%

20%

30%

40%

50%

60%

0

30

60

90

120

150

180

210

240

270

Government Securities (GS) Deposit Bond Stock Others % SBN (RHS)

71.48

110.13

180.28

159

142.97

244.32

Source: Financial Service Authority (OJK), data

processsed

29

Individual & Retail Investors

Retail Govt Securities investors in primary market Individual Ownership

30

16,561

33,546

47,434

23,617

15,239 15,198

23,127

34,776 32,638

14,295 17,231 15,487 17,606 17,783

34,692

29,706

6,412

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Conventional Retail bonds Islamic Retail bonds Retail Saving bonds

3.28%

2.51%2.28% 2.08%

3.65%

0

10

20

30

40

50

60

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%

December 2013 Dec, 2014 Jan, 2015 Feb, 2015 March 27, 2015

Nominal (IDR Trillion) RHS

Percent