Prime Minister Nguyen Xuan Phuc has signed a decision on the Government’s plans to borrow and pay loans as well as limits of loans in 2018.

Under Decision 437/QD-TTg, the PM approved the plan of borrowing 384 trillion VND (16.89 billion USD), with 275.97 trillion VND in domestic loans and 108.03 trillion VND in foreign loans.

Of the total, 341.77 trillion VND (15.03 billion USD) will be used to balance the State budget, 195 trillion VND (8.58 billion USD) for offsetting budget overspending, 146.77 trillion VND (6.45 billion USD) for repaying principal, and 42.23 trillion VND (1.85 billion USD) for relending.

Meanwhile, the Government will pay 256.769 trillion VND (11.29 billion USD) worth of debts, along with 18.56 trillion VND paid for re-borrowing projects.

The PM also approved limits of loans guaranteed by the Government in 2018. Accordingly, domestic bonds issued by the Vietnam Development Bank will not be higher than 24.43 trillion VND (1.07 billion USD), and that of the Vietnam Bank for Social Policies will be 9.67 trillion VND (425.48 million USD) at maximum.

The limit of Government’s guaranteed loans for projects is 2 trillion VND (88 million USD), while foreign commercial loans of enterprises with Government’s guarantees is 700 million USD. The maximum commercial loans of enterprises and credit organisations will be 5 billion USD.

At the same time, loan limit of local governments will be 21.514 trillion VND (946.44 million USD).

The Ministry of Finance was assigned to implement the borrowing and debt payment plans.

Firms’ loans guaranteed by Gov’t

The Prime Minister last Friday also signed another decision to ease regulations on guarantee for new domestic and foreign loans taken by enterprises.

Under Decision No. 433/QD-TTg, the Government will only limit its guarantee for new domestic and foreign loans of enterprises to implement their investment projects, instead of stopping all guarantees for new loans as was done earlier.

The new regulation is aimed at amending and supplementing Decision No. 544/QD-TTg, dated April 20, 2017, on approving a medium-term debt management programme during the 2016-18 period. Under Decision No. 544/QD-TTg, the Government decided to temporarily stop all guarantees for new loans of enterprises.

The Prime Minister also asked the Ministry of Finance to review the list of projects guaranteed by the Government in the first half of 2018 and submit it to him for consideration and approval.

The medium-term debt management programme during the 2016-18 period is aimed to mobilise loans at appropriate costs and risks to meet the need of balancing the State budget and socio-economic development during certain periods. Besides this, the allocation and use of loan capital must be for the right purposes, ensuring debt repayment capability, maintaining the public debt index, Government debt and national foreign debt at a safe level as well as ensuring national financial security in line with Viet Nam’s context and international practice.

Under the programme, public debt (including Government debt, Government guaranteed debt and local Government debt) should not exceed 65 per cent of gross domestic product (GDP). 

VNA/VNS