THE COMPILATION OF FLOW OF FUNDS THE COMPILATION OF FLOW OF FUNDS STATISTICSSTATISTICS

IN INDONESIAIN INDONESIA

Paris, October 24-27th 2011

Hendy SulistiowatyEko Ariantoro

Contributed to the Discussion of Working Party on Financial Statistics (WPFS) Meetingand Workshop on the Implementation of the SNA 2008

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O U T L I N E

Basic Concept of FOF Construction

Data Coverage of Indonesia FOF

Data Coverage: Australia, US, MFSM

CONCEPT

Data Sources Availabilty

The Process of FOF Compilation

Quarterly & Annualy FOF Statistics

The Needs of Further Improvement

Conclusion & Remarks

FOF COMPILATION

A WAY FORWARD

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BASIC CONCEPT OF FOF CONSTRUCTION

Income Distribution

IGROSS SAVING

NON-FINANCIALINVESTMENT / GFCF

NET LENDING / BORROWING

X

MImport

Export

PRODUCTION SECTORS FINANCIAL SECTORS

FINANCIALUSES

FINANCIALSOURCES

ROW

FS

FU

Consumption

C

PProduction

FOF

Fin-Uses

Fin-Sources

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FLOW OF FUNDS is a data system which is designed to describe net lending and net borrowing among institutional sectors, and financial transaction activities using various financial instruments.

Indonesian FOF is constructed in the form of matrix system.

The column side represents institutional sectors, which divided into 2 columns: Financial Uses (assets) and Financial Sources (liabilities).

The row side is divided into 2 rows, ie. above the line and below the line, which are separated by a row of the net lending/borrowing transaction. Above the line of FOF’s row constitutes Saving and Non-Financial

Investment (Gross Fixed Capital Formation). Below the line of FOF’s row comprises various instruments of financial

investment. Indonesian FOF statistics has been compiled by Statistics Indonesia (BPS)

coordinating with Bank Indonesia and Ministry of Finance. FOF data have been available annualy (8 sectors) since 1984, and quarterly (5

sectors) since 2000.

THE INDONESIAN FOF STATISTICS

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BASIC FRAMEWORK OF INDONESIAN FOF

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COVERAGE OF INSTITUTIONAL SECTORS

1 Monetary Authority (Central Bank) 1 Monetary Authority (Central Bank)

2 Banks 2 Banks

3 Government 3 Non Bank Financial Corporations

4 Business and Household 4 Households

5 Rest of the World 5 Government

6 State Enterprises

7 Private Enterprises

8 Rest of the World

QUARTERLY DATA ANNUAL DATA

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COVERAGE OF FINANCIAL INSTRUMENTS … (1)

3 Currency and Deposits3.1. Currency and Deposits in Foreign Exchange 3.1.1. Currency3.1.2. Demand Deposits3.1.3. Savings Deposits3.1.4. Time Deposits3.1.5. Other Deposits in Foreign Exchange3.2. Currency and Deposits in Rupiah3.2.1. Currency and Coins3.2.2. Demand Deposits3.2.3. Savings Deposits3.2.4. Time Deposits3.2.5. Other Deposits in Rupiah 3.3. Postal and Cooperation Deposits4 Short Term Securities5 Total Loans5.1. Bank Loans in Rupiah5.1.1. Working Capital Bank Loans5.1.2. Investment Bank Loans5.1.3. Consumption Bank Loans5.2. Other Institution Loans in Rupiah

A Goss SavingB Non-financial Investment

C Total of Financial UsesD Total of Financial Sources

1 Official Foreign Reserve (Reserve Assets)1.1. Monetary Gold1.2. Special Drawing Rights1.3. Foreign Reserve1.3.1. Bank Notes1.3.2. Demand Deposits1.3.3. Time Deposits1.3.4. Securities1.3.5. Other Foreign Reserve2 Other Foreign Claims

FINANCIAL INSTRUMENTS

QUARTERLY DATA

SAVING AND INVESTMENT

NET LENDING (BORROWING

NET FINANCIAL INVESTMENT

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COVERAGE OF FINANCIAL INSTRUMENTS … (2)

5.3. Bank Loans in Foreign Currency5.3.1. Working Capital Bank Loans5.3.2. Investment Bank Loans5.3.3. Consumption Bank Loans6 Shares and Equity6.1. Shares (stocks)6.2. Equity (participation)7 Long Term Securities7.1. Government Bonds7.2. Other Long Term Securities8 Insurance and Pension Fund Reserve9 Trade Credits10 Interbank Claims10.1. Interbank Claims: Banks and Central Bank10.1.1. Central Bank Certificate10.1.2. Demand Deposit at the CB in Rupiah10.1.3. Demand Deposit at the CB in Foreign Currency10.1.4. Other Interbank Claims: Bank and CB10.2. Interbank Claims11 Miscellaneous Accounts

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COVERAGE OF FINANCIAL INSTRUMENTS … (3)

A Goss SavingB Non-financial Investment

C Total of Financial UsesD Total of Financial Sources

1 Official Foreign Reserve (Reserve Assets)2 Other Foreign Claims3 Currency and Deposits3.1. Currency and Deposits in Foreign Exchange 3.2. Currency and Deposits in Rupiah3.2.1. Currency and Coins3.2.2. Demand Deposits3.2.3. Savings Deposits3.2.4. Time Deposits3.2.5. Other Deposits in Rupiah

SAVING AND INVESTMENT

NET LENDING (BORROWING

FINANCIAL INSTRUMENTS

NET FINANCIAL INVESTMENT

ANNUAL DATA

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FINANCIAL DATA COVERAGE: Australia FOF Accounts

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FINANCIAL DATA COVERAGE: US FOF Accounts

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FOF DATA COVERAGE: MFSM Based Financial Instruments

1 Monetary Gold and Special Drawing Rights2 Currency and Deposits2.1. Currency2.2. Trasferable Deposits2.3. Other Deposits3 Securities other than Shares3.1. Short-term Securities other than Shares3.2. Long-term Securities other than Shares4 Loans

Short-term LoansLong-term Loans

5 Shares other than Equity6 Insurance Technical Reserves6.1. Net Equity of Households on Life Insurance Reserves and in Pension Funds6.1.1. Net Equity of Households on Life Insurance Reserves6.1.2. Net Equity of Households in Pension Funds6.2. Prepayment of Premiums and Reserves against Outstanding Claims7 Financial Derivatives8 Other Accounts Receivable/Payable8.1. Trade Credits and Advances8.2. Other Accounts Receivable/Payable

FINANCIAL INSTRUMENTS

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DATA SOURCES AVAILABILITY

1) Conducted by Statistics Indonesia (BPS) 1) Conducted by Bank Indonesia

2) Annual survey 2) Annual survey

3) Data are recorded in flows 3) Data are recorded in stock

4) Advantages: 4) Advantages:

5) Disadvantages: 5) Disadvantages:a) The survey is aimed to construct a households balance sheet, not to fulfill flow of funds statistics

b) The continuity of the survey is in progess of internal discussion.

a) The survey shows the picture of households' income and outlay.

b) The survey is maintained continuously by Statistics Indonesia.

a) Limited data of households' financial transaction are available.

b) The number of respondents is small compared to total households.

c) The sampling frame of the survey is bias downward to small and medium income households.

SURVEYS' BASED DATA

HOUSEHOLDS SURVEY (STOCK)

a) The survey shows the structure of households' assets and liabilities.

b) The survey provides more detail data on financial instruments.

HOUSEHOLDS SURVEY (FLOWS)

1) Types of Report:

- Central Bank Statistics

- Banking Report

- Government Accounts

- Capital Market Report

- International Investment Position

2) Data coverage:

c) Data are recorded in stock, hence flows data are calculated by the changes of stock.

REPORTS' BASED DATA

a) Households' financial data are recorded as counterpart of financial transaction with Central Bank, Banks, Government, and Rest of the World.

b) Types of financial instrument depend on the classification available in each report.

MONTHLY REPORT

COMPILATION PROCESS OF INDONESIAN FOF

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B/S of Commercial and Rural Banks

B/S of Central Bank

B/S of Finance Companies

PROCESSED BY

MAIN FRAME

INDONESIAN FLOW OF

FUNDS

SPECIFICATION

OF INDONESIAN FOF

Source:BANK INDONESIA

Source: STATISTICS INDONESIA

Gross Fixed Capital Formation

Household Saving & Investment Survey

Private Enterprises Survey

Source: Ministry of Finance

Government Income & Expenditure

PROCESSED MANUALLY

Int’l Invest. Position

B/S OF HOUSEHOLDS

B/S OF PRIVATE INSTITUTIONS

RECONCILIATION

OTHERS Capital MarketNON-FIN. ACCT OF

GOVERNMENT

CENTRAL BANKACCOUNTS

FIN.ACCT OF GOVERNMENT

BANKS ACCOUNTS

FIN.ACCT OF OTHER DOMESTICS

REST OF THE WORLD ACCOUNTS

DATA COLLECTION TABULATION CONSOLIDATION

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QUARTERLY INDONESIAN FOF, Q1 2011*)

*) Preliminary Figure

Trillion Rp

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PAGE 1ANNUALY INDONESIAN FOF, 2009

Trillion Rp

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PAGE 2 Trillion RpANNUALY INDONESIAN FOF, 2009

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Foreign loan to Business & HH Rp16,0 TForeign Inv in Business & HH Rp23,2 TSelling stocks by Foreign Rp24,0 T

Increase in SBI/SBIS of Banks Rp5,8 TIncrease in Term Deposit Rp28,3 TIncrease in Rupiah DD Rp15,5 TIncrease in Forex DD Rp16,1 TDecrease in Currencies in Banks Rp9,5 T

BUSINESS & HOUSEHOLDS

Goss Saving Rp449,2 T

Non Fin. Inv Rp548,2 T

Net Borrowing Rp99,0 T

BANKSGross Saving Rp21,5

TNon Fin. Inv Rp1,2 TNet Lending Rp20,3

T

CENTRAL BANKGross Saving -Rp5,8

TNon Fin. Inv -Rp38,3

MNet Borrowing Rp5,8

T

GOVERNMENTGross Saving Rp75,1

TNon Fin. Inv Rp9,0 TNet Lending Rp66,1

T

REST OF THE WORLD

Net lending Rp18,3 T

Decrease inDeposit Facility Rp23,8 T

Increase in SBI of Business & HH Rp2,2 T

Increase in SBI owned by Foreign

Rp22,5 T

Increase in Foreign Reserves $9,5 M (Position: $105,7 M )

Decrease in Curr. of

Business & HH Rp15,8 T

Increase Central Govt DD (Rupiah: Rp20,0 T; Forex Rp34,2 T)

Increase in SBN of Banks Rp13,1 T

Increase in SBN of Business & HH Rp15,0 T

Increase in SBN of Foregn Rp15,8

T

Foreign loan repayment Rp4,9T

Increase in Rupiah Loans Rp41,3 TIncrease in Forex Loans Rp13,8 TThird Party Fund Withdrawal Rp42,5 T

Increase in DD owned by Reg-Govt Rp37,1

T

INDONESIAN FOF ANALYSIS, Q1 2011*)

*) Preliminary Figure

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THE NEEDS OF FURTHER IMPROVEMENT

COVERAGEEXISTING INDONESIAN

FOF STATISTICSFURTHER

IMPROVEMENT

1. Institutional SectorsBased on SNA 1968 and Manual of Money and Banking 1986

Based on SNA 2008 and MFSM 2000 (CG-MFS2008)

2. Financial InstrumentsBased on Money and Banking 1986

Based on MFSM 2000 (CG-MFS 2008)

3. Flows Concept Changes of positionFlows of transaction, valuation, and OCVA

4.Compilation Framework

Based on international best practices

Need for alignment with international commitment, such as G20 Data Gaps initiatives (Sectoral Acccounts)

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THE ORGANIZATION OF DATA MANAGEMENT

CentralBank

Ministry ofFinance

StatisticalOfiice

Monetary Statistics(Base & Broad Money)

Financial Soundness Indicators (R2) Balance of Payments International Inv. Position (R12) Consol’d Portfolio Int’l Survey (R11) Indonesia Banking Statistics (R10) Int’l Transaction Report Payment System Statistics

Government Finance (Budget) Statistics, National & Regional(R17)

Government (Public) Debt Statistics

Non Financial Institution Statistics Public Sector

Debt (G18) Debt Securities

Institutional Sector Account (R15)(Flow of Funds Statistics *)

Securities Data (R7) Real Estate Prices (R19) Principal Global Indicators (R20) Financial Soundness Indicators (R2)

National Accounts (GDP) Inflation (CPI) Input-Output Table Social Accounting Matrix Export-Import Statistics Social & Demografic Statistics

Capital Stocks (Non Financial Assets Position)

Business Tendency Survey

Stastitical Coordionation Line

Remarks:*) The Indonesian FOF is part of country initiatives to accomplish G20 Recommendation of Data Gaps

Ministry of State Own Enterprises

Some Efforts in Compiling Indonesian Sectoral Accounts1. The compilation of Indonesian Sectoral Accounts will be initiated from the related data

availability: Flow of Funds and Capital Stocks.

2. BI will have coordination with Statistics Indonesia (BPS) to define sectors of the economy in Indonesia and classification of financial instruments & non-financial assets.

3. BI and BPS jointly formulate an appropriate approach to fill the data gaps between requested Sectoral Accounts and the available data in Indonesia.

4. The availability of technical assistance from international institute (IMF, BIS, WB or OECD) is necessary to speed up the progress of implementation.

5. The implementation of Indonesian Sectoral Accounts will be aligned with country’s timeframe in implementing SNA 2008.

MAIN CHALLENGES

Among others;The difficulty in integrating financial and non financial accountsThe problems in adequately covering the activities of household and nonfinancial corporationsLimitation balance sheet and sectoral data at present

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A WAY FORWARD

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A Way ForwardPossibilities to Compile Sectoral Account – Financial Assets

A Way ForwardPossibilities to Compile Sectoral Account – Non Financial Assets

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Indonesia has been experienced in compiling FOF Statistics and has provided FOF data annualy (8 sectors) since 1984, and quarterly (5 sectors) since 1993.

The compilation of FOF needs to be further improved to harmonize with current statistic manual (ie. SNA 2008, MFSM and CG-MFS 2008), and to be aligned with other international commitment, such as G20 Data Gaps Initiatives.

Regarding the complexity of FOF compilation, the improvement of FOF in Indonesia requires good coordination among authorized institutions, ie. Bank Indonesia, Statistics Indonesia, Ministry of Finance, and Capital Market & Financial Institution Supervisory Agency.

In the area of “data coverage”, the efforts would be mostly on collecting data from non-bank financial corporations, non financial corporations, and Households.

In the area of “conceptual framework”, Indonesia will initially observe the possibilities to compile FOF based on “true flows” of transaction, valuation, and OCVA.

The improvement of FOF statistics will be synchronized with the efforts in the implemention of SNA 2008, especially on constructing full sequence balance sheet.

Related to the G-20 Data Gap Initiatives, Indonesia is in considerable progress to provide G-20 data recommendation and will have a study on the compilation of Indonesia sectoral accounts.

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CONCLUSION & REMARKS

Thank you