Wimboh SantosoChairman of Indonesia Financial Services Authority

INDONESIA FINANCING INVESTMENT FORUM

TRANFORMING FINANCIAL SECTORS TO ATTRACT THE INVESTMENT

MACRO-ECONOMIC AND FINANCIAL SECTORS CONDITION

3

GLOBAL ECONOMIC SLOWDOWN Various prominent institutions have made downward adjustments to global growth forecast

Previously projected at 2.6% (June’19)

3.7

3.3

3.6

3.6

3.0

3.4

2.7

2.9

3.1

3.3

3.5

3.7

3.9

2013 2014 2015 2016 2017 2018 2019 2020

WEO Oct'18 WEO April'19

WEO Oct'19

Downward revision of global economy projection in 2019 & 2020 by WEO

2019 Projection 2020 Projection

Oct’18 Apr’19 Oct’19 Δ Oct’18 WEO

Δ Apr’19 WEO Apr’19 Oct’19 Δ April’19

WEOWorld Output 3.7 3.3 3.0 -0.7 -0.3 3.6 3.4 -0.2AE 2.1 1.8 1.7 -0.4 -0.1 1.7 1.7 0.0US 2.5 2.3 2.4 -0.1 0.1 1.9 2.1 0.2Japan 0.9 1 0.9 0.0 -0.1 0.5 0.5 0.0

EMDEs 4.7 4.4 3.9 -0.8 -0.5 4.8 4.6 -0.2China 6.2 6.3 6.1 -0.1 -0.2 6.1 5.8 -0.3India 7.4 7.3 6.1 -1.3 -1.2 7.5 7.0 -0.5Brazil 2.4 2.1 0.9 -1.5 -1.2 2.5 2.0 -0.5South Africa 1.4 1.2 0.7 -0.7 -0.5 1.5 1.1 -0.4

ASEAN-5 5.2 5.1 4.8 -0.4 -0.3 5.2 4.9 -0.3Indonesia 5.1 5.2 5.0 -0.1 -0.2 5.2 5.1 -0.1

3.0%(revised in Sept’19)

2.5% (revised in Oct’19),

previously estimated at 3.2% (Jul’19)

(revised in Oct’19), 2.9% previously 3.2% (May’19)

4

Reserve Bank of India25 bps to 5.15%

The Central Bank of The Russian Federation

50 bps to 6.5%

cut its benchmark 7-day reverse repo rate by another 25 basis points to 5.00 percent and has now cut it by 100 points following cuts in July, August, September and October in 2019

Bank Indonesia

Reserve Bank of Australia25 bps to 0.75%(3rd cut rate)

Bangko Sentral ng Pilipinas25 bps to 4%

The Fed25 bps 1.5-1.75%.

25 bps to 5% (4th cut rate)

Responding to the economic slowdown, majority of countries have adopted more accommodative monetary policy

MAJORITY OF COUNTRIES HAVE ADOPTED MORE ACCOMMODATIVE MONETARY POLICY

Besides, several countries also imposed non-conventional policies suchas Quantitative Easing by buying bonds through secondary market

Stable growth, driven by strong household consumption and stable inflationINDONESIA ECONOMIC CONDITION REMAINS ROBUST

3.13

0.00

1.00

2.00

3.00

4.00

5.00

-7

-2

3

8

13

18

Feb-

17

Apr-

17

Jun-

17

Aug-

17

Oct

-17

Dec-

17

Feb-

18

Apr-

18

Jun-

18

Aug-

18

Oct

-18

Dec-

18

Feb-

19

Apr-

19

Jun-

19

Aug-

19

Oct

-19

%IHK (rhs) Vol Food Adm Price Inti (rhs)

% %126.70

0

5000

10000

15000

20000

0.0020.0040.00

60.0080.00

100.00120.00

140.00

Feb-

15

Jun-

15

Oct

-15

Feb-

16

Jun-

16

Oct

-16

Feb-

17

Jun-

17

Oct

-17

Feb-

18

Jun-

18

Oct

-18

Feb-

19

Jun-

19

Oct

-19

Cadangan Devisa Nilai Tukar (rhs)Reserve Exc. Rate

Modest foreign exchange reserves (Oct 19 : USD126.70 billion)Inflation remains under control within 3,5% +-1% (Oct 19 : 3.13%)

5.01 4.885.03 5.07 5.17 5.07 5.05 5.02

2

2.5

3

3.5

4

4.5

5

5.5

6

-6

-4

-2

0

2

4

6

8

10

12

2014 2015 2016 2017 2018 Q1 2019 Q2 2019 Q3 2019

Processing Industry Trade AgricultureConstruction Mining TransportationFinancial Services Information and Comm. Gov. Adm.Growth PDB, yoy (%)

Indonesia Economic Growth has been maintained above 5% led by household consumptions

Poverty level decreased and reached the lowest level since 1998

6

Open unemployment rate showed a downward trend(Feb-19: 5.01%)

Gini ratio improved

Poverty Level in million Poverty Level in % of total population

In the recent years, open unemployment rate has been decreasing, poverty has been declining and economic inequality has been narrowing

IMPROVEMENT IN INDONESIA

Men Women

JCI and Return Net Buy/Sell Stocks Net Buy/Sell Govt Bonds

18 Nov ‘19Net Sell

18 Nov 2019Net Sell

Govt Bond YieldAdequate FX Reserves

Source: Bloomberg, IBPA, CEIC

Declining yield102,4 bps ytd

4.0

5.0

6.0

7.0

8.0

9.0

10.0

0,1y 4y 8y 12y 16y 20y 24y 28y

Yield (%)

18-Nov-19

22-Aug-19

28-Dec-18

170.33

57.1

-2.59

1.37

-0.31 -0.89

174.62

2017 2018 30-Au g-19 30-Sep-19 31-Oct-19 18-Nov-19 ytd-22.59

16.17

-39.87-50.75

-0.07

-0.60

-0.43-4.12

44.02

20152016

20172018

30-Sep-19

31-Oct-

19

18-Nov-19

mtd ytd

120.289.500119.680.410 119.944.630

111.480.920

118.595.120 118.400.130

4,593 5,297

6,356 6,195 6,123

-12.11

15.33

19.99

-2.53 -1.16

-15

-10

-5

0

5

10

15

20

25

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2015 2016 2017 2018 18-Nov-19

JCI (rhs) Return

FINANCIAL MARKET OVERVIEWDomestic financial market still resilient

8

CAPITAL ADEQUACY REMAINS STRONG AND

LIQUIDITY REMAINS AMPLE

2.72

2.0

2.2

2.4

2.6

2.8

3.0

3.2

3.4

201

5

201

7

Jun/

18

Aug/

18

Oct

/18

Dec

/18

Feb/

19

Apr/

19

Jun/

19

Aug/

19

Banking CARLife and General Insurance RBC

above the threshold (120%)Multifinance Gearing Ratio

threshold 10%23.38

21.64

15

17

19

21

23

25

Sep-15

Dec-15

Mar-16

Jun-16

Sep-16

Dec-16

Mar-17

Jun-17

Sep-17

Dec-17

Mar-18

Jun-18

Sep-18

Dec-18

Mar-19

Jun-19

Sep-19

CAR % (rhs) Tier I %

667%

321%

250%

290%

330%

370%

300%

360%

420%

480%

540%

600%

660%

720%

Jan

-18

Ma

r-1

8

Ma

y-1

8

Jul-

18

Se

p-1

8

No

v-1

8

Jan

-19

Ma

r-1

9

Ma

y-1

9

Jul-

19

Se

p-1

9

RBC Asuransi Jiwa

RBC Asuransi Umum (RHS)

Liquidity is ample Liquid Asset to NCD around 93.9% (as of 6 Nov 2019)RIM (Intermediation Ratio), LDR, AND LFR

93.91

19.70

5

10

15

20

25

40

60

80

100

120

10

-M

ay

20

-M

ay

30

-M

ay

9-Ju

n

19

-Ju

n

29

-Ju

n

9-Ju

l

19

-Ju

l

29

-Ju

l

8-A

ug

18

-A

ug

28

-A

ug

7-Se

p

17

-Se

p

27

-Se

p

7-O

ct

17

-O

ct

27

-O

ct

6-N

ov

%% AL/NCD (LHS) AL/DPK (RHS)

threshold AL/NCD=50%

threshold AL/DPK=10%

BANK LOANS GREW…

7.89

7.47

93.76

84.00

86.00

88.00

90.00

92.00

94.00

96.00

98.00

-

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

Nov

-16

Jan-

17

Mar

-17

May

-17

Jul-1

7

Sep-

17

Nov

-17

Jan-

18

Mar

-18

May

-18

Jul-1

8

Sep-

18

Nov

-18

Jan-

19

Mar

-19

May

-19

Jul-1

9

Sep-

19

Kredit DPK LDR (rhs)

Credit Growth by Economic Sector (yoy)

5.94%

12.84%

6.82%

7.89%

0%2%4%6%8%

10%12%14%16%18%

Nov

-15

Jan-

16M

ar-1

6M

ay-1

6Ju

l-16

Sep-

16N

ov-1

6Ja

n-17

Mar

-17

May

-17

Jul-1

7Se

p-17

Nov

-17

Jan-

18M

ar-1

8M

ay-1

8Ju

l-18

Sep-

18N

ov-1

8Ja

n-19

Mar

-19

May

-19

Jul-1

9Se

p-19

Working Capital Investment Consumption Total

9.33%

-5.44%

5.59%

26.27%

4.25%

10.55%

8.28%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

Nov

-15

Jan-

16

Mar

-16

May

-16

Jul-1

6

Sep-

16

Nov

-16

Jan-

17

Mar

-17

May

-17

Jul-1

7

Sep-

17

Nov

-17

Jan-

18

Mar

-18

May

-18

Jul-1

8

Sep-

18

Nov

-18

Jan-

19

Mar

-19

May

-19

Jul-1

9

Sep-

19

Yoy (%) Agriculture MIning Processing Industry

Construct ion Retail Transportation and Communication

Households

Credit Third Party Fund

Third Party Fund, Credit (yoy) and LDR Credit of Invesment remains the main driver

RISKS REMAIN MANAGEABLE

Banking NPL by Economic Sector

Multifinance NPF remains managable

10

Banking NPL remains below the threshold

2.66

1.15

0.00

1.00

2.00

3.00

4.00

Sep-

15

Dec

-15

Mar

-16

Jun

-16

Sep-

16

Dec

-16

Mar

-17

Jun

-17

Sep-

17

Dec

-17

Mar

-18

Jun

-18

Sep-

18

Dec

-18

Mar

-19

Jun

-19

Sep-

19

% NPL Gross NPL Net

1.46

3.10

3.55

3.86

6.07

2.16

2.18

3.65

0

2

4

6

8

10

Sep-

15

Dec

-15

Mar

-16

Jun

-16

Sep-

16

Dec

-16

Mar

-17

Jun

-17

Sep-

17

Dec

-17

Mar

-18

Jun

-18

Sep-

18

Dec

-18

Mar

-19

Jun

-19

Sep-

19%

Pertanian PertambanganKonstruksi PerdaganganAkomodasi Transportasi dan KomunikasiRumah Tangga Industri Pengolahan

2.66%

2.50%

6.75%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

Sep-

16

No

v-1

6

Jan

-17

Mar

-17

May

-17

Jul-1

7

Sep-

17

No

v-1

7

Jan

-18

Mar

-18

May

-18

Jul-1

8

Sep-

18

No

v-1

8

Jan

-19

Mar

-19

May

-19

Jul-1

9

Sep-

19

TotalPembiayaan KonvensionalPembiayaan Berdasarkan Prinsip Syariah

3.16%3.47%

3.18%2.96%

3.25% 3.15% 3.17%

2.71% 2.71% 2.82% 2.66%

1.31%1.47%

1.16%0.93%

1.17%0.97% 1.08%

0.69% 0.62% 0.55% 0.51%

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%

Q12017

Q22017

Q32017

Q42017

Q12018

Q22018

Q32018

Q42018

Q12019

Q22019

Q32019

NPF Gross NPF Netto

TotalConventional FinanceSharia Finance

Multifinance NPF (Sharia and Conventional)

AgricultureConstructionAccommodationHouseholds

MiningTradeTransportation & Comm.Processing industry

FINANCIAL SECTOR PROFITABILITY PERFORMANCE REMAINS HIGH AND STABLE

11

PROFITABILITYRETURN ON ASSETS BY BUKU NET INTEREST MARGIN BY BUKU

11

2.48

2.0

2.2

2.4

2.6

2.8

Sep-

15Ja

n-16

May

-16

Sep-

16Ja

n-17

May

-17

Sep-

17Ja

n-18

May

-18

Sep-

18Ja

n-19

May

-19

Sep-

19

ROA

4.90

4.2 4.4 4.6 4.8 5.0 5.2 5.4 5.6 5.8

Sep-

15

Feb-

16

Jul-1

6

Dec-

16

May

-17

Oct-1

7

Mar

-18

Aug-

18

Jan-

19

Jun-

19

NIM91.24

68 72 76 80 84 88 92 96

Sep-

15

Feb-

16

Jul-1

6

Dec-

16

May

-17

Oct-1

7

Mar

-18

Aug-

18

Jan-

19

Jun-

19

BOPO

2.48

1.20

1.53 1.78

3.10

-

0.50

1.00

1.50

2.00

2.50

3.00

3.50

ROA BUKU 1 BUKU 2 BUKU 3 BUKU 4

4.90 4.88 4.81

3.97

5.48

-

1.00

2.00

3.00

4.00

5.00

6.00

NIM BUKU 1 BUKU 2 BUKU 3 BUKU 4

13.3%

472.4%

-19.6%-50%

50%

150%

250%

350%

450%

Sep-

15Ja

n-16

May

-16

Sep-

16Ja

n-17

May

-17

Sep-

17Ja

n-18

May

-18

Sep-

18Ja

n-19

May

-19

Sep-

19

Pendapatan BungaPendapatan Operasional Selain BungaPendapatan Non-Operasional

Commercial Bank Commercial BankCommercial Bank

RETURN ON ASSETS OPERATING COST/REVENUENET INTEREST MARGIN

Interest earningNon-Interest earningNon-operational earning

POSITIVE OPINIONS FROM RATING AGENCIES

2018 2019Apr Jan Feb March Apr May

Moody’s: upgraded the rating at Baa2/Stable

Fitch: affirmed the rating at BBB/ Stable JCR: affirmed the rating at BBB , revised the outlook to positive

S&P: upgraded the rating at BBB/Stable

R&I: affirmed the rating at BBB/ Stable

Indonesia’s sovereign credit rating has stable outlook from key rating agencies

Upgrade on Indonesia Sovereign Credit Rating

Source: World Bank

Indonesia has progressed significantly in promoting its business environment as the EoDB index ranking for 2019 has climbed 18 places to 73 from its previous rank of 91 in 2017. Indonesia increasedits score by 1.42 points to 67.96 from 66.54 last year.

CHALLENGE TO BOOST THE ECONOMY GROWTH

Along with policies to overcome the challengesCHALLENGES IN INDONESIA ECONOMY

Maintainconsumerspurchasing power

Transformingmining economy tomanufacturing-based economy

Seizing theopportunity fromtrade war

Overcomingexternalimbalances

Inflation Rate needs to

remain low

Five priorities: manufacturing, agrobusiness, fishing, mining, and tourism.

Simplify investment bureaucracy

Export/import policy, tourism,

economic diplomacy

Entrepreneurship Index ranks 94/137 countries in 2018

EntrepreneurshipIndex is still low

Efforts undertaken by OJK relatedto Financial market pillar:ü Apply mandatory portion of

financing to productive sectorü Support the development of

fintech startupü Carry out financial consumer

education programs,

Declining competitiveness

Maintained the same score as last year, Indonesia GCI rank declined from 45/140 to 50/141

GLOBAL COMPETITIVENESS INDEX (GCI)

Sumber:http://www3.weforum.org/docs/WEF_TheGlobalCompetitivenessReport2019.pdf

1. Indonesian GCI dropped position from 45/140 in 2018 to 50/141 in 2019.

2. Indicator related to the authority of OJK is thepillar of Developed Financial Market. Effortsundertaken by OJK:a) Apply mandatory portion of financing to

productive sector, for:§ Bank: BUKU I at least 55%, BUKU II at

least 60%, BUKU III at least 65%, and BUKU IV at least 70% of overall financing.

§ Multifinance: at least 10%b) Support the development of fintech startupc) Carry out financial consumer education

programs, develop BWM, BUMDES / BUMADES, enhance the role of TPAKD.

Global competitiveness rankings of Asia-Pacificcountries/regions in 2019

Trend of Indonesia GCI Ranking

EASE OF DOING BUSINESS IN INDONESIA

Sumber: http://www.doingbusiness.org/content/dam/doingBusiness/country/i/indonesia/IDN.pdf

Economy Overall Starting a Business

Dealing with Construction Permits

Getting Electricity

Registering Property

Getting Credit

Protecting Minority Investors

Paying Taxes

Trading across Borders

Enforcing Contracts

Resolving Insolvency

Singapore 2 3 8 16 21 32 7 8 45 1 27Malaysia 15 122 3 4 29 32 2 72 48 33 41Thailand 27 39 67 6 66 44 15 59 59 35 24China 46 28 121 14 27 73 64 114 65 6 61Brunei Darussalam 55 16 55 31 142 1 48 84 149 67 64Vietnam 69 104 21 27 60 32 89 131 100 62 133Indonesia 73 134 112 33 100 44 51 112 116 146 36Philippines 124 166 94 29 116 184 132 94 104 151 63Cambodia 138 185 179 141 124 22 110 137 115 182 79Myanmar 171 152 81 144 136 178 185 126 168 188 164

OJK’S STEPS TO IMPROVE EODB INDONESIA:a. Revising OJK regulation concerning Right

Issueb. Widening the scope of reporter in the credit

reporting system/SLIK (Financial Information Services System) to all rural banks and finance companies

c. Credit bureau to not only provide credit scoring service but also providing more credit information that has value added

EoDB stagnated at 73 this year

INDONESIA ENTREPRENEURSHIP INDEX

Indonesia

GEI Score: 20.7Rank 94

GEI Score: 52.7Rank 27

GEI Score: 32.7Rank 58

Malaysia

ThailandGEI Score: 27.4

Rank 71

Filipina

GEI Score: 24.1Rank 84

Singapura

GEI Score: 23.2Rank 87Vietnam

3.10% 3.30%

5.00%6.00%

14.00%

Indon

esia

Vietna

m

Thail

and

Malays

ia

adva

nced

coun

tries

OJK POLICIES DIRECTIONS

BOOST FINANCING FROM FINANCIAL INSTITUTION

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

Commerci

al Ban

ks

Insure

rs & S

ocial

Sec

urity

Agenc

ies

Multifina

nce C

ompa

nies

Pensio

n Fun

ds

Indon

esia

Eximba

nk

Pawns

hop

Equity

Mark

et Cap

italiza

tion

Outstan

ding C

orpora

te Deb

t Sec

uritie

s

Outstan

ding G

ov't D

ebt S

ecuri

ties

Mutual F

unds

53.8%

8.6%3.4% 1.9% 0.8% 0.4%

46.8%

16.6%

2.8% 3.2%

INDONESIA FINANCIAL INSTITUTIONS ASSETS/GDP

To finance infrastructure projects and development of leading sectors: Tourism,

Fishery, Manufacture (Textile, Automotive), Agribusiness, and Mining sector

Bo o s t e x p o r t a n d r e d u c i n g i mp o r tPENGEMB

ANGAN

SEKTOR-

SEKTOR

UNGGULA

N

20

Bo o s t e c o n o mi c g r o w t h & e c o n o mi c e q u a l i t y

J o b c r e a t i o n & b u s i n e s s o p p o r t u n i t y ( SMEs )

Su p p o r t Su s t a i n a b l e De v e l o p me n t Go a l s

NEW ENGINE OF GROWTH

Downstream hilirization is necessary to boost the economy

PROMOTE NEW ENGINE OF GROWTHOJK build collaboration with the Regional Government

with the Regional Government, Association of Business Actors, Financial Industry

i n d e v e l o p i n g R e g i o n a l E c o n o m i c P o t e n t i a l A r e a s

NEW EXPORT-ORIENTED ECONOMIC GROWTHOJK issued regulations to accelerate economic growth

Enable start-up company and small

business to raise fund in capital market (through

IPO, equity crowdfunding)

Relaxing legal lending limit (BMPK) and risk

weighted assets (ATMR) for priority sectors

Enhance the role of securities companies

to the regional economy and

expanding access for the public to invest in

the capital market

LICENSING

CONSUMER PROTECTION

FINTECH SURVEILLANCE

REGULATION

Market conduct supervision for P2P lending

- Enforces the law for protecting consumer from illegal fintech.

- As of Sep 2019, 1.350 illegal fintech has been stopped.

Fully functioning fintech association (association will

enact code of ethics and code of conduct)

Three tiers licensing: Listed, Registered and Licensed

- Prudential based supervision - Regulatory sandbox.

Fintech center (OJK Infinity) for knowledge sharing

SUPERVISION

KNOWLEDGE SHARING FINTECH

ECOSYSTEM

22

ENCOURAGE THE TECHNOLOGY APPLICATION IN FINANCIAL INDUSTRY

POTENTIAL RISKS OF DIGITAL

REVOLUTION

C o n s u m e r p r o t e c t i o n C y b e r s e c u r i t y

D a t a p r i v a c y& m o n e y l a u n d e r i n g

D i s t o r t i o n o n L a b o r M a r k e t

Technology driven

POTENTIAL RISKS OF DIGITAL REVOLUTION

Improving supply, demand and financial market infrastructures

SUPPLY SIDE

DEMANDSIDE

INFRASTRUCTURE

Bonds and SukukPrivate

Fund (RDPT)

Infrastructure Fund (DINFRA)

Stocks

Equity Crowdfunding

Hedging Instrument for

Government Bond.

Indonesia Government Bond

Future (IGBF)

Electronic public offering (E-IPO)

Integrated database system (DWH, SIPETRO)

PROVIDE LONG TERM FINANCINGIntegrated licensing

system (SPRINT)

Consumer Protection & Expand Investor Base

Disgorgement fund

Indonesia Securities Fund

(Lembaga Pendanaan Efek

Indonesia)

Regulatory & Physical Infrastructure

Education Regional Securities Company

E-book building

Accelaration of settlement process

T+3 into T+2Expand Single Investor

Identification (SID)

Development of XBRL for issuers

Municipal Bonds (OBDA)

Central Java, West Java, DKI

Jakarta

Islamic Capital Market

Expand distribution channels: selling

mutual fund in minimarket and

branchless banking agents

Real Estate Investment Trust

(REITs)Asset Backed

Securities (EBA)

EBA-SP (Surat Partisipasi)

Green Bonds & Green Sukuk

Project Bond

* SID as of September 2019grew 42,8% ytd

24

E-Proxy & E-voting RUPS

FINANCIAL DEEPENINGIndonesia’s scores are still below neighboring countries

OJK INITIATIVES IN IMPROVING FINANCIAL ACCESSExpand financial access for MSMEs and communities in remote areas

1

2

3

4

5

6

7

8

9

10

Rp115,7 Trillion

Facilitated distribution of Micro credit (82,68% from target Rp141,6 Trillion)

25,8 million participants

Rp29,32

billion (as of September 2019)

53 Micro Waqf Bank

20 BUMDES, 2 BUMR1 BUM-Kampung

1,15 million agents

Rp2,21 trillion

32 Province106 City

350 thousands school21,6 million account

Rp8,76T

Rp31,9 TOJK goes to Campus

Financial ExpoWayang Show

Investment Alert Task Force In 40 areas

138 TPAKD

Village Owned Enterprises

Outstanding Saving

25,8 million customers

Team for Acceleration of Regional Financial Access (TPAKD)

OJK contact center

Branchless Banking

FINANCIAL LITERACY AND INCLUSION

Financial education will be continued to support target 2019

LiteracyINDEX 2016 29,7%

67,8%TARGET

2019 35%

75%I N C L U S I O N

InclusionINDEX 2016

TARGET 2019

Financial customer protection

BUSINESS PROCESS REFORMATION

NBFI REFORM• Implement international standards• Continously improving NBFI reform.

O-BOXmonitoring process of bank transactions

Integrated Registration and License System or SPRINTAn integrated system to process license & registration for banking/capital market/NBFIs products & institution/individual,

DATA WAREHOUSE For banking, NBFI and capital market

B A N K I N G

INDONESIA INVESTMENT PRODUCTS

MORE INVESTMENT

SUFFICIENT GOODS AND

SERVICES FOR DOMESTIC

ECONOMIC GROWTH

STRATEGIES TO MAINTAIN ECONOMIC GROWTH

NEW ENGINE OF GROWTH

PROMOTES INNOVATION

OVERVIEW OF INDONESIA’S FOREIGN DIRECT INVESTMENT

Source: Indonesia Investment Coordinating Board (BKPM)

Q3-20192018

USD9.193,2 mio

USD1.948,8mio

USD881,4mio

USD4.952,8 mio

USD1.023,4mio

USD2.376,5 mio

Q3- 20192018

USD434,0 mio

USD2.011,4 mio

USD220,8 mio

USD1.774,9 mio

Q3- 20192018

USD1.358,0mio

USD943,1 mio

During Jan-Sept 2019, the investment realization in Indonesia has reached IDR 601.3 trillion (increased about 12,3% yoy).As of Q3 2019, the investment realization has achieved about 75.9%% from the 2019 target.

IDR

trill

ion

FDI and DDI Investment RealizationBased on Sector

Source: Indonesia Investment Coordinating Board(BKPM)

During Q3 2019, the investment has been

dominated

by Transportation, Warehouse, and

Telecommuncation (19,1%), Electricity,

Gas, and Water Supply (39,1%); and

Construction (8,2%)

During Q3 2019, the highest investment

realization was situated within Java island:

Jakarta (20%), West Jawa (16,2%), and East

Java (7,2%).

During Q3 2019 – Singapore,

Netherland, and China became 3

largest investors for Indonesia

INVESTMENT REALIZATION PROGRESS

FDI and DDI Investment RealizationBased on Location

FDI and DDI Investment RealizationBased on Country of Origin

OJK in coordination with fiscal authorities haveissued several tax incentives to induce economicgrowth, among others:• Tax relaxation for investment in pioneer industry

that has high value added and externalities,introducing new technologies, and has astrategic implication to the national economy(PP No. 45/2019)

• Tax relaxation for government bond investors(PP No.55/2019)

Incentive to AttractSustainable Finance

Reduction of the industry’s contribution fee:25% from registration and dan registrationstatement fee of green bond issuance

OJK’S SUPPORT TO GOVERNMENT PRIORITIES

Capital Raising

IDR 148,02 trillionFrom 144 IPOs, 43 of them are new issuers

14

38

58

43 42

34 35

28

1511

74

8882

86

15

148.02

0

50

100

150

200

250

300

0

10

20

30

40

50

60

70

80

90

100

2016 2017 2018 12-Nov-19 in processIPO Right Issue

Debt Securities and Sukuk (EBUS) Capital Raising (IDR Trillion)

INVESTMENT PRODUCTS IN CAPITAL MARKETAlternative financing in capital market

Investment Products and Asset Under Management

Data as of 11 November 2019 unless indicated:* Data as of Sept 2019** since 2018

MUNICIPAL BONDSRepresenting an attractive investment with a low default risk

34

North Sumatera

East Kalimantan

South Kalimantan

West Sumatera

DKI Jakarta

West Java

Central Java

East Java

Bali

South Sulawesi

10 Potential Provinces To Issue Municipal Bonds which

amounted to USD8.69 Billion

Rated by Rating Agencies

Endowment funds is budgeted annually by the local government for principal payments

Providing flexibility in the use of fund

Financial soundness of regional government is assessed by related ministry

Indonesia is committed to deepen its financial market, giving more space for the development of municipal bonds

I N V E S T M E N T S I N I N D O N E S I A M U N I C I P A L B O N D S

Incentives for registration fees from 0.5% to 0.0125% of the value of emissions

OJK simplified municipal bond procedures, but still ensuring sustainability and the ability of the local government to repay its debt

SUSTAINABLE FINANCE

USD9.45 billion(IDR132.7 T)

Accumulated green loan granted

USD 669 million(IDR 9.5 T)

Green bondsissuance of

Government green SUKUK

USD3.2 billion(IDR45 T)

BLENDED FINANCE PROJECTSIn term of blended finance, we are benefiting with strong commitment we have witnessed

from global stakeholders during the last World Bank - IMF Annual Meeting in Bali.

± USD2.46 billion commitment

to finance

33 projectsthrough

blended finance scheme

from various domestic and global stakeholders

6 projectshave just

completedin 2018

9 projectsare in progress

2 projectswill be startedin 2019

16 projectsare being prepared/

drafted

OJK ENCOURAGES INVESTOR TO INVEST IN FINTECH

144 Registered/ Licensed Fintech

P2P Lending

Equity Crowdfunding

Registered Companies 2

IDR

D e c a c o r n

Starts-up Companies

Decacorn1 Unicorn4

Digital Banking

Banks Provided Digital Banking Services

85

THANK YOU