The 2024 public debt borrowing and repayment plan and the 3-year public debt management program for the period 2024-2026 aim to ensure sufficient funds for timely and full repayment of public debt, without affecting the national credit rating; and to continue restructuring the government bond portfolio in accordance with market conditions and implementation needs.
At the same time, ensure the task of mobilizing loan capital through diversification of sources and methods of borrowing both domestically and internationally to meet the needs of balancing the state budget and socio-economic development with appropriate cost-risk levels, focusing on prioritizing the mobilization of foreign capital for large, important projects that have a transformative and situational impact.
In addition, it is necessary to strictly control debt safety indicators within the ceiling and warning thresholds approved by competent authorities; promote the development of the domestic capital market; and maximize the utilization of preferential foreign loans.
Public debt borrowing and repayment plan for 2024 (*)
The decision states that the government's borrowing plan is a maximum of VND 676,057 billion, including: borrowing for central budget balance of a maximum of VND 659,934 billion, of which borrowing to cover the central budget deficit is a maximum of VND 372,900 billion; borrowing to repay principal debt not exceeding VND 287,034 billion; and borrowing for on-lending of approximately VND 16,123 billion.
Flexible funding sources include: (i) issuing government bonds; (ii) borrowing ODA and concessional foreign loans; and (iii) borrowing from other legitimate financial sources if necessary.
The government's debt repayment amounted to approximately VND 453,990 billion, of which direct government debt repayment did not exceed VND 395,874 billion, and debt repayment for on-lending projects was approximately VND 58,116 billion.
Regarding government-guaranteed loans
The decision states that the maximum bond issuance guarantee for the Vietnam Development Bank is VND 1,160 billion, equivalent to the principal repayment amount of government-guaranteed bonds due in 2024. For the Social Policy Bank, no government-guaranteed bonds will be issued in 2024.
The specific bond issuance guarantee amount for the Vietnam Development Bank is determined based on the Ministry of Finance's assessment of the application for government-guaranteed bond issuance, as stipulated in Government Decree No. 91/2018/ND-CP dated June 26, 2018, on the granting and management of government guarantees.
Regarding guarantees for domestic and foreign loans to businesses, no government guarantee limit will be allocated for 2024 because the projects do not require capital withdrawal, only debt repayment.
Local government's borrowing and repayment plan
The decision states that approximately 30,619 billion VND will be borrowed from the government's foreign loan relending fund and other sources.
Local governments' debt repayments amounted to approximately VND 6,993 billion, including principal payments of approximately VND 4,119 billion and interest payments of approximately VND 2,874 billion.
Foreign commercial loans of enterprises not guaranteed by the Government in 2024: The limit for medium and long-term foreign commercial loans of enterprises and credit institutions under the self-borrowing, self-repaying method is approximately 6,599 million USD; the growth rate of short-term foreign debt is approximately 18-20% compared to the outstanding debt as of January 31, 2023. (**)
The decision states that the borrowing and debt repayment plan for 2024 will be implemented within the maximum limits specified in (*) and (**); in case of needs exceeding the above-mentioned maximum limits, the Ministry of Finance will submit a proposal to the Prime Minister to adjust the plan.
Three-year public debt management program for the period 2024-2026
According to the decision on government borrowing and debt repayment, the total government borrowing for the period 2024-2026 will be a maximum of approximately VND 1,862.2 trillion, of which borrowing for the central budget will be approximately VND 1,818.3 trillion, and borrowing for on-lending will be approximately VND 43.9 trillion.
The total debt repayment by the Government during the 2024-2026 period will be a maximum of VND 1,102.8 trillion, of which direct debt repayment will be approximately VND 976.4 trillion and on-borrowing debt repayment will be approximately VND 126.4 trillion.
Proactively allocate resources to fully fulfill the government's debt repayment obligations, preventing overdue debts that could affect the government's international commitments.
Regarding government guarantee limits
The decision states that, for guarantees for the two policy banks issuing bonds: The maximum guarantee for the Vietnam Development Bank in the 2024-2026 period is VND 8,620 billion, and the maximum guarantee for the Social Policy Bank in the 2024-2026 period is VND 11,590 billion; equal to the principal repayment obligation of the government-guaranteed bonds due in the 2024-2026 period.
The objective is to strictly control the issuance of government guarantees for loans within the limits approved by competent authorities; the amount of capital withdrawn must not exceed the principal repayment obligation for the year.
Regarding borrowing and debt repayment by local governments, the Decision clearly states that the limits on budget deficits and debt of local governments shall be controlled in accordance with the provisions of the State Budget Law, the National Assembly's Resolutions on piloting some specific mechanisms and policies of some localities, and Resolution No. 23/2021/QH15 dated July 28, 2021, of the National Assembly on the National Financial Plan and public borrowing and debt repayment for the 5-year period 2021-2025.
Strictly control budget deficits.
The Prime Minister has instructed the Ministry of Finance to closely monitor the state budget deficit, local government budget deficits, local government borrowing levels, and the government's debt repayment ratio.
The Ministry of Finance is studying new methods of mobilizing loan capital to ensure sufficient loan capital for development investment, meeting the needs of large-scale projects in transportation infrastructure, climate change mitigation, net zero emission commitments, digital transformation, while controlling public debt and national foreign debt within the ceiling and warning thresholds for the period 2021-2025 and beyond.
In addition, the Ministry of Finance proactively manages the volume of government bond issuance according to market demand and absorption capacity, ensuring that the central budget's capital needs are met with interest rates appropriate to market conditions. It issues a variety of government bond maturities, ensuring that the average maturity of government bonds issued meets the targets set by the National Assembly.
The Ministry of Finance submits to the Prime Minister for approval the specific bond issuance guarantee level for the Vietnam Development Bank in 2024, based on the regulations in Government Decree No. 91/2018/ND-CP dated June 26, 2018, on the granting and management of government guarantees, this decision, and the Vietnam Development Bank's government-guaranteed bond issuance plan. Strengthen inspection and auditing of loan utilization and debt repayment.
The State Bank of Vietnam strictly controls the implementation of the self-borrowed, self-repaid foreign debt limit for enterprises not guaranteed or secured by the Government within the approved limit; it takes the lead in managing the foreign debt of the private sector and, in coordination with the Ministry of Finance, reports to the Prime Minister in case of negative developments.
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